What does "blue ocean strategy" refer to?

"Blue ocean strategy" refers to the concept of creating new market spaces, or "blue oceans," where competition is minimal or non-existent. This strategy encourages companies to break away from the crowded, competitive markets, termed "red oceans," where businesses vie for market share in saturated environments. By identifying and tapping into these unexplored market areas, organizations can innovate and create value in ways that dramatically differentiate them from existing competitors.

Choosing to operate in these blue oceans allows businesses to focus on innovation and addressing unmet customer needs rather than competing on price or features in highly contested markets. As a result, companies adopting a blue ocean strategy can achieve sustainable growth and potentially higher profit margins, as they don't have to engage in price wars or compete directly with established market players. This approach emphasizes value creation and strategic differentiation.