Blue Ocean Strategy

The article, “Blue Ocean Strategy,” by W. Chan Kim and Renée Mauborgne, argues that successful businesses should focus on creating blue oceans, uncontested market spaces where the competition is irrelevant, rather than red oceans, overcrowded markets where companies compete for existing demand. The authors explain that blue oceans are often created by incumbents within their core businesses, and they are not solely driven by technological innovation. The authors use Cirque du Soleil and Ford’s Model T as examples of companies that created blue oceans by offering new value propositions to customers, while simultaneously lowering costs. The authors contend that blue oceans are more profitable than red oceans and that companies should shift their strategic focus to creating new market spaces, rather than just trying to win in existing ones.