Audio available in app
Red Ocean markets are crowded, whereas Blue Oceans are untapped from "summary" of Blue Ocean Strategy, Expanded Edition by W. Chan Kim,Renée A. Mauborgne
Red oceans are known for their cutthroat competition, where companies fight for a share of existing market space. The market boundaries are defined, and the rules of the game are well understood by all players. As a result, competition becomes fierce, leading to a bloody "red ocean" of rivals fighting for the same customers and trying to outperform one another. In such markets, companies often engage in price wars, diminishing their profit margins and eroding their value proposition to customers. On the other hand, blue oceans represent markets that are unexplored and untapped. These are areas where demand is created rather than fought over. In blue oceans, companies have the opportunity to create new market space by offering innovative products or services that open up new customer segments. By focusing on differentiation and value innovation, companies can break away from the competition and create uncontested market space for themselves. The key difference between red oceans and blue oceans lies in the level of competition and market boundaries. Red oceans are crowded with competitors, making it difficult for companies to stand out and achieve sustainable growth. In contrast, blue oceans offer companies the chance to escape the confines of traditional market boundaries and create new opportunities for growth and profitability. To thrive in blue oceans, companies must shift their focus from competing with rivals to creating value for customers. By identifying unmet needs and unlocking new sources of value, companies can differentiate themselves and attract a wider customer base. This shift in mindset helps companies break away from the competition and chart their own course in uncontested market space.- The concept of red oceans and blue oceans highlights the importance of strategic thinking and innovation in today's competitive business landscape. By understanding the differences between these two types of markets, companies can make informed decisions about where to compete and how to create value for customers. Ultimately, the choice between red oceans and blue oceans can determine the success or failure of a company in the long run.
