Understanding Blue Ocean Strategy Meaning: Definition and Examples

Learn the definition, advantages, and examples of a Blue Ocean Strategy: a unique, effective business strategy employed to gain an edge over competitors and maximize profits. This article provides a comprehensive overview, including essential tips and insights about how to strategically apply this innovative system in order to stand out from the competition and make waves across your industry.

Along with a thorough discussion of the concepts and key components of the blue ocean strategy, it provides practical advice on how businesses can use this method to differentiate themselves, create long-term success, and increase their market share.

Finally, find valuable case studies to help you get started and understand why the blue ocean strategy should be part of any company’s strategy toolbox.

What is the Blue Ocean Strategy?

Blue ocean strategy is a business strategy focused on creating uncontested market space or a “blue ocean” of profitability and growth. It was developed by W. Chan Kim and Renée Mauborgne, professors at INSEAD, and is based on the idea of creating “value innovation”—products or services that represent a leap in value for customers and, consequently, a leap in profits for companies.

A “red ocean” denotes an existing and highly competitive market. With a blue ocean strategy, however, the goal is to identify and create new, uncontested market spaces, thus leaving the competition behind. In a red ocean market, the supply often exceeds the demand, and the competition is fierce, resulting in a shrinking profit pool for all industry players. Blue ocean strategy seeks to move away from existing markets, known as the “red oceans,” and create an entirely new market space, or “blue ocean,” that does not yet exist.

The blue ocean strategy focuses on three strategy propositions: focus on value innovation, not on competing; focus on the big picture, not the competing firms; and make competition irrelevant. The strategy argues that firms should focus on creating value instead of competing within an existing market, which is often saturated. Companies should create entirely new markets where they can differentiate themselves through value innovation and create a competitive advantage. This is done by creating a new value curve, which is based on a buyer utility map of customer needs. The blue ocean strategy also requires the simultaneous pursuit of low cost and differentiation rather than a trade-off between the two.

In their book Blue Ocean Strategy, Kim and Mauborgne offer an alternative to the traditional approach of competing head-on in existing markets. They argue that creating a blue ocean—a market space that is uncontested and profitable—can be a viable and successful business strategy for companies of all sizes. By creating and capturing a new market space, companies can achieve profitable growth and reignite their industry.

What Are the Benefits of the Blue Ocean Strategy?

Blue Ocean Strategy (BOS) is like a treasure map for businesses, helping them to find untapped markets and capture value from them. It’s the perfect way to avoid competition and create profitable growth opportunities.

The pros of using BOS are twofold: it helps you identify your unique value innovation and execute an effective strategy. Value innovation means creating something new that transcends existing markets, while strategy execution involves focusing on cost efficiency and differentiation at the same time – so you can make sure your blue ocean is created successfully!

But what does this mean for businesses? Well, not only will they be able to increase their profits but also gain a larger market share by entering new markets with innovative products or services. So why wouldn’t you want to use BOS?

Increased Profits

By using BOS, businesses can boost their bottom line by branching out into new markets and avoiding competition. BOS helps businesses seize value from untouched markets, which is often more lucrative than competing in existing ones. Furthermore, BOS encourages companies to focus on cost-effectiveness and differentiation to craft a unique offering that customers are willing to pay for. This assists businesses in maximizing profits and expanding their market share.

Businesses that use BOS successfully also benefit from an even playing field, as it does not involve battling with other firms. This allows them to concentrate on creating value for their clients instead of vying for the same market share.

In conclusion, BOS aids businesses in increasing their profits by exploring new markets, tapping into untapped ones, crafting a one-of-a-kind proposition, and focusing on cost efficiency and differentiation.

Increased Market Share

By using BOS, businesses can soar to new heights by crafting a unique value proposition and standing out from the competition. The four actions suggested by BOS – focus, create, reduce, and raise – are designed to help businesses carve out their own market space that is inaccessible to their competitors.

For instance, Apple utilized BOS to craft a blue ocean when they released the iPhone, an innovative device that combined a phone, music player, and internet browser all in one package. By creating something special with its unique value proposition, Apple was able to capture a large market share and become the leading smartphone brand in the world.

Similarly, Netflix used BOS to make waves when they introduced their streaming service, which allowed customers to watch movies and TV shows on demand. With this fresh approach providing an exclusive value proposition for customers, Netflix was able to capture a large market share and become the top streaming service provider in the world.

Finally, Ford employed BOS when they unveiled the Mustang, an affordable yet stylish car that appealed particularly well to young drivers. Thanks to its distinct value proposition Ford was able not only to capture a large market share but also become one of the leading car manufacturers in the world as well!

In conclusion: Businesses can use BOS as a tool for success by crafting unique value propositions that set them apart from competitors like Apple, Netflix, and Ford have done so successfully before them!

What Are the Key Steps in Implementing a Blue Ocean Strategy?

Blue Ocean Strategy is a revolutionary business approach that encourages companies to break away from the competition and create their own unique market space. Developed by W. Chan Kim and Renée Mauborgne, this strategy provides businesses with an opportunity to differentiate themselves from their competitors and offer customers something truly special. To help businesses make the most of this strategy, the authors suggest four key actions: creating uncontested market space, making the competition irrelevant, reconstructing market boundaries, and focusing on the big picture.

The first action is all about identifying customer needs and creating a new value proposition that will set your company apart from its rivals. This involves looking at existing markets to understand what customers are looking for before offering them something different – like a combination of features they can’t find anywhere else! Once you’ve identified your unique value proposition, it’s time to focus on creating a blue ocean by redefining industry boundaries and carving out your own niche in the marketplace.

The second action is all about making sure your competitors don’t stand in your way as you enter uncharted waters! To do this, you need to analyze their strategies, resources, and capabilities – anything that could give them an edge over you in terms of price or quality should be taken into account when developing yours. You also need to look at where your strengths lie so you can use these advantages to gain traction in the new market space quickly!

The third act focuses on reconstructing those same boundaries even further by understanding customer needs beyond just what exists today – think outside the box here! Companies should aim to provide customers with more than just features; they should strive to deliver real value through benefits too! Additionally, companies must consider how much it costs them (and therefore how much they can charge) when constructing their cost structure, so they remain competitive while still offering great value propositions for buyers.

Finally comes focusing on the big picture, which means understanding not only how the Blue Ocean Strategy applies specifically within one’s industry but also grasping marketing theory such as three strategy propositions, six paths framework & actions framework plus buyer utility map, which helps create unique values propositions tailored towards individual consumers’ wants & needs alike! By following these four steps outlined above, any business has potential access to untapped markets full of opportunities waiting for exploration – if done right, there’s no telling what heights success may reach!

Identify Your Value Innovation

Identifying a unique value innovation is a must for crafting a blue ocean. Companies should focus on understanding customer needs, creating an entirely new market, and providing customers with a unique blend of features and benefits. To gain the upper hand in the market, companies should strive to offer their customers something special – tipping point leadership – by offering them an exclusive combination of features and benefits.

To create their own market space with their own unique value proposition, companies need to construct a strategy canvas. This involves examining the existing market space, redefining industry boundaries, targeting their desired audience, and determining how much it will cost to provide this value proposition.

Analyze Your Competitors

Analyzing competitors is a crucial component of creating a blue ocean. To stand out from the competition, companies must understand their rivals’ strategies, resources, and capabilities. They should also consider the value cost trade-off to craft a unique value proposition. Examining existing markets can help them gain an edge in the new market space by identifying opportunities to differentiate themselves from competitors. Metaphorically speaking, understanding your opponents is like playing chess – you need to think several moves ahead!

Create a Unique Value Proposition

Creating a unique value proposition is an essential part of creating a blue ocean. It’s all about understanding customer needs, creating a new market, and offering something special that no one else has. To do this, companies must understand the three strategy propositions, the six paths framework, and the framework of the action. They also need to know what a buyer utility map is and how it can help them create something truly unique.

It’s not just about having great ideas, though – companies have to think about their industry economics too. This means they need to create a cost structure that will allow them to offer customers better value than anyone else in the market. Knowing your target market is key here, too – you want your value proposition to be attractive to them!

To illustrate this point further, let’s look at some examples of successful blue ocean strategies: Apple created the iPod, which allowed people to store and listen to music on-the-go; Cirque du Soleil blended acrobatics with dance and theatre into an entirely new form of entertainment; Southwest Airlines offered low-cost flights with free checked bags; Ford provided cars with more features at lower costs than its competitors. All these businesses used blue ocean strategies effectively by creating something totally unique that appealed directly to their target markets!

Examples of Companies that Have Used Blue Ocean Strategy

Blue ocean’s strategy is like a lighthouse in the dark, guiding companies around the world to create uncontested market space. W. Chan Kim and Renée Mauborgne are credited with introducing this concept which focuses on creating value and differentiating from competitors to gain an edge over them. Companies such as Apple, Netflix, and Ford have all sailed their own blue oceans by using Blue Ocean Strategies successfully.


Apple is a shining example of a business that has sailed the blue ocean and created an entirely new market. In 2003, they launched their revolutionary iTunes music download service – offering users a simple and convenient way to purchase songs that were previously unavailable.

Unlike other services, Apple allowed customers to pick and choose individual tracks instead of buying entire albums. This was a huge advantage for them as it meant they could get exactly what they wanted without having to pay for anything extra. Plus, Apple made sure their prices were wallet-friendly so everyone could enjoy the benefits of their service.


Netflix is another shining star that has used blue ocean strategies to create a new market. They revolutionized the entertainment industry with their streaming services, offering a unique blend of features and services – from an extensive selection of movies and TV shows to a low monthly subscription fee, all on an easy-to-use platform.

This combination enabled Netflix to gain the upper hand over competitors and build up a large customer base. Their blue ocean strategy has been nothing short of triumphant; they continue to reign supreme in the streaming industry.


Ford is another company that has taken the plunge into a blue ocean strategy to stand out from its competitors. With the introduction of their Ford Focus model, they created an unbeatable combination of comfort, performance, and value – all at a competitive price with more features than other cars in its class. This allowed them to capture a larger market share and create an entirely new space for themselves – uncontested by any rivals! And it’s paid off; Ford’s blue ocean strategy has been highly successful, making them one of the top players in the automotive industry.

Before we finish you should check those posts about How to Learn Marketing Skills.


Blue Ocean Strategy (BOS) has become increasingly popular among businesses looking to create value and gain a competitive edge in the complex business world. BOS is used to create an uncontested market space, resulting in profitable growth and increased market share by tapping into untapped markets, creating a unique value proposition, and differentiating from competitors.

The key steps in implementing BOS include: Identifying a unique Value Innovation, Analyzing Competitors, and Creating a Unique Value Proposition. Companies that have successfully utilized the strategy and achieved immense success include Apple, Netflix, and Ford.

Blue Ocean Strategy can be highly beneficial for businesses where the market is saturated with competition because it allows them to unlock profits, capture a larger market share, and differentiate themselves from their competitors. By understanding the meaning of the Blue Ocean Strategy and following the key steps, businesses can achieve long-term success and profitability.

Ultimately, BOS encourages businesses to think outside the box and tap into opportunities in order to remain relevant in the ever-changing business world.

Frequently Asked Questions

What are the four strategies of the blue ocean strategy?

The blue ocean strategy is an ideal that companies can use to succeed in highly competitive markets. It has four components: creating buyer utility, setting a price, managing costs, and designing consumer adoption practices.
With these strategies, organizations can reduce competition, create new demand, and stand out from their competitors.

What is meant by a blue ocean?

The expression “blue ocean” refers to the unexploited potential within markets that are currently uncontested by competitors. By developing new products and services and pricing them strategically, companies can successfully enter these blue oceans and gain more market share and profits than in a red ocean.

What is a business example of a blue ocean strategy?

A typical example of the blue ocean strategy is the case of Cirque du Soleil, a Canadian entertainment company that created a new market and took away the existing competition. This resulted in revolutionary success for the company, as demonstrated by its impressive track record.

What is the blue ocean vs. red ocean strategy?

Blue ocean and red ocean are two distinct market strategies with differing focuses. The blue ocean strategy emphasizes creating new markets and high value offered to customers, while the red ocean connotes wading into intense competition in already established markets.
By understanding the difference between these two models, organizations can choose the approach that best suits their strategy.

One Comment

  1. I love your article about blue ocean strategy.

Leave a Comment

Your email address will not be published. Required fields are marked *