Blue Ocean Strategy (BOS) - Note 1

Red Ocean Versus Blue Ocean Strategy

In the red ocean, differentiation costs because firms compete with the same best-practice principle. Here, the strategic choices for firms are to pursue either differentiation or low cost. In the reconstructionist world, however, the strategic aim is to create new best-practice rules by breaking the existing value-cost trade-off and thereby creating blue ocean.

Red Ocean Strategy

1. Compete in existing market space.
2. Beat the competition.
3. Exploit existing demand.
4. Make the value-cost trade-off.
5. Make the value-cost trade-off.

Blue Ocean Strategy

1. Create uncontested market space.
2. Make the competition irrelevant.
3. Create and capture new demand.
4. Break the value-cost trade-off.
5. Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

Posted in: Ahmad Faris