Outdo Your Competition Using The Blue Ocean Strategy

Outdo Your Competition Using The Blue Ocean Strategy

Here’s a question for all budding entrepreneurs and experienced business professionals – What if you could set up and thrive in your business without competition?

In today’s competitive environment, good ideas do not always lead to great businesses. Often they lack focus on a market niche that they can tap into uncontested. Building such a focus is the main premise behind the Blue Ocean Strategy. Blue Ocean Strategy provides a scientific approach, analytical framework, and tool to understand and enter uncongested markets. 

Table of Contents

What Is The Blue Ocean Strategy?

The Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne in 2004, in their book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant

The aim of the Blue Ocean Strategy, as stated by Kim and Mauborgne in their book, is “to allow any organization to step up to the challenge of creating blue oceans in an opportunity-maximizing, risk-minimizing way”. Blue oceans, in this instance, refer to the idea that a firm should exist in a space where competition becomes irrelevant. This image is contrasted by using the term ‘red oceans’ to define markets that are heavily cluttered by firms competing with the same or similar products at different price points. This strategy aims to equip people with the tools to create their own niche, their own “blue oceans”, where they effectively unlock new demand and value innovation within new frontiers of opportunity. 

There are five main principles in considering the Blue Ocean Strategy. These principles effectively drive this strategy by providing the context within which it works. 

  • Competition should not occupy the center of strategic thinking.
  • Industry structure is not given; it can be shaped.
  • Strategic creativity can be unlocked systematically.
  • Execution can be built into strategy formulation.
  • A step-by-step model for creating strategy.

With the Blue Ocean Strategy, even when an industry has more supply than demand, smart entrepreneurs can create their own uncontested market space and can turn Red Oceans into Blue ones for their ventures.

Best Practices To Develop A Blue Ocean Strategy In Your Business

Within the Blue Ocean Strategy, there are 3 big stages each with its own separate frameworks that come together to form a larger strategy for a company. It is important to pay equal attention to each facet as innovation, preparation and careful planning are key to success within this strategy. 

Stage 1: Eliminate The Trade-Off Between Low Cost And Differentiation:

Raise – Which factors should be raised well above the industry standard?

In every industry, standard practices crop up when it comes to similar products. In this case, you need to be concerned with the general compromises made with a product within your industry. Once identified, these factors are in line to be raised well above industry standard to provide the kind of differentiation required in a non-competing market. These are usually to do with pricing, product, or service standards.

Eliminate – Which of the factors that the industry takes for granted should be eliminated?

As it often happens in oversaturated markets, certain things become industry standard and are rarely debated upon. The idea here is that more often than not, eliminating things that may have added value previously but no longer continue to do so can dramatically add value to your product. After all, without having obsolete elements take up valuable space, the product can be more streamlined and effective for a current user.

Reduce – Which factors should be reduced well below the industry standard?

Following the process of elimination, there are certain aspects that are essential to any industry, without which it is impossible to exist in that space. These are often raw materials, operational processes, specific branding components, etc. However, it is possible to break the mould with these as well, simply by trying to reduce rather than eliminate them. These are often costs associated with such necessities, as well as the time taken for each process.

Create – Which factors should be created that the industry has never offered?

Innovation is the name of the game. Especially when you’re intending to traverse a non-competitive market, having innovative products is key. Create where there is a gap in the market, and find the most innovative solutions to key issues plaguing an industry. This is also possible due to the reduction of costs through the above-mentioned processes of removing redundant elements, leaving space for newer, more market-specific innovations and value additions to a product. 

Stage 2: Create A Blue Ocean Strategy

Focusing on the know-how of strategizing is important. The Blue Ocean Strategy has a clear methodology that has been created keeping in mind the successes of other ground-breaking companies, as well as years of research into the best ways of entering uncontested markets. 

The main methodology for devising a Blue Ocean Strategy is this – 

Reconstruct Market Boundaries

Find alternative and compelling Blue Ocean opportunities from within a huge amount of potential opportunities. Finding alternative paths to commercial viability is key when it comes to reconstructing market boundaries.

Focus on the Big Picture

Align your strategic planning to a larger picture, keeping your vision and scope in mind. Prepare and showcase a strategy canvas using PowerPoint templates in your presentation, that articulates the industry setting, competitor’s markets, and products as well as your own differentiating factors. The big picture, therefore, should be a business’s commitment to retaining its own differentiations to break into a new market.

Reach Beyond Existing Demand

A unique feature of Blue Ocean Strategy is its ability to subvert conventional wisdom when it comes to business strategy. In this instance as well, rather than focusing on existing customers and further demand segmentation, a reverse approach works better. Finding commonalities within buyers suggests that there are certain features that appeal to most, and curating those within your offering will automatically make it attractive to new customers, reaching larger markets and ultimately expanding demand. 

Get the Strategic Sequence Right

Beyond strategizing, the sequencing of said strategy is of utmost importance. Understanding consumer behaviours, and expounding on them is what is meant by getting the strategic sequence right. In which order of business will your consumers be more likely to accept your offering? Moreover, what is a good plan for a sustainable business in terms of generating profit and revenue? These are questions that need to be suitably answered when sequencing your final strategy. You can create the perfect order for the sequence using a PowerPoint roadmap template. You can showcase the strategy in an efficient manner.

Stage 3: Implement The Strategy

Implementation of the Blue Ocean Strategy falls within two categories- leadership and execution focus. There are umpteen stories of fallen companies and startups. One of the most common reasons why even the most fool proof strategies fail is because of incompetent leadership. This is further exacerbated by an absence of fair processes within a business. 

Four things to keep in mind when it comes to execution focus are: articulating the reason for the shift from the status quo of the industry, resource management, employee and leadership commitment, and overcoming vested interests and conflicts of interest.

Pitfalls And Things To Look Out For

As with every framework, the Blue Ocean Strategy is not perfect. It has attracted its fair share of criticism over the years. However, the value in its non-competitive business strategy is undoubtable. To get the best out of this strategy, here are certain things to keep in mind.

  1. At some level, marketing and brand value are assumed or implicitly expected within this strategy. However, marketing plays a huge role in the success of businesses today, and be careful to not let it become a footnote in your larger strategy.
  2. Blue Ocean Strategy is not a mantra for success. It is a sustained effort on the part of the entrepreneur that is important in the success of this strategy. Simply put, it is a tool, not a magic wand that fixes inherent and foundational issues that may exist for your idea.
  3. Sometimes, the “Blue Oceans” of untapped market potential exists for a reason – that market may not be conducive for business and the reason for low or non-existent competition is because companies have tried and failed in similar ventures. Be cognizant of this fact and do your research about the markets you want to enter.
  4. Lastly, this new market you find yourself into may not always remain your playground to work with. Once you have attained a modicum of success, others will follow, who will also have their own strategies for that market. Keep on top of trends, upcoming competitors, and other variables to remain an uncontested leader in that market and industry.

Case Study: iTunes

One of the most prominent examples of the Blue Ocean Strategy can be seen in the case of iTunes. When Apple came up with the idea for the iPod, there was already a glaring flaw in the design of their product – the availability of digital music. At the time, few services offered digital music at competitive prices legally, and physical music reigned supreme, with most record labels unwilling to change the status quo. 

With the iPod, it became necessary for Apple to find other avenues to attain music that would then make their product viable for an audience that was, so far, happy with their Walkmans and boomboxes. And it had to do so legally, to avoid the certain possibility of litigation that would follow the launch of a product meant only to support as yet legally unavailable digital music. With that in mind, Apple came up with the idea for iTunes.

iTunes was built with a simple idea. Users should be able to download individual songs, for a fraction of the cost of a full album, right on to their iPods, and listen to their favorite music on the go. 

Despite illegal and free music available due to the propagation of online downloading, iTunes broke into the market spectacularly and revolutionized the way we consume music now. It understood the issues with the existing industry i.e. buying the whole album to listen to a single track. And it garnered deals with the top labels at the time to provide individual songs for a flat fee. This was a win-win situation for Apple and record labels. Apple now had all the missing parts to make the iPod a success, and the record labels could now actually profit from digital music rather than succumbing to the inevitability of illegal downloading. 

iTunes effectively created their own Blue Ocean within a highly saturated Red Ocean of music providers and has changed the music industry in ways that are still in effect, with digital sales of music bringing in far more revenue to their creators than physical music ever could. 


Blue Ocean Strategy is a tool for new business professionals. In a competitive market, where there are too many players, both startups and conglomerates, fighting for the same market’s attention in the Red Ocean, moving beyond the rat race to find your own space (or, Blue Ocean) is essential. Understanding and implementing this strategy is a very useful tool for entrepreneurs. After all, who doesn’t want to become the market leader in their own industry?

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