Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant

Core Concept

Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.

Authors

W. Chan Kim and Renée Mauborgne are professors at INSEAD. In 2023 they were honored as two of the four leading thinkers in the 100 years of Harvard Business Review's publication, and in 2019 they were named the most influential management thinkers in the world by Thinkers50.

Red Ocean vs. Blue Ocean

Red Oceans represent markets where competition is intense and bloody—existing market spaces with known boundaries and accepted rules.

Blue Oceans are potential markets not yet served by any firm—untapped market space ripe for growth.

While most firms direct their efforts to red oceans, trying to create and sustain a competitive advantage over rivals, the authors argue a much better strategy is to focus on blue oceans, identifying as-yet-undiscovered market opportunities.

Value Innovation

The cornerstone of Blue Ocean Strategy is value innovation, which occurs "only when companies align innovation with utility, price, and cost positions." Such strategies—termed "value innovation"—create powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand.

The Strategy Canvas

A central diagnostic tool that captures the current state of play in the known market space, allowing companies to see where they're investing and what factors the industry competes on.

The Four Actions Framework

Four key questions help companies break the value-cost trade-off:

1. Eliminate: Which factors the industry takes for granted should be eliminated?
2. Reduce: Which factors should be reduced well below the industry's standard?
3. Raise: Which factors should be raised well above the industry's standard?
4. Create: Which factors should be created that the industry has never offered?

Research & Impact

Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, the book has sold over 4 million copies, is published in a record-breaking 47 languages, and is a bestseller across five continents.

Famous Examples

• Cirque du Soleil (reinvented circus)
• Southwest Airlines (low-cost carrier model)
• Yellow Tail wine (accessible premium wine)
• Nintendo Wii (casual gaming)

Available at major retailers for approximately $25-35.