Blue Ocean Strategy Vs Red Ocean Strategy

Hello guys! In this article, I’m going to talk about Blue Ocean Strategy and Red Ocean Strategy. Have you heard of them? If not, I will try to explain it with my knowledge.

Blue Ocean Strategy is a strategy that are using a new innovation way such as creating a new market/industry that never has been before. More simply is that there is no competitor yet. It can be successful and unsuccessful since it’s going to be hard at first. If you’re lucky, then you can become whales that control that new market/industry as the leader. Most people that use this strategy tend to be very creative people.

For example, Nintendo is creating a Wii and making a game that didn’t have any violent lifelike games which is suitable for all ages to play the game. Nintendo successfully reaches non-gamer customers to play Nintendo games. Not only that, but Nintendo also makes Nintendo Switch. Nintendo Switch was a small device that allowed users to play games on a TV and on the go, connecting seamlessly between one device and the other. They didn’t compete with the expensive and high-end processing power of PlayStation 4 or Xbox One.

Red Ocean Strategy is a strategy that modifies existing products/services/methods. So basically it’s just making a new adjustment that differentiates it from another competitor. It can be taking their weakness and using it as their strength.

For example, you can see KFC and McDonald's. They both are selling common things like fried chicken. When one of them is launching a new product, the other is also launching it with a little bit of modification such as different taste/price/size to compete. Not only that, in several countries if you ask people which one is the best fast food fried chicken they are gonna say whether KFC’s or McDonald's. But we know that McDonald’s is founded in 1940 and KFC is founded in 1952. This means McDonald’s launched first but the brand image has changed slowly to KFC’s.

If you want more detail about them, you can read “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant” (2005) book by by W. Chan Kim (Author), Renee Mauborgne (Author)

When you’re starting a business, you can use the Blue Ocean Strategy or Red Ocean Strategy. They have their own strength and weakness. How about you? Are you using one of them in your own business strategy? Let me know your thought!