Blue Ocean Strategy Paper Essay Sample

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Blue Ocean strategy is an opportunity to create new and unique ways in an uncontested market space. This important strategy focuses on making competition irrelevant through creating a new innovative product or service. This paper outlines a product service that is considered a Blue Ocean move and the alternative Red Ocean strategy will also be covered. Blue Ocean Description and Importance

Blue Ocean Strategy is slang for the uncontested, innovative market space for an unknown industry. The strategy also changes the focus from the current competition to creating a new value and demand. Professors W. Chan Kim and Renee Mauborgne wrote the Blue Ocean strategy concept in their book ,”How To Create Uncontested Market Space and Make the Competition Irrelevant”. The Blue Ocean Strategy (BOS) concept represents potential market growth and profits. Within the BOS, there lies six main principles to guide the strategy in a systemic and risk minimization manner.

The six principles are: Reconstruct market boundaries, Focus on the big picture, not the numbers, Reach beyond existing demand, Get the strategic sequence right, Overcome organizational hurdles, and Build execution into strategy (BOS, 2014). The first four principles address blue ocean strategy formulation and the remaining two address the execution risks of blue ocean strategy (BOS, 2014). To summarize, BOS creates an uncontested market space, make competition irrelevant, create and capture new demand, break the value of cost trade-off, and pursue product differentiation and low cost (Kim & Mauborgne, 2005). The core of Blue Ocean strategy is to create new industries for unlimited potential profits.

Blue Ocean Strategy (BOS) is important because new opportunities delivers the perfect solution to help a firm become sustainable and successful ( Kim & Mauborgne, 2005). Moreover, the logic behind blue ocean strategy separates from the traditional competitive markets. Benefits include, increased productivity and operations, improved methods and controls, and improved decision making processes (Kim & Mauborgne, 2005). Product Service Considered a Blue Ocean Move

Apple iTunes digital music technology is an example of a Blue Ocean Strategy. By 2003, illegal file sharing created a way for Apple to strategically make a deal with several music companies that enabled free downloads. The companies included Sony, BMG, Universal Music Group, and Warner Brother Records (BOS, 2014). As a result, Apple launched an online music store, where advantages created iTunes. Customers were offered legal, reasonably priced, easy to use, and flexible a’ la carte music downloads (BOS,2014). As a bonus customers are able to purchase single songs instead of an entire album. All in all, iTunes increased the demand for MP3 players namely the Apple iPod (BOS, 2014). Red Ocean Alternative Pro and Cons

Red Oceans represent existing industries and familiar market space where boundaries are known and accepted (Kim & Maubourgne, 2014). Red Oceans also defines the prospects determines growth limited and competition is greater. In fact, firms are familiar with red oceans and accustomed to competition where the strongest survives. Other key points are pros and cons of red oceans. The disadvantages of red oceans environments include a more fierce, and crowded market as competitors steal share from one another. To further explain, as companies compete with each other prices are reduced, profits fall, and growth becomes limited (Kim & Maubourgne, 2014). Equally important, managers sometimes fail to recognize the differences between red and blue ocean strategies, which proves harder to break from competition. Comparatively, an advantage of the red ocean is the ability to enter a market already established where the market encourages duplication. Conclusion

To summarize, Blue Ocean strategy represents a method for developing undiscovered, innovative markets created for rapid growth and profits. Moreover, the importance of Blue Ocean strategy accelerates and expands today’s companies as they strive to break from competition. In contrast, Red Oceans represent easy to enter markets, heavily contested, with limited growth potential. Above all, Blue Ocean strategy influences risk-minimization and not risk taking.


Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy: How To Create Uncontested Market Space and Make Competition Irrelevant. Harvard Business School Press. Retrieved from www. Blue Ocean Strategy. (2014). Press Room

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