The Blue Ocean Strategy: What It Is, How It Works, Advantages, And Disadvantages

The Blue Ocean Strategy: What It Is, How It Works, Advantages, And Disadvantages

When it comes to the online share trading market, the Blue Ocean Strategy can help you grow. The term 'blue ocean' was invented by INSEAD professors W. Chan Kim and Renee Mauborgne to describe a market with little competition. It's the share market opportunities that arise as a result of a new industry or innovation. In this article, let us learn more about what is blue ocean strategy, What is the blue ocean strategy definition, how its works, advantages, and disadvantages.

What is the Blue Ocean Strategy Definition?

Blue Ocean Strategy is defined as a market where there is little or no competition for a product. The strategy involves finding a business in which very few competitors operate, and in which no pricing pressure exists. 

The Blue Ocean Strategy can be applied to a variety of industries and businesses. This is not limited to one business. However, let's understand more in detail about what is the blue ocean strategy and how it works. 

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Table of Content

  1. What is the Blue Ocean Strategy Definition?
  2. What is the Blue Ocean Strategy?
  3. How Does Blue Ocean Strategy Work?
  4. How to implement the Blue Ocean Strategy

What is the Blue Ocean Strategy?

According to the Blue Ocean Strategy, you should focus on the unexplored, uncompetitive segments rather than fight for a share of the shrinking market. Moreover, the market boundaries cannot be defined, therefore they can be reconstructed by the players in the industry through their new ideas.

The Blue Ocean Strategy is a marketing theory developed by INSEAD professors W. Chan Kim and Renee Mauborgne. According to the professors, strategic moves can increase company value, as well as a company's employees and customers.

It also creates new demand, which makes the competition irrelevant. Additionally, the strategy focuses on developing innovative products and services to gain an uncontested market by creating new demand.

Furthermore, peer competition has no relevance since the industries designed under this strategy don't exist. Businesses can increase demand by creating new products that are familiar to their customer base and have advanced features that make them stand out from the competition.

How Does Blue Ocean Strategy Work?

Now that we understand what is the blue ocean strategy, let us examine how it works. Well, a competitive market exists in established industries, with companies competing for every available market share. Often, the competition is so fierce that some firms can't survive. An industry of this type represents a red ocean, one that has been saturated with competition.

In blue oceans, it's the opposite. Many firms expand or innovate to find uncontested markets with blue ocean competition. Entrepreneurs also pay great attention to blue ocean markets.

Moreover, blue ocean markets are attractive to innovators and entrepreneurs for a variety of reasons. Like, blue ocean markets do not have any competitors. Due to the absence of competitors, blue ocean companies have first-mover advantages, cost advantages in marketing, and pricing flexibility.

How to implement the Blue Ocean Strategy

Here is the 5-step process to adopt the Blue Ocean strategy:

1. Build a Blue Ocean team to get started.

2. Take a closer look at the current state of your company.

3. Find the hidden challenges that limit the current industry size and uncover the potential customers.

4. Develop alternative opportunities by reconstructing market boundaries systematically.

5. Conduct a rapid market test to determine the right move. Launch the shift once it's done.

Advantages of Blue Ocean Strategy

Blue Ocean strategy has the following advantages:

  • Companies can use this strategy to find uncontested markets and avoid mature, saturated markets
  • Using it, companies can overcome the challenges of constant competition and overcome traditional business models to expand their demand and profitability
  • It helps organizations create new value for customers, expand their value, and increase their value.

Disadvantages of Blue Ocean Strategy

Most businesses can benefit from the blue ocean strategy. However, it has some disadvantages as well. Here are a few of them:

  • It can be challenging for firms to identify the right blue ocean strategy.
  • Due to the new market, help is needed to attract new customers. 
  • The execution of a strategy can sometimes go wrong. 
  • It takes patience and trust to get market share.
  • As it is a new field, there is a high level of risk for companies. 


Blue Ocean Strategy creates new demand by creating new ways to differentiate from competitors rather than competing for limited market share. Additionally, Blue Ocean Strategy helps companies discover untapped markets, overcome fierce competition, and break away from traditional business models. As a result, businesses can stay ahead by increasing their profitability and offering new value to customers.

However, it's important to note that Blue Ocean Strategy implementation requires thorough market analysis. Therefore, it is important that you understand what is the blue ocean strategy definition and how to implement it. Moreover, it can be difficult to identify the right blue ocean strategy and attract new customers. In addition, any new venture involves risk.


What is the Blue Ocean Strategy FAQs

Blue Ocean Strategy means creating new market space and establishing new demand simultaneously by pursuing differentiation and low costs. In the strategy, uncontested market space is created, thus making the competition irrelevant.

Blue Ocean strategy involves creating new market spaces rather than competing in existing ones. Red oceans are markets with many competitors, while blue oceans are markets that are yet to be discovered.

Blue ocean strategies are still effective because of their scalability. The method is applicable to every industry and business. Additionally, startups can use it to succeed.

A blue ocean strategy can be of particular benefit to companies operating in crowded markets with high levels of competition. These companies can differentiate themselves from their competitors by discovering and creating new markets. Additionally, the Blue Ocean Strategy can be beneficial to companies seeking to disrupt existing industries.

Like the deep and unexplored ocean waters, blue oceans are metaphors for the immense potential of markets.