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Source: Harvard Business Review
Published: March 2015

Red and Blue Oceans

Circulated: July 15, 2020

The book “Blue Ocean Strategy” argues that lasting success comes not from battling competitors but from creating blue oceans — untapped new market spaces ripe for growth. The red ocean represents bloody fighting by rival competitors over a shrinking profit pool.

Red Ocean Strategy Blue Ocean Strategy
Compete in an existing, known market space / industry. Create a new, uncontested market space.
Cut-throat competition that turns the ocean red with blood. Unexplored by competition vast, deep, and full of opportunity.
Exploit existing demand, dividing customers between rival companies. Create new demand by developing uncontested market space.
As competition increases, prospects for profit and growth decline. A zero-sum game. Opportunity for growth due to innovation.
Example: AmazonBasics Batteries, Ryanair or Southwest Airlines. Example: Amazon Alexa, Cirque du Soleil (circus acts).

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