Red and Blue Oceans
By Zunaira Munir
What do the metaphors of Red and Blue Oceans Represent According to Blue Ocean Strategy?
The metaphor of red and blue oceans is used to visualize the strategic landscape that companies operate in.
Red oceans denote all existing markets, where companies engage in head-to-head competition - they fight for competitive advantage, battle for market share and struggle for differentiation. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the existing demand. It is like sharks engaged in a bloody fight over the customers. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition results in a bloody “red ocean” of rivals fighting over a shrinking profit pool.
The blue ocean, in contrast, is an analogy to describe the calm, wider, and deeper potential of market space that is not yet explored. Blue oceans denote all the industries not in existence today-the unknown market space, untainted by competition. There are no sharks there. In the blue ocean, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. The image of the vast blue ocean conveys the infinite possibilities for profitable growth that exist with Blue Ocean Strategy.
