Blue Vs Red Ocean Strategy

We all know that Ocean is vast and limitless and in the case of marketing, the word ocean has paramount significance when it comes to blue and red ocean strategy. In order to understand more about the two concepts let’s look at the difference between blue ocean strategy and red ocean strategy –

  1. Blue ocean strategy refers to that strategy under which company creates new market or operates in uncontested market, in simple words there is no competition in this type of markets whereas in case of red ocean a firm has to compete in a competitive markets which have many players or in simple words red ocean market is characterized by large number of firms competing with each other for market share.
  2. In the case of Blue Ocean, a firm creates new demand by introducing products or services which are never seen before which in turn attracts customer towards the product or service while in the case of Red Ocean a firm has to fulfill the existing demand from the consumers.
  3. An example of blue ocean strategy is a car manufacturer introducing driver less car because there is no market for driver less car and if company manages to make a driver less care than it will be an uncontested space as far as car market is concerned and company does not have to fear competition whereas an example of red ocean strategy is FMCG companies selling day to day products like soaps, shampoos and so on because in these markets there are plenty of companies ready to sell a product and any company thinking of entering this market should take into account this factor.
  4. In case of blue ocean strategy the emphasis of the company is on research and development because new products can only be made if company invests funds into research department whereas in case of red ocean strategy the emphasis is on good service and timely delivery to the customers because emphasis in this strategy is the satisfaction of the customers so that they do not go towards the competitors.
  5. In case of blue ocean strategy due to no competition the firm has pricing power or in simple words due to monopoly firm is a price maker while in case of red ocean strategy firm is a price taker due to presence of large number of sellers in the market and therefore a firm not enjoys any pricing power in case of this strategy.

As one can see from the above that red color which is sign of danger has same implication in case of red ocean strategy as far as sales and profits margins of the company is concerned while blue color is more soothing to eye and in case of blue ocean strategy it has same peacefulness as far as company sales and profit margins are concerned.

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