Blue & Red Ocean Strategy

1. NAVJEEVAN INSTITUTE OF MANAGEMENT
PPT ON
“BLUE & RED OCEAN STRATEGY”
NAME OF STUDENT AADESHKUMA R V. BHOSALE
CLASS : MBA II
GUIDED BY : PROF. RITA CHAUDHARI MA’AM

2. BLUE OCEAN
• Blue ocean denotes all the industries not in existence today –
the unknown market space, unexplored and untainted by
competition.
• Like the ‘Blue’ ocean, it is vast, deep and powerful – in terms of
opportunity and profitable growth.
• It is about creating and capturing uncontested market space.
• BOS is all about minimizing risks due to competition threat and
maximizing opportunity by exploring new boundaries.

3. RED OCEAN
• Red Oceans are all the industries in existence today – the known market space,
where industry boundaries are defined and companies try to outperform their
rivals to grab a greater share of the existing market.
• Cutthroat competition turns the ocean bloody red. Hence, the term, ‘red’
oceans.
• ROS is head to head battle where the players of a particular segment compete
with each other remaining in the same market space.
• In short, strategy used to fight and win the existing competition is Red Ocean
Strategy.

5. CHARACTERISTICS OF BLUE OCEAN
• It is grounded in data. W Chan Kim and Renee Mauborne developed this
strategy by undertaking prolonged research based on large scale data.
• BOS follows differentiation and low cost adopter.
• It creates Uncontested Market Space.
• It creates a methodology which can be used to create a unique space in the
industry.
• It provides a Step-by-Step Process which can be followed to create a unique
space in the industry.

6. FOUR ACTION FRAMEWORK

7. CHARACTERISTICS OF RED OCEAN
• ROS focuses on competing within existing marketplace.
• The main objective is to win the competition.
• They concentrate on taking advantage of existing demand.
• This strategy concentrates on execution such as lower cost base,
better marketing, etc.

8. EXAMPLE OF BLUE OCEAN
• NETFLIX(2007) is famous example of BOS done well. When a firm
shifted from a DVD rental company to a streaming service, it started
a seismic shift in the way we consumed movies and television and
became hugely successful.
• At the time the mail service was doing well but they decided to get
rid of it and went right ahead with streaming.
• Amazon prime, Disney+ started emerging in the same market, so
they has pushed themselves and started ‘Netflix Originals’.

9. EXAMPLE OF BLUE OCEAN
• UBER was founded in 2009, customers looking to get from point A
to point B without their own vehicle had to rely primarily on taxis
to obtain a private mode of transportation.
• Uber recognised industry’s shortcomings- including limited
payment options, lack of customer trust, absence of location
tracking- and decided to create a new type of mobility service that
would compete in a slightly different space.
• Uber sought out drivers who were willing to use their own cars to
provide on-demand rides requested via mobile app. Today Uber
has annual revenues of over 11$ billion and more than 19,000
employees.

10. EXAMPLE OF BLUE OCEAN
• IPL: Launch of IPL has used BOS
with the help of analytical tools
and frameworks. It opened new
market space ‘cricketainment’
(cricket + entertainment)

11. EXAMPLES OF RED OCEAN
• Indigo and SpiceJet are instances of companies
adopting the Red Ocean strategy; they offer low-
cost airlines that have gained customers but are
continually in direct competition with one another.
• Iphone : Smartphones were already existing in the
market. Apple developed a much better mobile
phone, which was years ahead of its competitors.
They had to fight a few years before people agreed
to spend $600 on a phone. At that time, there were
multiple affordable alternatives.

12. STRATEGY CANVAS
• The strategy canvas is basically a tool to visually show how a company will or
has created a blue ocean strategy. It is used to plot how the current competitors
compete in a market space, what factors they compete on and how your
company and the competition scores on each key factor.
• It is also used to show how a company can change its focus to separate itself
from the competition and attract non customers currently to the industry to
become customers.
• It is a basic line chart with the competing factors along the x-axis and the offering
level along the y-axis. See the chart below for an example. The example below
shows how Netflix has created a Blue Ocean for them selves in the television
program service market.

14. DIFFERENCE BETWEEN BLUE & RED OCEAN