Definition of the Red Ocean Strategy

Professors of strategy at INSEAD, Renée Mauborgne and W. Chan Kim, devised the Red and Blue Ocean Strategy in their book 'Blue Ocean Strategy,' using the seas as an analogy. The red seas, according to the professors, reflect all of today's industries. It is the well-known commercial room in which firms in the same industry compete to outperform one another to gain a more significant market share. Since this industry is characterized by intense competition, the ocean becomes bloody and red, giving rise to the word "Hot Ocean Strategy."

Definition of the Blue Ocean Strategy

Blue waters, in contrast to the bloodied red oceans, reflect emerging industries and businesses. It refers to the market's untapped capacity. Since there is no competition, there is an untapped consumer room that has yet to be tainted. When it comes to opportunities and profitable development, this room is deep, huge, and strong, much like the beautiful blue ocean.

Comparing and contrasting Red and Blue Ocean Strategies

Let's look at the Blue and Red Ocean Tactics now that we've clarified what they are. When making distinctions, there are many factors to remember. They're as follows:

1. The focus perspective

Companies in the Red Ocean usually concentrate on their new clients. They strive to boost consumer service and attract their loyal clients. Blue Ocean firms, on the other hand, are focused on expanding the industry's reach. They continue to carve out a different market niche to target buyers who have never bought anything in the industry before.

2. From a competitive standpoint

Since the Red Ocean idea is already tested, other firms are attempting to cash in on the proven concept and join the market, resulting in more rivalry. As a result, there is already rivalry, with other firms copying the same tried-and-true recipes. There is no competition for Blue Ocean firms since they are entering an uncontested industry. Someone in the old red market may lose a customer if someone in the current uncontested market gains a customer. As a result, for one business to prosper, another must fail. In the long term, players in uncontested markets usually are winners.

3. Aspects of interest

Companies that use the Red Ocean Strategy are already up to a lot of competition, as many other companies have similar services. To stay competitive, they must consistently outperform the competition. In contrast, since there is no way to duplicate an inexistent concept, Blue Ocean firms appear to find the market meaningless. This feature offers creative businesses an advantage, which also leads to commercial success.

4. The demand perspective

Companies in the Red Ocean seek to take advantage of current demand. They make an effort to have a superior retail experience to draw consumers and persuade them to choose them over their competitors. It is the same amount of room that red ocean corporations had access to. Blue Ocean firms, on the other hand, try to generate new demand and win the market. They place a premium on building high demand to draw buyers who have never contemplated joining the market before.

Examples of red and blue ocean strategy companies

Indigo and Spice Jet in India, Ryan Air in Europe, and Southwest in the United States have effectively entered an increasingly crowded market for short-haul airlines. There are no-frills, low-cost carriers that have gained a following but are still in direct competition. Customers have been given a brand modern, creative experience by Blue Ocean firms such as Ford Motor Co, Uber, Apple Inc., iTunes, and Cirque de Soleil. These businesses not only generated a new opportunity but also managed to grab the collective consumer imagination.

Conclusion:

Companies must decide their plan from the start to manage a profitable enterprise. While the Red Ocean Strategy will attract consumers, it is still up against rivalry, while blue ocean firms maintain a competitive advantage. Visit the Dealmoney’s website to learn more about the Red and Blue Ocean Strategy.