RED

OCEANS BLUE

Amira Abdelkader - Mohab El Sherif

OCEANS
CONTENT
1. Blue Ocean Strategy (2004); the terminology
2. Red Oceans vs. Blue Oceans; the color associations
3. Red Oceans
Characteristics
Strategies
Example

4. Blue Oceans
Characteristics
Strategies
Example

5. Summary
Blue Ocean Strategy (2004); The Book

● Chan Kim & Renée Mauborgne coined the terms ’red ocean’ and ‘blue
ocean’ to describe the market universe.

● Professors of Strategy at INSEAD

‫إنسياد المعهد األوروبي إلدارة األعمال‬
and Co-Directors of the INSEAD Blue Ocean Strategy Institute.

● “Blue Ocean Strategy” (2004), was selected by Thinkers50,

the Global Ranking of Management Thinkers, as one of the
top 10 classic books on Management (2022).
 RED BLUE

● Passion ● Calm and Relaxing

● Hate ● Symbolizes depth, stability, and
● Love intelligence
The industry is characterized by: The industry is characterized by:
● Strong Competition ● An advantageous and promising
● Tension, which makes it difficult for new environment, with lots of new
solutions to coexist and compete with opportunities
other projects
RED OCEANS - CHARACTERISTICS
● The existing market space

● Cutthroat competition turns the ocean red with “Blood”

● Bloody water with fish eating each other

RED OCEANS - STRATEGY
● Makes the most of existing demand

● No attempt to push beyond the visible boundaries of the marketplace

● Beating the competition with aggressive marketing, better pricing and outstanding user
experience

● An organization has to choose between creating more value for customers and low prices
EXAMPLE
- Uber launched in San Francisco as an on-demand black car/limousine service

- Luxury car services were not accessible through an app

- This differentiation led to the successful siphoning of market share from black car and
limousine services

- Uber exploited an existing market and strategically prioritized differentiation over

affordability (value-cost trade-off)

- Values: eliminated the pain points of traditional cabs, converted non-cab users into
customers
BLUE OCEANS - CHARACTERISTICS

● The untapped market potential

● Deep blue waters
● No competition
BLUE OCEANS - STRATEGY
● Creates new demand
● Searches for opportunities to create new markets where none exist
● Creates alternatives, be it products or customers
● An organization has an attempt to achieve both: differentiation and a low cost,
opening up a new market space
EXAMPLE
● Before the emergence of Apple’s iTunes, people purchased CDs or burned CD-Rs with
sites like Napster that offered downloadable mP3s

● iTunes disrupted the scene with an affordable alternative

● The hardware (iPod) created the demand for the software (iTunes.) Thus, an entirely
new market was born
SUMP UP
Red Ocean vs. Blue Ocean Strategies

Existing Market vs. New Market Creation

Beat Competition vs. Make Competition Irrelevant

Capture Existing Demand vs. Create New Demand

Make Value–Cost Trade-Off vs. Break Value–Cost Trade-Off

Questions ?