What is Blue Ocean Strategy?

Blue Ocean Strategy is about creating uncontested market space (Blue Ocean) rather than competing in crowded markets (Red Ocean). It focuses on value innovation—simultaneously pursuing differentiation and low cost.

What is the Four Actions Framework?

The four actions are: Eliminate (which factors to remove), Reduce (which to decrease below standard), Raise (which to increase above standard), and Create (which new factors to introduce).

Who created Blue Ocean Strategy?

W. Chan Kim and Renée Mauborgne, professors at INSEAD, introduced Blue Ocean Strategy in their 2005 bestselling book of the same name.

What is a Strategy Canvas?

A Strategy Canvas plots competing factors on X-axis and offering level on Y-axis. It visualizes your value curve against competitors and reveals opportunities for differentiation.

Is Blue Ocean Strategy risky?

Yes, creating new markets involves uncertainty. But the framework provides tools to reduce risk. The bigger risk may be staying in a Red Ocean with diminishing returns.

Blue Ocean Strategy: Create Uncontested Market Space

Blue Ocean Strategy is a strategic framework for creating uncontested market space through value innovation, making competition irrelevant rather than battling in crowded markets.

What Is It?

Blue Ocean Strategy, developed by INSEAD professors W. Chan Kim and Renée Mauborgne, challenges the conventional focus on beating competition. Instead, it advocates creating new market space—a "Blue Ocean"—where competition is irrelevant.

Red Ocean: Existing markets with defined boundaries, known competitors, and constant battle for market share. Competition is intense, margins shrink. Blue Ocean: Uncontested market space created through value innovation. New demand is created rather than fought over.

The Four Actions Framework guides strategy creation: Eliminate factors the industry takes for granted, Reduce factors well below industry standard, Raise factors well above industry standard, and Create factors the industry has never offered.

Blue Ocean thinking complements competitive analysis from Porter's Five Forces and positioning from Competitive Positioning Map by asking: instead of competing better, can we compete differently?

Blue Ocean vs Red Ocean and Four Actions Framework — Blue Ocean Strategy: Create uncontested market space

Quick Reference

Complexity

Med-High (6/10)

Time to Decision

2-4 weeks

Data Required

Medium-High

Team Size

5-20

Objectivity

Medium

Learning Curve

1-2 weeks

When to Use

Markets are commoditized with thin margins
Competition is intense and growing
Looking for breakthrough growth opportunities
Willing to challenge industry assumptions
After positioning analysis shows crowded space

When NOT to Use

Current market position is strong and profitable
Risk appetite is low
Need incremental rather than transformational change
Limited resources for market creation

Key Strengths

Innovation Focus: Drives breakthrough thinking
Escape Competition: Creates new demand
Value + Cost: Pursues both simultaneously
Practical Tools: Four Actions, Strategy Canvas

Key Weaknesses

Risky and uncertain outcomes
Blue Oceans hard to identify
Requires significant change
Competitors may follow quickly

How It Works

1 Primary Input	Industry assumptions, competitor offerings, non-customer insights
2 Data You Need	Competing factors analysis, customer pain points, alternative industries
3 Primary Output	Strategy Canvas, value innovation concept, market creation roadmap

Deep Resources

Official Blue Ocean Strategy Siteblueoceanstrategy.com

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