Blue Ocean is referred to the marketing of a product where there are less or no competitors for the same in the market. Blue Ocean strategy is applied across various sectors and businesses.
This strategy is used when companies focus on generating more profit and grow in a field where there is no pricing pressure. As when there is a limited room to grow, companies often end up losing their running business due to the pricing pressure in order to sustain their position in the market. The strategy focuses on capturing new demand, and to make competition irrelevant by introducing a product with advance features. It also helps the company in generate huge profits as the product can be priced a little higher because of its unique features.
It focuses on generating a demand for a new product that is currently not in existence, as there is a deeper potential in the market place that hasn’t been explored yet. Also the marketers get the first mover advantage. Most blue oceans are formed within red oceans by expanding the current industry boundaries. The way to a successful blue ocean strategy is right place, right time and with the right thing, which means finding the right market opportunity and making the competition irrelevant.
An example of a successful execution of a blue ocean strategy is the iPod. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go.” Apple looked beyond what was in the market at that time and introduced a product that created a new industry in and of itself. Apple looked beyond what customers were asking for and created a successful product.
For a manager it is necessary to identify the difference between the red ocean strategy and the blue ocean strategy. For this, they need to identify what their target market needs and what they currently don’t have then look in for the existing organizations who are serving the audience.