The concept of “strategy” has always been directly linked with competition. Whenever one talks about strategy, the first thing that comes to mind is competition. That is because we have been conditioned to think in a certain way. Blue Ocean Strategy (BOS) is a fresh approach and an alternate way of looking at strategy.
In a globally competitive world, where supply is greater than demand, competition is becoming fiercer everyday. Customers want a lot more and at a better price. As a result, companies find themselves struggling and competing to hold on to their existing market shares and are therefore stuck in the realm of a Red Ocean (competition).
BOS as a concept was not given a formalized structure until 2005. Most BOS success stories in the past have been through trial and error. BOS is not a new concept but one which has always been in existence and worked on over the years. BOS as a process is not intuitive which is why a formal framework was required for repeated use of the strategy. Prof Kim and Mauborgne, for the first time, formally introduced “value innovation” as a concept in 1997. They did not invent the concept, they discovered it. Just like Newton discovered the Law of gravity. Law of gravity was always in existence and it was only with the observation of a falling apple did Newton discover it for us. Similarly, a systematic way of thinking blue was discovered by giving a fresh approach to strategy. People have always learned, applied, talked, discussed about competitive strategy (Red Ocean). Red Ocean is a part of our business and thought processes and is therefore the only concept we look at while formulating strategies. Blue Ocean does not require a complete change in one’s perspective towards business. Just a one degree shift in our perspectives will present a whole new gamut of opportunities. In other words, it is a way of adapting our existing thought processes and that is precisely why BOS is called “systematic creativity”. The concept of Blue Ocean is not new, but the theoretical framework is!
Blue Ocean Strategy coexists alongside Red Ocean Strategy (Competitive Strategy). Every blue ocean move will ultimately turn into a red ocean. But we believe that a Blue Ocean move will give the company a head start it requires to understand and conquer the existing competition. Competition will ultimately catch up but it typically takes about 2-3 years for a blue ocean move to be emulated.
Blue Ocean is extremely helpful when a company finds itself constrained in a particular situation. That is when the company has maximum potential to think differently. Blue ocean facilitates the process of thinking different.
Basic difference between the two:
