Blue Ocean Strategy Paper
Sarah Van Wyk
MKT/421
April 19, 2015
Professor Phyllis Levith

Blue Ocean Strategy Paper Blue ocean strategy is a business tactic that separates the market into “blue” and “red” oceans. Blue oceans relate to all of the industries that do not currently exist in today’s society. They are the “unknown market space, untainted by competition, where demand is created rather than fought over” (W. Chan Kim, 2004). In direct contrast to this notion are red oceans, which relate to existing markets with substantial competition and where demand is already severely exploited. Further reading will provide the importance of the blue ocean strategy in business, an example of a product that has captured this strategy, and an alternative red ocean scenario for that same product.
What is Blue Ocean Strategy?
Blue ocean strategy is a fresh way of thinking in the business world. It is an innovative approach that restructures the corporate mentality to focus on carving out new paths for business and industry. Its prime emphasis is to help companies better stand apart from their competition yet still keep costs low and is achieved by following four basic principles. The first is creating uncontested market space, followed by concentrating on the big picture, then reaching beyond existing demand and lastly, mastering the strategic sequence (W. Chan Kim, 2004). With these guidelines, blue ocean strategies capture new demand, make the competition irrelevant, build differentiation and manage costs effectively.
Why is Blue Ocean Strategy Important?
Blue ocean strategy is an important tactic for firms to implement because it generates significant opportunities for growth that are profitable and realized quickly. In most cases, a blue ocean is created from a red ocean by reworking the limits of an existing market. Defining a new space that fulfills a