Blue Vs Red Ocean Strategy

We all know that Ocean is vast and limitless and in the case of marketing, the word ocean has paramount significance when it comes to blue and red ocean strategy. In order to understand more about the two concepts let’s look at the difference between blue ocean strategy and red ocean strategy –

  1. Blue ocean strategy refers to that strategy under which company creates new market or operates in uncontested market, in simple words there is no competition in this type of markets whereas in case of red ocean a firm has to compete in a competitive markets which have many players or in simple words red ocean market is characterized by large number of firms competing with each other for market share.
  2. In the case of Blue Ocean, a firm creates new demand by introducing products or services which are never seen before which in turn attracts customer towards the product or service while in the case of Red Ocean a firm has to fulfill the existing demand from the consumers.
  3. An example of blue ocean strategy is a car manufacturer introducing driver less car because there is no market for driver less car and if company manages to make a driver less care than it will be an uncontested space as far as car market is concerned and company does not have to fear competition whereas an example of red ocean strategy is FMCG companies selling day to day products like soaps, shampoos and so on because in these markets there are plenty of companies ready to sell a product and any company thinking of entering this market should take into account this factor.
  4. In case of blue ocean strategy the emphasis of the company is on research and development because new products can only be made if company invests funds into research department whereas in case of red ocean strategy the emphasis is on good service and timely delivery to the customers because emphasis in this strategy is the satisfaction of the customers so that they do not go towards the competitors.
  5. In case of blue ocean strategy due to no competition the firm has pricing power or in simple words due to monopoly firm is a price maker while in case of red ocean strategy firm is a price taker due to presence of large number of sellers in the market and therefore a firm not enjoys any pricing power in case of this strategy.

As one can see from the above that red color which is sign of danger has same implication in case of red ocean strategy as far as sales and profits margins of the company is concerned while blue color is more soothing to eye and in case of blue ocean strategy it has same peacefulness as far as company sales and profit margins are concerned.

0 comments… add one

Leave a Comment

Related pages

income received in advance journal entrydifference between capital and revenue expenditure with examplesadvantages of fiishareholding company definitioncash flow statement in hindiwhat is difference between account payable and bills payablemixed economies definitiondeferred revenue expenditure accounting treatmentpure conglomerate mergerwhat is drawer and draweefdi and fii meaningmerits of urbanisationadvantages of foreign exchange reservesdcf valuation methodadvantages and disadvantages of microeconomicswhat are the disadvantages of market economyfactoring advantagesadvantages and disadvantages of chequeswhat is sundry assetsexamples of current liabilities in accountingadvantages and disadvantages of stock marketdirect investment advantages and disadvantagesdifference between overdraft and term loanregional rural banks meaningdebentures advantages and disadvantageswhat is the meaning of current liabilitiestally full formdisadvantage of factoringwhat is an indirect quotationdemerits of mixed economyskimming price policy definitiondupont analysis chartadvantages of functional organisational structuremonopolistic marketsffe reservewhat is msf ratemerits of market economyfdi & fiiwhat are the advantages and disadvantages of bank loansexamples of skimmingmonopoly price makermerits and demerits of atmipo price of moiladvantages and disadvantages of importingexamples of inelasticredeemable cumulative preference shareswhat is revenue expendituresdisadvantages and advantages of market economywhat is asba in bankingdisadvantages of financial statementsoligopoly disadvantagesreconciliationmeaningcost push inflation occurs whendifference between term loan and overdraftdiscounted cash flow techniquetypes of financial marketdisadvantages of barter systemdemat account introductionwhat are the characteristics of a capitalist economyequity shareholders and preference shareholdersconglomerate organizationadvantages of currency devaluationwhat is complementary goodsexamples of private goodsexpense meaning in hindidisadvantages of command economydifference between job costing and process costingwhat are the advantages and disadvantages of decentralizationcash flow statement wikipediacost pull inflation definitionautocratic decision