The blue ocean is big, open, and empty - an ideal opportunity space for businesses. This is the premise of “Blue Ocean” strategy.
Blue oceans are markets that haven’t been created yet.
The new market doesn’t need to be entirely unique. Similar to re-segmenting a market, a new customer segment can be created in an existing market, such as by:
Creating a a new market creates a “blue ocean” of opportunity. Companies building a blue ocean are creating a previously untapped market without competitors - at least initially. This means that blue ocean companies also need to create customers since they don’t exist yet.
Blue ocean strategy is extremely lucrative. Blue ocean launches account for just 14% of launches, but 61% of profits. This is according to the “Blue ocean strategy” study by Kim, WC & Mauborgne, R in 2015 published by Harvard Business School publishing. Contrast that with the 86% of launches categorized as red ocean that are generating only 39% of profits.
Creating blue oceans is a type of strategy businesses can use to: