Blue Ocean Analysis

Blue Ocean Strategy: How to Create Uncontested Market Space and make the Competition Irrelevant" by Chan Kim and Renee Mauborgne was released in 2005 and became an international bestseller. It takes into account a study of 150 strategic moves that span over 100 years and through thirty industries, and argues why tomorrow's leading companies will find their success comes from not battling direct competitors, but instead by creating uncontested market space known as "blue oceans." The book starts with a wonderful example of "blue ocean", Cirque du Soleil. Cirque du Soleil was formed in 1984 by a group of street performers, and has since become one of Canada's largest cultural exports. It has had dozens of productions that have been seen by

So how did Cirque profitably increase revenues in such an unattractive environment? The slogan for one of the first Cirque productions says a lot: “We reinvent the circus.” Cirque did not make

In the business world, red oceans represent all the industries in existence today. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood. Companies will try to outperform their rivals in order to gain a greater share of existing demand. However, as the space gets more crowded the forecast for profits and growth are reduced. Increasing competition then turns the water bloody. On the other hand, Blue oceans denote all the industries that are not in existence today. This is the unknown market space that is so far untainted by competition. In blue oceans, demand is created instead of being fought over. There is large opportunity for growth that can be both profitable and rapid. There are two main ways to create blue oceans. In the first, companies can give rise to completely new industries. However, in a lot of cases, a blue ocean is created from within a red ocean when a company changes the limitations of an existing industry. This is what Cirque did. In breaking through the boundary that had previously separated circus and theater it made a new and profitable blue ocean from within the red ocean of the circus