Difference between Red Ocean Strategy and Blue Ocean Strategy

Alan Joseph Alan Joseph
Jan 8, 2022 6 min read
Difference between Red Ocean Strategy and Blue Ocean Strategy

Blue Ocean strategy and Red ocean strategies are widely used by startups. However, it is also perceived in MSMEs as well as Multinational enterprises and these strategies help them in finding the right market. Let’s look at what exactly is blue ocean and red ocean strategy.

What is the Red Ocean Strategy?
Strategies to Enter Red Ocean Market
Red Ocean Strategy Examples
Red Ocean Strategy Examples in India
What is the Blue Ocean Strategy?
Strategies to Enter the Blue Ocean Market
Blue Ocean Strategy Examples
Blue Ocean Strategy Examples in India
FAQ

Red Ocean vs. Blue Ocean Strategy
Red Ocean vs. Blue Ocean Strategy

What is the Red Ocean Strategy?

In a red ocean market or a red ocean strategy, there is a concentrated market and will be highly competitive. These are normally found by the small but unpopular market. In a red ocean market, the competition would normally be high and the existing companies compete with each other using competitive methods.

One of the examples of a red ocean company can be different automobile companies. All the various companies are competing with each other to solve the same problem or the demand faced by the consumers. A red ocean market is highly competitive and would be riskier for a new company especially a startup.

Strategies to Enter Red Ocean Market

If you are planning to enter into a market that is mostly aligned towards a red ocean market then you will have to create a disturbance in the market. You will have to create a specific demand for your own product by creating a new product or an innovative product or service.

While creating a disturbance in the market, you will be able to gain most of your customer’s attention, and later on, it depends on your consumers to stick to your brand.

In a red ocean market, the main focus of your brand should be on beating the competition to gain the most value and the financial gain from overcoming the competition and attracting consumers towards your brand.

One of the most important ways to win over in such a market is by providing a lot of value for your consumers. The consumers should get the most out of their money this will help in winning over more than 60 % of the market consumer base.

Red Ocean Strategy Examples

Apple

Apple launched its iPhone in 2007 when the market was dominated by companies like Nokia, Sony and Motorola. Apple had to create a user base where users were willing to spend $600 on a phone. How did apple disrupt the market? they created a much better smartphone than its competitors which we all know today as iPhone 2g.

Steve Jobs with First iPhone
Steve Jobs with First iPhone

Five Guys

Five Guys is an American fast restaurant chain founded in 1986. Five Guys was planning to enter the fast-food market where its competitors, Mcdonalds and KFC were already dominating the market. How did it make it big in a highly competitive market? one of the reasons was it didn't spend millions on advertising and presented good burgers with superior quality. It is now one of the top fast-food chains in America.

Red Ocean Strategy Examples in India

Spice Jet

SpiceJet is a great example of a Red Ocean company in India, SpiceJet is a low-cost airline that has acquired customers by offering services much lower than its competitors but it is always in direct competition with other companies.

Jio

Jio Logo
Jio Logo

As Jio entered the market it created a disturbance by providing free services that disrupted the whole telecom industry.

What is the Blue Ocean Strategy?

A blue ocean strategy is focused more on the new trends and demands of the consumers in creating a new market based on it. Blue oceans are a more unoccupied market and not much known. The blue ocean market is mostly concentrated on providing value and is created based on that.

In the blue ocean strategy, a new product or service is created which is not available in the market which would solve a problem that is already there in the market. The blue ocean market pays a lot of attention to value and innovation aspects.

Strategies to Enter the Blue Ocean Market

The first and most important strategy is to identify a new demand or a new trend for a product or service. Before entering the market, you will have to conduct thorough research and analyze whether there is a new trend or a new demand in the market. You will have to analyze whether that demand is being met or whether the current products or service does not meet the demand.

In this market, it is not important to concentrate on the competitors as they are involved in providing the products or services that may or may not satisfy the demands of the consumers but what more important is to concentrate on the consumers and their needs and satisfaction.

The most important aspect of this market is that it is much more flexible which means if a new demand arises in the market, you can just create a new version of the product or come up with a new product that solves the requirement of the consumers.

The next step is to focus on a smaller niche and by doing so you will be able to design your product or service into a wider market targeting a specific group of people and will be able to build your own loyal consumers.

Blue Ocean Strategy Examples

Uber

Uber Logo
Uber Logo

Uber is a great example of the Blue Ocean strategy. It solved one of the major problems of the consumers while booking cabs which was, denial of services, meter issues, and unwanted arguments.

Airbnb

Airbnb Logo
Airbnb Logo

Airbnb is an online marketplace that acts as a mediator who wants to rent out their homes to people who are looking for places for accommodation. Airbnb eliminated the problems of travellers in finding a hotel with quality service. Airbnb is one of the most successful companies in the lodging industry with a revenue of $3.4 billion in 2020.

Blue Ocean Strategy Examples in India

Oyo Rooms

Oyo Rooms Logo
Oyo Rooms Logo

Oyo Rooms is a hotel chain founded by Ritesh Agarwal. Oyo Rooms entered an unexplored market, budget hospitality. It solved the problems of consumers who were looking for a decent hotel at an affordable price.

Conclusion

For a startup, both Blue Ocean and Red Ocean strategies aren't a lot of worries as it absolutely relies on the possibility that you have and how well you execute it. In any case, the shots at filling in Red Ocean is more on the off chance that you have the option to make your image more accessible to the client and how great you promote your product, assuming your product, say, for instance, is of FMCG classification Red Ocean Strategy will be applied.

What's more, on the off chance that it is of a few, for instance, gadgets or tech-based that give something which was not accessible before then Blue Ocean Strategy will be applied.

FAQ

Which companies use the blue ocean strategy?

iTunes, Bloomberg, and Ralph Lauren are some of the top companies that used the blue ocean strategy.

Does Netflix use the blue ocean strategy?

Yes, Netflix used the blue ocean strategy, It is a popular subscription-based streaming service.

What is an example of the red ocean strategy?

Indigo and Spice Jet in India are examples of Red Ocean strategy, they are providing low-cost airlines which have acquired customers but are always in direct competition with one another.

Must have tools for startups - Recommended by StartupTalky

Subscribe to StartupTalky

Get the latest insights delivered to you right in your inbox

Great! Next, complete checkout for full access to StartupTalky.
Welcome back! You've successfully signed in.
You've successfully subscribed to StartupTalky.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.