Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure.
Blue Ocean Strategy can be applied across sectors or businesses. It is not limited to just one business.
In today’s environment, most firms operate under intense competition and try to do everything to gain market share. When the product comes under pricing pressure there is always a possibility that a firm’s operations could well come under threat. This situation usually comes when the business is operating in a saturated market, also known as ‘Red Ocean’.
When there is limited room to grow, businesses try and look for verticals or avenues of finding a new business where they can enjoy uncontested market share or ‘Blue Ocean’. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition.
The strategy aims to capture new demand and to make competition irrelevant by introducing a product with superior features. It helps the company in making huge profits as the product can be priced a little steep because of its unique features.
Example: With the creation of Viagra, Pfizer created a blue ocean in lifestyle drugs by going beyond the boundaries of the pharmaceutical industry at the time. Pfizer’s wildly successful blue ocean strategic move that launched Viagra challenged the functional-emotional orientation of the pharmaceutical industry. It shifted its focus from the pharmaceutical industry’s largely functional orientation – medical treatment – to lifestyle enhancement, an emotional orientation.
