In 2005, Chan Kim and Renee Mauborgne from INSEAD published a book on business strategy named Blue Ocean Strategy. According to them, while many companies primarily focus on going one-up on the competition, the best way to compete is to stop trying to beat the competition. Markets are typically classified into red oceans (known or existing markets) and blue oceans (non-existent, unknown or untapped markets). In red oceans, companies will try to take market share from each other while blue oceans represent highly profitable growth markets as the boundaries are yet to be defined.
Examples of blue ocean strategy used by companies –
Company – Industry – new blue ocean market
Crocs, Inc. – Shoe industry – New lightweight footwear (Fashionable and at low price)
Air Asia – Airline – Point to point travel system, easy booking system
ING Direct – Banking – Superior interest rates on savings with no fees
Nintendo – Electronic games – Reducing complexity and improving ease of use and fun
Kiva.org – Non-profit – New microcredit model