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Writer's pictureSimge Güner

Red Ocean & Blue Ocean in Business

Updated: Aug 27, 2022

Let’s define what Red Ocean and Blue Ocean are.


Red Ocean reflects the existing market sector, which is defined by 'bloody' competition.


Blue Ocean, which is the untapped market potential, is symbolised by the deep blue water.


Red and blue oceans are not two separate oceans. It’s one vast ocean.


Both blue ocean and red ocean strategies can be useful in the same organisation when applied to different products.


Apple has benefited from both blue ocean and red ocean methods.


It introduced the iPhone into a smartphone market packed with major rivals as Nokia, Sony Ericsson, and Motorola, a red ocean. By experimenting and pushing their limits, they created a product that was ahead of its time and rendered the competitors obsolete.


When Apple released iTunes, though, they used a blue ocean strategy. They disrupted the value-cost trade-off through value innovation, devising a win-win solution that allowed artists to earn royalties and customers to purchase specific songs without purchasing the complete album.


As you consider the blue ocean versus red ocean debate, keep in mind that no matter which ocean you choose to sail in, it's critical to create value for the consumer and always improve your offering.


Red Ocean Strategy

New Market

Compete in existing market

Create uncontested market

Beat the competition

Make competition irrelevant

Capture existing demand

Create new demand

Make the value-cost trade-off

Break the value-cost trade-off

Strategic key differentiation

Pursuit of total differentiation

iPhone - unique but not first

iTunes - never before

Existing Market

New Market


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