Blue Ocean Strategy: Concepts, Principles, and Applications
This paper provides a comprehensive overview of Blue Ocean Strategy (BOS), the strategic management framework introduced by W. Chan Kim and Renée Mauborgne in 2004. It traces the evolution of the concept from its historical roots to its formal articulation, contrasts Blue Ocean with Red Ocean thinking, and explains the six formulation and execution principles designed to minimize strategic risk. The paper also explores value innovation, the dynamic nature of BOS, and its continued relevance in an era of globalization and information technology. Historical examples — including Ford, IBM, Apple, and Compaq — illustrate how BOS has driven lasting brand equity and market creation across more than a century of business history.
- Introduction to Blue Ocean Strategy: Defines BOS and contrasts it with Red Ocean competition
- Evolution of Blue Ocean Strategy: Traces BOS origins and publication history
- Blue Ocean vs. Red Ocean: Compares the two strategic frameworks and value innovation
- Six Principles of Blue Ocean Strategy: Lists six risk-reducing formulation and execution principles
- Blue Ocean Strategy as a Dynamic Process: Argues BOS requires ongoing adaptation, uses Body Shop case
- BOS Relevance to Today's Business Challenges: Examines BOS examples and modern applicability
- Conclusion: Summarizes BOS value as a dynamic, enduring strategy
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What makes this paper effective
- The paper systematically builds from concept definition through historical context, comparative analysis, and practical application, giving readers a logical progression through the topic.
- Concrete historical examples (Ford Model T, IBM 360, Apple II, Compaq ProSignia) ground abstract strategic theory in recognizable, real-world outcomes.
- The paper uses direct quotations from Kim and Mauborgne to anchor claims to primary sources, lending authority to key arguments.
- The section on BOS as a dynamic process, using The Body Shop as a cautionary case, adds analytical depth by showing how the strategy can fail when misapplied.
Key academic technique demonstrated
The paper demonstrates effective use of a compare-and-contrast structure to distinguish Blue Ocean from Red Ocean strategy. By clearly articulating the three defining elements of each approach, the writer shows how BOS does not simply improve on existing competitive logic but operates from fundamentally different premises — a technique that clarifies theoretical novelty for the reader.
Structure breakdown
The paper opens with a conceptual introduction, moves into historical evolution, then contrasts BOS with Red Ocean strategy. The six principles are presented as a numbered list for clarity. Two analytical sections follow — one on BOS as a dynamic process and one on contemporary relevance — before a summary conclusion. Citations follow APA author-date format throughout.
Introduction to Blue Ocean Strategy
Blue Ocean Strategy (BOS) is a concept in strategic management introduced by Professor W. Chan Kim and Renée Mauborgne in 2004. After conducting detailed research, Kim and Mauborgne found that most companies rely on market segmentation and price competition to attract customers. This results in increasing costs, decreasing rewards, and the creation of a "Red Ocean" in which all competitors fight over the same space. To maintain growth, therefore, companies must go beyond competition by creating Blue Oceans — winning not by competing in existing markets but by making competition irrelevant through the creation of new market space.
Blue Ocean Strategy does not aim to achieve outstanding performance within an existing industry, as is the goal in Red Ocean thinking. Instead, it focuses on creating a new market space — the "Blue Ocean" — and rendering competition irrelevant. As Kim and Mauborgne (2005a, p. 171) write:
"Head-to-head competition results in nothing but a bloody red ocean as rivals fight over shrinking profits. Success comes not from battling competitors, but from making the competition irrelevant by creating 'blue oceans' of uncontested market space."
Evolution of Blue Ocean Strategy
Blue Ocean Strategy was introduced by Professor Kim and Mauborgne in 2004. They developed this new concept of strategic movement after studying 150 strategic moves taken across 30 industries over a period of approximately 120 years — from 1880 to 2000 (Kim & Mauborgne 2004, p. 4).
The framework was formally published in 2005 as Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, and it has since become an international bestseller. Managers and business executives around the globe have taken keen interest in this new approach to strategic management and are working to implement it.
The core idea of BOS — creating and capturing uncontested market space — is not entirely new. Michael Porter, Professor at Harvard Business School and an expert in competitive strategy, has long argued that successful strategy means doing things differently, rather than engaging in direct competition where everyone does the same thing. In other words, it means avoiding the red waters where sharks exist and instead moving to blue waters where there is no competition. This concept is even older than Porter's formulation; it is said to trace back to a Chinese general who advised that competition should be avoided in order to achieve the best outcomes in warfare.
References
Andersen, P.H. & Strandskov, J. (2008). "The innovator's dilemma: when new technologies cause great firms to fail / leading the revolution / blue ocean strategy: how to create uncontested market space and make the competition irrelevant." Academy of Management Review, 33(3): 790–794.
Buisson, B. & Silberzahn, P. (2010). "Blue Ocean or fast-second innovation? A four-breakthrough model to explain successful market domination." International Journal of Innovation Management, 14(03): 359–378.
Kim, C. & Mauborgne, R. (2004). "Blue Ocean Strategy." Harvard Business Review.
Kim, C. & Mauborgne, R. (2005a). "Value innovation: a leap into the blue ocean." Journal of Business Strategy, Vol. 26 No. 4, Emerald Group Publishing Limited.
Kim, C. & Mauborgne, R. (2005b). "Blue Ocean Strategy: from theory to practice." California Management Review, Spring 2005, Vol. 47, No. 3.
Kim, C. & Mauborgne, R. (2007). "Blue Ocean Strategy." Leadership Excellence, Vol. 24 No. 9.
Kim, W.C., Mauborgne, R., et al. (2008). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business School Press.
Kim, C. & Mauborgne, R. (2009). "How strategy shapes structure." Harvard Business Review, Vol. 87 No. 9.
Parvinen, P., Aspara, J., et al. (2011). "Awareness, action and context-specificity of Blue Ocean practices in sales management." Management Decision, 49(8): 1218–1234.
Pitta, D. & Pitta, E. (2008). Transforming the Nature and Scope of New Product Development. Department of Marketing and Entrepreneurship, University of Baltimore, Baltimore, Maryland, USA.
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