Systematic alignment: A red ocean company has to choose (to an extent) between differentiation or low cost and align its whole system with that choice.Businesses in the blue ocean do not have to stick to this trade-off. The value-cost trade-off: Brands in the red ocean have to make the value-cost trade-off, where they either offer greater value at higher prices or create reasonable value at lower costs.new demand: The Red Ocean Strategy is about capitalizing on existing demand, while the Blue Ocean Strategy creates new demand. innovation: The Red Ocean Strategy is about beating your competitors in the market to get a greater share of a shrinking profit pool, whereas the Blue Ocean Strategy focuses on innovation. In the blue ocean, you can build a new market. new market: Businesses can use the Red Ocean Strategy to participate in the known market space. There are key differences between these two strategies. The differences between the Blue Ocean Strategy vs.

It aims to get past existing industry structures and tap into a new market with plenty of demand. The Blue Ocean Strategy is focused on innovation. Growth is limited in this marketplace because thousands of other ‘fish’ occupy the same space. The main focus of the Red Ocean Strategy is on gaining a competitive advantage through better products or lowered pricing. As a result, brands within this ocean struggle to grow and profit due to the cut-throat competition, hence the term red ocean.

You’re creating a product or service that’s adding to existing resources.Įxisting markets are filled with hundreds or thousands of similar products. So a new business in the red ocean is just another drop. This ocean or marketplace has market boundaries and rules that are well known and accepted, both by businesses and consumers. The red ocean encompasses all industries known today.

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