Blue Ocean vs Red Ocean

Blue Ocean in Market Space

Uncontested market space.

Blue Ocean in Competition

Make the competition irrelevant.

Blue Ocean in Demand

It creates and capture a new demand.

Blue Ocean in Value

It breaks the value / cost tradeoff

Blue Ocean in Differentiation and low cost

Align the whole system of a company’s activities in pursuit of differentiation and low cost.

Red Ocean in Market Space

It competes on the market space.

Red Ocean in Competition

The goal is to beat the competition.

Red Ocean in Demand

It exploits the existing demand.

Red Ocean in Value

It makes the value / cost tradeoff.

Red Ocean in Differentiation and low cost

Align the company’s activities with its strategic choice of differentiation and low cost.

Blue Ocean Purposes

It can build brands.

Blue Ocean Purposes

This is a strategic move that can create brand equity that lasts for decade

Blue Ocean Purposes

The creators of this never use the competition as a benchmark. Instead, they make it irrelevant by creating a different value for buyers and the company.

Blue Ocean Purposes

It rejects the fundamentals of principle conventional strategy

Conventional Strategy

It is a tradeoff that exists between value and cost. It means that the companies can create greater value for customers at a higher cost or create a reasonable value a lower cost.

Blue Ocean in Conventional Strategy

Successful companies simultaneously pursue differentiation and low cost.

First path on framework reshaping market boundaries

Define industry requirements and focus on being the best within them.

Second path on framework reshaping market boundaries

It looks at the lens of generally accepted strategic groups such as luxury automobiles, economy cars, etc. and strive to stand out.

Third path on framework reshaping market boundaries

It focuses on the same buyer group, be it the purchaser, the user, or the influencer.

Fourth path on framework reshaping market boundaries

Define the scope of the products and services offered by the industry.

Fifth path on framework reshaping market boundaries

Accept the industry’s functional or emotional orientation.

Six path on framework reshaping market boundaries

It focuses on competitive threats and formulate strategy.

Strategy Canvas

A graphically that depicts a company's value proposition compared to competitors, highlighting opportunities to escape competition.

First Purpose of Strategy Canvas

To captures the current state of market space, which allows user to the factors that the industry competes on and where the competition currently invests.

Second Purpose of Strategy Canvas

To propel users to refocus from competitors to alternatives and from customer to non-customers of the industry.

ERRC

A matrix tool that stands for Eliminate, Reduce, Raise, and Create, guiding companies to unlock new Blue Oceans.

Eliminate Questions

Which factors does the industry take for granted that should be eliminated.

Reduce Questions

Which factors should be reduced well below from the industry's standards?

Raising Questions

Which factors should be raised well above the industry's standards?

Creating Questions

Which factors should be create that has never created?

Future Value Curve

A framework that poses questions about eliminating, reducing, raising, and creating factors in an industry to develop new value.

ERRC Grid

A tool that helps companies create Blue Oceans by focusing on the four actions framework to develop a new strategic profile.

First benefits of the ERRC Grid

It pushes them to simultaneously pursue differentiation and low cost to break the value-cost tradeoff.

Second benefits of the ERRC Grid

It immediately flags companies focused only on raising, and creating, solving problems related to cost structure and over-engineering products and services

Third benefits of the ERRC Grid

Managers easily understand it at any level, creating a higher degree of engagement in its application.

Fourth benefits of the ERRC Grid

It drives companies to thoroughly scrutinize every factor in the industry, helping them discover the implicit assumptions they unconsciously make in competing within the market.