Market growth strategies categorize strategies on the basis of overlap between consumer needs, competitor offerings, and the brands’ competencies. Red ocean strategy and blue ocean strategy are two types of market growth strategies that subdivide growth strategies based on which tactic is to be used (e.g., pricing, promotion, distribution, product).

Blue ocean

The blue area, representing what Kim and Mouborgne refer to as blue ocean, is the space where your competencies allow you to solve consumers’ problems that your competition either cannot solve or is not currently addressing.

  • Red ocean strategy involves pursing markets that are occupied by competitors-think: shark-infested, bloody waters. In these waters, the key is to outdo the competition and gain as much market share as possible.

Companies like Uber and Lyft have moved into such waters for local transportation problems

They have been tremendously successful due to a lack of competition for consumers who, until now, have had no viable solution in the space for them

  • By making transportation easier and quicker, they have offered solutions to problems that public transportation official and taxi companies did not realize were previously unsolved.

The Bottom Line

Even in the most saturated markets, consumers are still seeking innovations that will solve their currently unsolved problems

  • By measuring and tracking consumers’ problems, it is possible to identify where the bluest opportunities lie
  • New product development efforts should begin with a careful exploration of consumer’s problems

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