When coming up with a new business idea — or trying to position your current company in the market — it’s vital to understand the concept of a red ocean vs blue ocean. This is the difference between standing out in the crowd and blending into the background.
In this blog, I’m going to tell you what the red ocean vs blue ocean is, how to come up with a blue ocean strategy, and how the right business strategy will help you excel in your respective market space and increase sales.
What is a Red Ocean vs Blue Ocean?
Let’s back up and start at the beginning! First, let’s define red oceans and blue oceans.
Red oceans represent an environment where survival becomes the main goal.
A red ocean is packed with sharks (your competitors). They’re all fighting over the same tasty fish (your audience) within well-defined industry boundaries. This makes for a bloody red ocean that your company will simply drown in.
If you want to survive in red oceans, you’re going to have to claw your way to the top of the food chain. And even if you succeed, you might be left with nothing but the scraps. Many brands are in simultaneous pursuit of buyers’ attention, limiting the potential for profitable growth.
In other words, a red ocean is an existing/known market space with a lot of competition.
On the other hand, we have blue oceans.
A blue ocean is fresh, clean, and clear. There might be a shark here and there in blue oceans, but in general, you’re going to find a lot of delicious fish (your clients/customers) that are ripe for the taking.
In a blue ocean, you can more easily stand out, connect with the people you want, and get (and keep) their attention. You don’t have to constrain yourself to the same industry boundaries. You’re creating demand by leveraging a largely untapped audience of eager shoppers.
In other words, a blue ocean is a mostly uncontested market space with little competition.
An Example of Red and Blue Oceans
Let’s illustrate red and blue oceans with real-life examples.
Supplements Getting Lost in a Known Market Space
The supplement industry is worth around $150 billion. It’s expected to grow to over $240 billion by 2028. Brands see these figures and understandably think, “I want a piece of that!”
The problem is that this existing market space is so incredibly saturated that most supplement brands will try and fail to gain any real traction. Some figures tell us that there are well over 1,000 supplement brands in the US alone, and that number is steadily growing every year.
Plus, because there’s little regulation around the supplement industry, anyone can come up with a magic pill or potion, slap a label on a bottle, and sell it online.
There is indeed existing demand, but there is also cutthroat competition. This is an example of a very red ocean.
No-Heat Hair Curlers Addressing an Uncontested Market Space
If you’re familiar with the hair/beauty industry, then you might be keeping up with all of the gadgets and gizmos that help people achieve the hairstyles of their dreams — like the pricy but popular Dyson Airwrap.
Well, people can achieve curly hair for $10 with minimal work and no damage involved, thanks to heatless curlers.
With one long roller, you can achieve overnight curls by wrapping your hair around it and securing the ends. Here’s one example from Amazon.
Who is the target market here? Well, it’s people looking to spend a modest amount of money to curl their hair, with very little work involved, and not cause damage in the process.
Can you see how this is more of an uncontested market space? It doesn’t target everyone, like a multivitamin might. Rather, it speaks to more of an unknown market space. As a result, these things sell like hotcakes!
This product serves a blue ocean market, and it does it very well.
Wait, Won’t Every Market Space Be a Red Ocean?
That’s a great question, and the answer is… this could be the case but doesn’t have to be.
In the example of the heatless hair curler, a red ocean would’ve been haircare. That’s an existing market space that’s incredibly competitive and saturated.
However, this product doesn’t speak to haircare customers. It’s not going after Dyson buyers. It’s going after more of a new market space — one for budget-conscious folks with limited time. These curlers intentionally moved from a red ocean to a blue ocean, essentially making their competition irrelevant.
So, could you tap into a red ocean? Sure, but you need to find the blue ocean within those bloody waters.
Let’s talk about blue and red ocean strategies next.
Red Ocean Strategy vs Blue Ocean Strategy
Let’s return to our previous example with the supplements.
In a red ocean strategy, a brand might sell a supplement that helps you sleep. Guess what? A lot of supplements help you sleep, and millions of people struggle to get enough rest at night.
This is a red ocean strategy, and you’re going to have a hard time selling that supplement. Too many brands are fighting over existing demand. A blue ocean shift will be necessary just to survive.
So, how can we move from an existing market space that’s highly competitive (red ocean strategy) to an unknown market space where you’ll be able to stand out more easily (blue ocean strategy)?
Moving to a Blue Ocean Strategy
A blue ocean strategy requires you to be a lot more intentional.
You need to niche down and get more specific. You know that you’re targeting people who can’t sleep. But what else? What if, more specifically, this supplement was made for:
- People who can’t sleep due to high anxiety and racing thoughts at night?
- Business professionals who travel across time zones a lot and therefore have a hard time sleeping?
- People who spend a lot of time on their feet and can’t sleep due to muscle aches and pains?
This is a blue ocean strategy. In blue ocean strategies, you target a specific group of people with a specific problem. “People who can’t sleep” is so broad. It’s a red ocean strategy that will have you fighting for existing demand — along with every other sleep supplement in the market space.
“People who can’t sleep because they travel across time zones a lot and therefore have a hard time sleeping” is much more particular. Now that’s what I call a blue ocean strategy!
With a blue ocean strategy, you’re going to find a lot of sleepy people swimming around looking for a solution to their problems.
That’s the beauty of a blue ocean vs red.
A Common Rebuttal to Blue Ocean Strategies
When we talk about niching down and moving to blue oceans, a common argument is, “But wait, I don’t want to limit myself!” I understand this concern. And indeed, a blue ocean strategy does mean that you’re ultimately targeting fewer people.
However, when you try to target everyone (which is what you do when you’re struggling to swim through a red ocean), you end up reaching no one. Imagine that you promote a supplement to 100 people but only make one sale.
Compare that to promoting it to 50 people and making 10 sales. Which would you rather have?
This is the difference that a blue ocean strategy can make.
Going after a largely untapped market vs an existing industry with cutthroat competition will put your brand at a competitive advantage. A blue ocean strategy will always beat a red ocean strategy!
Red Ocean Strategies Will Hamper You, But Blue Oceans Await
If, after reading this, you’ve realized that you’ve been employing a red ocean strategy all along, don’t let this discourage you. You now know the limitations of a red ocean strategy and red oceans, in general.
The good news is this: You can tweak your existing business strategy to shift from catering to existing demand to dominating new market spaces.
You can leave red ocean companies in the dust, make your competition irrelevant, and take over an entirely new market. In fact, you can create your very own blue ocean.
If you want to experience profitable growth, head back to the drawing board and explore your very own blue ocean strategy. The waters are nice and calm, and endless opportunities are available to you in the crystal-clear blue oceans.
If you’ve enjoyed reading about red oceans and blue oceans, I talk more about them — among other things — in this YouTube video.