What is a BLUE OCEAN STRATEGY?

The relevant book where the idea came from - http://bit.ly/c55AK1

First what is red (opposite of blue here) ocean? It is the tradional market place where firms compete with each other.

Blue ocean is a new marketspace, yet to be explored. Since it is new, competitions are irrelevant there.

What is a BLUE OCEAN STRATEGY? The authors explain it by comparing it to a red ocean strategy (traditional strategic thinking):

1. DO NOT compete in existing market space. INSTEAD you should create uncontested market space.

2. DO NOT beat the competition. INSTEAD you should make the competition irrelevant.

3. DO NOT exploit existing demand. INSTEAD you should create and capture new demand.

4. DO NOT make the value/cost trade-off. INSTEAD you should break the value/cost trade-off.

5. DO NOT align the whole system of a company's activities with its strategic choice of differentiation or low cost. INSTEAD you should align the whole system of a company's activities in pursuit of both differentiation and low cost.

Wikipedia link - http://en.wikipedia.org/wiki/Blue_Ocean_Strategy