What the Hell is... Blue Ocean Strategy
Blue Ocean Strategy encourages a company to explore untapped markets where immediate and rapid profit growth is possible because of a lack of competition. So instead of battling for profits in the established marketplace, companies should look to generate new markets where they are the only player.
In contrast to a blue ocean (an undiscovered market), the red ocean is the current marketplace, where corporations are competing for market share. Intense competition leads some companies to go under, and the "cutthroat nature" of business turns the ocean bloody or red. It's the concept of diminishing returns, as companies have to devote more resources to besting the competition in order to build market share slightly.
Without the cost of competition, corporations are free to focus on developing their product. Moreover, innovative companies will have the opportunity to define the rules of the marketplace in their favor.
Starwood Hotel's targeting of non-customers is a recent example of Blue Ocean Strategy as they are trying to step outside the traditional market boundaries of the hospitality industry.
Origin:
Michigan State University Professor Charles W.L. Hill introduced the idea in 1988 that differentiation and cost management was the key to gaining a competitive advantage. The concept was encapsulated in the 2005 bestseller, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, written by W. Chan Kim and Renée Mauborgne.
The "blue ocean" strategy is a fascinating concept, and can be read about in concise form in the 10/2004 edition of Harvard Business Review. It's a great point to make to clients (and prospective clients) that it's possible that they already have a winning "blue ocean" product, but they have to talk about it, and themselves differently to make a difference - though It's a rare thing to find a brand manager that's willing to take a risk and "think different".