Blue Ocean vs. red Ocean Strategies as They Relate to Long-Term Business Success

The differences between of blue ocean vs red ocean strategies are based on concepts of strategy, organizational change, business flexibility, resilience, competitive advantage and the ability of business to develop long-term success. The differences between the two are also based on the idea that blue ocean strategies are considered superior as compared to red ocean strategies that are considered as limiting, obsolete and unnecessary.

Blue Ocean Strategies

1. Blue ocean strategies refer to business strategies that focus on new markets and new opportunities. It is a more proactive approach to business strategy that exploits new spaces rather than existing ones.
2. Blue ocean strategies are important because they differ from tradition ways of competition and incorporate competitive advantage from focusing on new economic opportunities.
3. Blue ocean strategies also highlight a significant shift in the business environment characterized by a change in market power from business to consumers. This shift is founded by the intensification of global competition that has put consumers as the center of market power.
4. The strategies emerged as a result of performance problems and a need for creativity in the process of executing strategies of competition.
5. Sustaining such strategies can only be made possible through capturing new markets and developing new demand.

Blue ocean strategies therefore, focus on market creation as the primary response to still competition.

Red Ocean Strategies

1. Red Ocean strategies represent traditional ideas of competitive advantage for businesses. They mainly focus on existing spaces in the market rather than creating new ones.
2. Red Ocean Strategies include finding ways to perform better than competitors, such as differentiation and cost cutting. The application of creativity is on existing products and servicing, in gaining market share, reducing costs and improving efficiency.
3. An important analogy that explains red ocean strategies is sharks fighting or the same limited food.
4. Red Ocean strategies are considered limited and traditional because they do not cater to the needs of the changes in the business environment which is characterized by a shift in focus to consumers from business which is caused by high levels of global business competition.

Which Strategy is Better: Red Ocean vs. Blue Ocean

Both blue ocean and red ocean strategies provide important business frameworks that can offer success in different circumstances and market conditions.

Blue ocean strategies are best suited for business with high levels of resources because they mostly involved the creation of new markets, capturing new demands and creating value for customers.

On the other hand, red Ocean strategies are more suitable for business with limited resources and in this case such efforts as focusing in differentiation, reduced cost and increased efficiency are more appropriate for competition.

Importance of Blue Ocean Strategies in a Market Situation Where There is High Global Business Competition

The market for businesses around the world has significantly changed. This changed is characterized higher levels of global competition. The implication of this competition is that consumers have gained significant levels of market power. This is market power that was previously held by businesses.

Red Ocean strategies cannot meet the needs of these changes in the long run. These strategies propose increased efficiency, reduced costs and differentiation as solutions to the problem of high levels of competition but are not sustainable.

Long-term success can only be achieved through blue ocean strategies which make them far more superior to red-ocean strategies. They propose market creation approaches that develop new demand and orient businesses towards capturing new markets rather than scavenging on existing market spaces.

The choice of which strategy between the blue ocean vs. Red ocean currently determines the success or failure of businesses. Blue oceans are considered the way of the future. This is because these strategies mostly focus on sustainable approaches to business success.

It is however, important to note that the red-ocean strategies have existed for a long time and form a robust mental models for how most managers pursue success for their respective organizations.

Because red ocean strategies fail to provide long term success especially in the currently business environment, the reliance of mental models founded on these strategies can lead to significant shortfalls for business.