![]() ![]() Created WITHIN a Red Ocean when a company alters the boundaries of an existing company, example : Cirque du Soleil.Companies can give rise to complete new industries, example : Ebay with the online auction industry.In Blue Oceans, growth is profitable and rapid.In Blue Oceans, demand is created not fought over.Blue oceans denote all industries NOT in existence today.Increasing competition turns water bloody.Prospects for profits and growth reduced.Companies try to outperform rivals in order to grab greater share of existing demand.Red Ocean’s competitive rules are well understood.Red Oceans’ industries boundaries are defined and accepted.Red Oceans represent all the industries in existence today – the known market space.RESULT : CdS increased revenues by a factor of 22 over the last 10 years.CdS created uncontested market space that made the competition irrelevant.CDS did not steal from Ringling or Barnum.CdS did not make money by competing within the confines of an existing industry.Revealing Tagline : “We Reinvent the Circus”.Ringling and Barnum’s name a barrier to entry (more than 200 years combined).Other forms of entertainment was available (sports, TV, videos).When CDS was founded the circus industry was in decline (and is still declining).And Barnum & Bailey – the world’s leading circus – more than 100 years to attain Cirque du Soleil has achieved in 20 years time what Ringling Bros.Stages productions seen by 40 million people in 90 cities around the world.The real opportunity is to create BLUE OCEANS of uncontested market space Competing in overcrowded industries is no way to sustain high performance. ![]() ![]() ![]() This article is adapted from their forthcoming book, BLUE OCEAN STRATEGY : HOW TO CREATE UNCONTESTED MARKET SPACE AND MAKE THE COMPETITION IRRELEVANT (Harvard Business School Press, 2005).Renée Mauborgne is the Insead Distinguished Fellow and professor of strategy and management at Insead.Henderson Chair Professor of Strategy and International Management at Insead in Fontaine-Bleau, France. Chan Kim is the Boston Consulting Group Bruce D. Chan Kim & Renée Mauborgne From Harvard Business Review October 2004 ![]()
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