Red Ocean and Blue Ocean, a business strategy

For those who have just started businesses, one of the techniques that helps in planning business plans which receive a lot of popularity for a long time is Ocean Strategy. The oceans which are often talked about are the Red Ocean and the Blue Ocean.

These two oceans are like fundamentals in business or marketing, and what are the differences between these two oceans? Let’s follow ACU PAY and find out.

What is the Red Ocean Strategy?

Red Ocean is the most competitive business area with competitors offering similar products or business characteristics. The Red Ocean strategy will be a “price-oriented” marketing strategy where each player has little brand difference and customers have little brand loyalty. Customers are ready to go to whatever brands that offer the lowest price.

The businesses that use the Red Ocean Strategy are usually related to consumer products such as FMCG (Fast Moving Consumer Goods) which is slow to grow and is not profitable because it is common in the market and must always compete with similar products.

The strategy of the Red Ocean is like a fierce battlefield where each side loses a lot of blood until the sea turns red.

What are the businesses that use the Red Ocean Strategy?

Clothing stores which offered knockout sales during the holidays to make the prices cheaper than their competitors.
Coffee shops that issue the promotion of Buy 1 Get 1 Free.

What is the Blue Ocean Strategy?

Blue Ocean is a business area that focuses on creating new demand for consumers through creating new products or adding value to existing products. It is a low-competitive market with few competitors, but this strategy requires careful exploration of the market and customer behavior to meet the needs of customers.

Businesses using the Blue Ocean strategy will not have to compete in a market with many competitors but will focus on changing existing demand from the Red Ocean market into new demand in a new market that has never had before, creating a stable customer base to make stable growth and high profits.

What are the businesses that use the Blue Ocean Strategy?

Apple Inc when Steve Jobs was the CEO (iPod, iPhone, iPad, Macbook Air)
Netflix has changed consumer behavior from renting a movie disc at Blockbuster to watching movies online through its app at home and paying monthly subscription fees.

The difference between the Red Ocean and the Blue Ocean.

Market: The Red Ocean will be a competition in the market where there are people who have done it before while the Blue Ocean will compete in the market where no one has ever done it before.
Competition: The Red Ocean will have a large number of competitors because there are similar products and services while the Blue Ocean usually has few or no competitors.
Demand: The Red Ocean will focus on current demand, such as consumer products while the Blue Ocean will focus on creating new demand instead.
Aim: A chance to win in the Red Ocean is by achieving stable growth, and high profit while the Blue Ocean will focus on meeting demand for products, services, or customers the most.

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