What is Blue Ocean Strategy?

The core tool of Blue Ocean Strategy is the Strategy Canvas, which maps the competitive factors in an industry and shows how different players invest across them. A blue ocean move involves eliminating factors the industry takes for granted, reducing factors below the industry standard, raising factors above the industry standard, and creating factors the industry has never offered.

Classic blue ocean examples include Cirque du Soleil (eliminated animal acts and star performers, added artistic theater elements to circus), Southwest Airlines (eliminated assigned seating and meals, added frequent departures and fun culture to air travel), and Nintendo Wii (eliminated graphics power, added motion controls to gaming).

In case interviews, Blue Ocean Strategy is relevant when a company faces intense competition and price pressure. Instead of recommending that they compete harder in the existing market, suggest redefining the competitive landscape entirely. The key insight is that most industries compete on the same dimensions—the opportunity lies in changing which dimensions matter.