A Simple Guide to Business Strategy
Red Ocean vs Blue Ocean explained by Lares
Rosie Vanney
Last Update 5 months ago
Red Ocean vs. Blue Ocean:
A Simple Guide to Business Strategy
1. Introduction: Two Ways to Do Business In the world of business, there are two fundamental ways to think about your company and its place in the market. Imagine the entire market of customers as an ocean. You can either jump into the bloody, churning waters where everyone is already fighting, or you can sail off to find your own calm, clear waters.
These two approaches are known as "Red Ocean" and "Blue Ocean" strategies. They are powerful metaphors for understanding competition. This guide uses a real-world example to break down these concepts, making them simple and clear.Let's begin by exploring the much more common of these two environments:
the Red Ocean.
2. Understanding the Red Ocean: Competing in a Crowded Market A Red Ocean represents all the industries in existence today—the known market space. In these crowded waters, companies try to outperform their rivals to grab a greater share of existing customer demand. As competition gets fierce, the water becomes "bloody," which is where the name comes from.The core of this strategy is fighting over the same things.
"In a Red Ocean, you compete on price and features."For a small business, this environment is becoming more than just competitive; it's becoming unsustainable. This is because a major technological shift is making the old ways of doing business obsolete.
Your existing problems that arise from this outdated approach:
• Outdated Tools in a New Era: The "unavoidable" shift to AI-driven search and mobile-first customer interaction has rendered traditional websites "unworkable." Businesses using these old tools are like soldiers showing up to a modern battle with outdated weapons—they are difficult to manage and fail to connect with customers in the new digital landscape.
• A Vicious Cycle of Reaction: This reliance on broken tools traps business owners in a constant state of "firefighting." Because their "digital front door" generates manual queries instead of automating them, owners spend their days reacting to problems instead of building a proactive strategy to get ahead of the competition.This constant struggle for survival defines the Red Ocean. But instead of trying to fight harder with the same tools, the alternative is to leave the competition behind entirely.
3. Discovering the Blue Ocean: Creating a New Market
A Blue Ocean represents an uncontested, new market space. The strategy here is not to beat the competition, but to make the competition irrelevant by creating a leap in value for customers. This creates fresh demand and new opportunities for growth in calm, clear waters.The goal shifts from battling over features to providing a new kind of solution. In the example from the source text:"In our Blue Ocean, you thrive on time and simplicity."The company in the source text, Lares, creates its Blue Ocean by fundamentally changing the game. They do this by following a clear strategy:
1. Find an Unserved Audience: Instead of fighting for tech-savvy customers, Lares targets the "underserved" market of tech-averse small business owners. These are customers who are ignored by complex, "do-it-yourself" tech solutions.
2. Offer a New Kind of Value: Lares doesn't offer a better website; it offers a "Proven System." The value is not in more features, but in simplicity and time-saving through a "done-for-you" service. This new value proposition directly solves the "firefighting" problem by automating tasks and freeing up the owner's time.
3. Change the Platform: The company moves away from the "clunky desktops" of the Red Ocean and embraces a "mobile-first" strategy. This meets customers where they already are—on their phones—making the business more accessible and efficient.
To make these differences even clearer, let's compare the two strategies side-by-side.
4 Table:
