Blue ocean strategy

What is blue ocean strategy?

Blue ocean strategy means growing by opening market space that rivals do not yet serve, so sales come from new demand with little head-to-head competition. W. Chan Kim and Renée Mauborgne of INSEAD set out the idea in a 2004 Harvard Business Review article and in their book Blue Ocean Strategy. They call crowded, price-driven markets red oceans. Their route out is to raise what buyers get and cut cost at the same time.

Why it matters to a revenue leader

Services sales teams can spend much of their time in red oceans, such as public bids and procurement portals. A blue ocean move for a revenue leader might be a bundled compliance program that no competitor offers, sold to a buyer who used to buy each piece separately. The test is whether the offer creates demand that did not exist before, which shows up as deals with no competing bid.

A backflow and fire testing company packages all of a property manager's code-required inspections into one annual program with a single compliance report. In its first year it signs 40 programs, and 30 of them come from customers who had never asked the company for a quote before.