Shift from red oceans to blue oceans by reconstructing market boundaries.
Cirque du Soleil created a blue ocean by eliminating animals and star performers while adding artistic themes and multiple productions.
Book summary
Foundational Text
Blue Ocean Strategy
by W. Chan Kim & Renée Mauborgne
How to create new market space and make the competition irrelevant
Create uncontested market space and make competition irrelevant
4.6(15k)Published 2004
Topics
Business StrategyInnovationMarket CreationValue Innovation
Reading companion
How to read Blue Ocean Strategy with Readever
Read this book as a strategic toolkit rather than just theory. Use Readever to highlight the systematic frameworks like the ERRC Grid and Four Actions Framework. After each chapter, use the AI to apply these tools to your current business challenges and track how you can reconstruct market boundaries in your industry. Focus on identifying non-customers and creating new value propositions that make competition irrelevant.
Things to know before reading
- The book provides systematic frameworks rather than abstract concepts—come prepared to apply the tools
- Pay attention to the distinction between red oceans (competitive markets) and blue oceans (new market spaces)
- Note how value innovation breaks the traditional trade-off between differentiation and low cost
- Be ready to challenge industry assumptions and conventional wisdom about customer value
Brief summary
Blue Ocean Strategy in a nutshell
Blue Ocean Strategy presents a revolutionary approach to business strategy that challenges companies to stop competing in overcrowded "red oceans" and instead create new, uncontested market spaces called "blue oceans." Based on a decade of research across 150 strategic moves spanning more than 30 industries, the book provides systematic frameworks for achieving value innovation—simultaneously pursuing differentiation and low cost.
Key ideas overview
Blue Ocean Strategy summary of 3 key ideas
Blue Ocean Strategy provides systematic frameworks to escape bloody competition and create new market space.
Achieve value innovation through the ERRC Grid framework.
Southwest Airlines eliminated meals, assigned seating, and hub connections while raising point-to-point convenience and friendly service.
Build execution into strategy with the Four Actions Framework.
[yellow tail] wine simplified wine selection and created social accessibility while eliminating aging qualities and vineyard prestige.
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Stop competing and start creating new markets.
This summary gives you the complete Blue Ocean Strategy toolkit to systematically identify and capture new market spaces. You'll learn how to break free from industry conventions, reconstruct market boundaries, and create demand that makes your competition irrelevant. The frameworks work for startups and established companies alike.
Deep dive
Key ideas in Blue Ocean Strategy
Key idea 1
Shift from red oceans to blue oceans by reconstructing market boundaries.
Cirque du Soleil created a blue ocean by eliminating animals and star performers while adding artistic themes and multiple productions.
The core distinction between red oceans (existing markets with intense competition) and blue oceans (untapped market spaces with no competition) forms the foundation of the strategy. Companies can systematically reconstruct market boundaries by looking across alternative industries, strategic groups, buyer groups, complementary offerings, functional-emotional appeal, and time. This approach helped Cirque du Soleil reinvent the circus industry by combining theater with circus arts, creating a new entertainment category.
Remember
- Don't benchmark against competitors—look across alternative industries for inspiration
- Challenge industry assumptions about what customers truly value
- Focus on creating new demand rather than fighting over existing customers
Key idea 2
Achieve value innovation through the ERRC Grid framework.
Southwest Airlines eliminated meals, assigned seating, and hub connections while raising point-to-point convenience and friendly service.
Value innovation—the simultaneous pursuit of differentiation and low cost—is achieved through the Eliminate-Reduce-Raise-Create (ERRC) Grid. This framework forces companies to systematically question industry conventions: eliminate factors the industry takes for granted, reduce factors below industry standards, raise factors above industry standards, and create factors the industry has never offered. Southwest Airlines used this approach to create a new airline model that competed with car travel rather than other airlines.
Remember
- Use the ERRC Grid to systematically challenge industry assumptions
- Focus on factors that deliver exceptional value to customers
- Break the value-cost tradeoff by eliminating and reducing unnecessary costs
Key idea 3
Build execution into strategy with the Four Actions Framework.
[yellow tail] wine simplified wine selection and created social accessibility while eliminating aging qualities and vineyard prestige.
The Four Actions Framework provides a systematic approach to building a new value curve: eliminate factors that are no longer valued, reduce overdesigned features, raise elements that deliver breakthrough value, and create new sources of value. [yellow tail] wine used this framework to make wine accessible to non-wine drinkers by simplifying selection, using fun branding, and creating social occasions for wine consumption, capturing the U.S. market in just two years.
Remember
- Focus on the non-customers who are currently underserved by the industry
- Simplify complex offerings to make them accessible to new customer segments
- Align your entire business system around the new value proposition
Context
What is Blue Ocean Strategy about?
Blue Ocean Strategy is a groundbreaking business strategy book that challenges the conventional wisdom of competing in existing market spaces. Based on extensive research of companies across diverse industries, the book demonstrates how organizations can systematically create and capture new market space—"blue oceans"—rather than fighting over shrinking profit margins in crowded "red oceans."
The book introduces practical frameworks like the Strategy Canvas, Four Actions Framework, and ERRC Grid that help companies reconstruct market boundaries, focus on value innovation, and build execution into strategy. Through compelling case studies like Cirque du Soleil, Southwest Airlines, and [yellow tail] wine, the authors show how companies can make competition irrelevant by creating new demand and breaking the value-cost tradeoff.
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Review
Blue Ocean Strategy review
Blue Ocean Strategy represents one of the most influential business strategy frameworks of the 21st century. The book's strength lies in its systematic approach to innovation—providing concrete tools rather than abstract concepts. The ERRC Grid and Four Actions Framework give companies a practical methodology for challenging industry conventions and discovering new market opportunities.
Critical Reception: The book has sold over 4 million copies worldwide and has been translated into 47 languages. It was named a Wall Street Journal and BusinessWeek bestseller and won the Thinkers50 2011 Strategy Award for Best Business Book. The framework has been adopted by companies, governments, and non-profits globally, with the Harvard Business Review article preceding the book becoming one of the most reprinted articles in HBR history.
- Named a Wall Street Journal and BusinessWeek bestseller
- Sold over 4 million copies worldwide in 47 languages
- Won Thinkers50 2011 Strategy Award for Best Business Book
- Provides systematic frameworks rather than abstract concepts
- Based on extensive research across 150 strategic moves in 30 industries
- Practical methodology applicable to companies of all sizes
- Helps organizations break free from conventional competitive thinking
Who should read Blue Ocean Strategy?
Entrepreneurs and startups looking to create new market categories
Established companies seeking growth beyond traditional competition
Business leaders and strategists responsible for innovation
Product managers and marketers developing new value propositions
Anyone interested in systematic approaches to business innovation
About the author
W. Chan Kim and Renée Mauborgne are Professors of Strategy at INSEAD and Co-Directors of the INSEAD Blue Ocean Strategy Institute. They are ranked among the world's most influential management thinkers and have published numerous articles in top academic journals including Harvard Business Review, where their article "Blue Ocean Strategy" is one of the most reprinted in the journal's history.
Kim and Mauborgne have received numerous academic awards including the Nobels Colloquia Prize for Leadership on Business and Economic Thinking, the Eldridge Haynes Prize for the best original article in The Academy of Management Executive, and the McKinsey Award for the best article published in Harvard Business Review. Their research has been featured in major publications worldwide and they serve as advisors to corporations and governments globally.
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Final summary
Blue Ocean Strategy provides a systematic approach to escaping bloody competition and creating new market space. By focusing on value innovation rather than competitive benchmarking, companies can break free from industry conventions and create demand that makes competition irrelevant. The frameworks presented—from the Strategy Canvas to the ERRC Grid—offer practical tools for any organization seeking sustainable growth through market creation rather than market share battles.
Inside the book
This extended outline captures Blue Ocean Strategy's key insights and practical applications. Use it to revisit the book's core concepts and apply them to your personal or professional growth.
The book's enduring value lies in its systematic approach to innovation—providing concrete frameworks rather than abstract concepts. The ERRC Grid, Four Actions Framework, and Strategy Canvas give organizations of all sizes practical tools for escaping competitive markets and creating new demand.
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