7 Key Takeaways from Blue Ocean Strategy
Almost a year ago, I read a book called Blue Ocean Strategy. While it was packed with valuable insights, here are seven key takeaways that I think will resonate with you and might be useful for your work or business.
One Topic: 7 Key Takeaways from Blue Ocean Strategy
Why Blue Ocean Strategy Principles Matters
Most businesses compete in saturated markets, trying to beat competitors with incremental improvements. This is the “red ocean” filled with competition and shrinking profits. Blue Ocean Strategy offers a fresh approach—creating untapped markets where competition becomes irrelevant.
The Key Takeaways from Blue Ocean Strategy
- Value Innovation at Its Core
Blue Ocean Strategy emphasizes creating value for customers while managing costs.
Example: Cirque du Soleil reinvented the circus by removing expensive elements like animal shows and adding artistry and storytelling, attracting an entirely new audience. - Making Competition Irrelevant
Don’t fight for market share—create new spaces where competitors don’t exist.
Scenario: A gym offering quick, tailored 30-minute workouts for busy professionals would attract customers that traditional gyms overlook. - The ERRC Grid
Use the Eliminate-Reduce-Raise-Create grid to challenge assumptions and redefine value.
Example: Southwest Airlines redefined air travel:- Eliminated: Free meals and first-class seating
- Reduced: Ticket prices
- Raised: Service frequency
- Created: Fun, low-cost travel
- Differentiation and Low Cost Together
Blue Ocean Strategy combines uniqueness with affordability.
Scenario: A coffee shop with AI-driven personalization can serve faster, customized drinks without increasing costs, setting it apart from competitors. - Focus on Non-Customers
Instead of chasing existing customers, identify those underserved by the market.
Example: Nintendo’s Wii appealed to non-gamers—families and older adults—by designing simple, intuitive games. - Data-Driven Decisions
Strategic moves in Blue Ocean Strategy rely on data, not assumptions.
Scenario: A hotel chain might research non-traditional competitors like Airbnb and identify opportunities to cater to long-term renters or digital nomads. - Aligning Value, Profit, and People
A successful strategy benefits customers, the company, and employees alike.
Example: IKEA’s self-assembly furniture reduces costs for customers, drives profitability, and aligns employees around a clear mission.
What This Means for You
Whether you’re leading a team or building a business, the principles of Blue Ocean Strategy can help you escape crowded markets. Ask yourself: What market gaps can you fill? How can you redefine value for your customers?
Read last week’s JustDraft newsletter about the compound effect of small efforts.
Two Quotes
The goal isn’t to be the best in the market—it’s to create your own market.
Innovation happens when you stop competing and start creating.
One Passage From A Book
Startups exist to learn how to build a sustainable business. This learning can be validated scientifically by running experiments that test our vision. Through this process of experimentation, startups learn what customers really want, not what they say they want or what we think they should want. By focusing on rapid iteration and constant feedback, entrepreneurs can avoid waste, adapt to change, and build products that truly solve problems. The goal is not to perfect a product before launch but to create a ‘minimum viable product’ that sparks real-world insights to guide future development.
📚 From The Lean Startup by Eric Ries
