Blue Ocean Strategy

Abstract

Blue ocean strategy provides a theoretical framework and a practical roadmap for companies to break away from the cutthroat competition in existing industries and create new market space of profitable growth. Whereas competitive strategy stresses the importance of choosing a distinctive position of either differentiation or cost leadership under structural constraint, blue ocean strategy aims at breaking the trade‐off between value and cost through cognitive reconstruction of market elements across industry boundaries. On the basis of a reconstructionist view of strategy, blue ocean strategy argues that industry structure can be changed endogenously by the strategic actions of micro‐level actors. This, in turn, requires the alignment of the value, profit, and people propositions of a strategy in support of pursuing both differentiation and low cost.