Many times, when it comes to entrepreneurship, we are unaware of details that could help us a lot in terms of the development of our project or startup. This is the case of the blue ocean strategy and the red ocean, two strategies that will help you understand the market you are facing, although the choice you make will depend on your entrepreneurial project and what you want to achieve. 

Before thinking about our market, we need to know it in depth. 

What is the red ocean and the blue ocean?

The red ocean represents the market that already exists and has a lot of competition. For example, the fashion market, cell phones, etc. On the other hand, the blue ocean represents that market that is unknown or does not yet exist, i.e. the blue ocean consists of creating that market: a world full of possibilities.

This concept comes from the book "Blue Ocean Strategy" by W. Chan Kim and Renée Mauborgne, of which several editions have been published and updated, the first one was published in the early 2000s. This book is still today a great reference in the world of entrepreneurship.

The advantages and disadvantages of each ocean

Locating your business in an ocean is not an easy task because you have to think about which one best fits the business model you want to develop. Therefore, we explain the advantages and disadvantages of each ocean. 

Advantages

In the case of the blue ocean we can find the following advantages: 

• No competition at the beginning 

• You can shape your strategy: you don't have to follow pre-existing rules or adapt your business model to the rest of the companies already in the market, as opposed to the red ocean.

• You are the first, you choose the rules of the game. 

• If you make a mistake, it is easier to correct errors

In contrast, the advantages of the red ocean are:

• It is a market for which there is already a lot of information

• There is an established demand in the sectors that exist

• Competition information will possibly be available on the Internet.

• You do not start from scratch

Inconveniences

Disadvantages of the blue ocean: 

• It is like starting with a blank sheet of paper: there is nothing, and depending on what you do and how you do it, it can result in a great success or, on the contrary, a great failure. 

• You have to know very well how you are going to develop and implement your business, because even though you can correct the mistakes if you do not know how to create from scratch a business model for a market that does not exist yet, the chances of failure are higher. 

• As this is an innovation option, there will be no information available on which to rely.

Disadvantages of the red ocean:

• High competition

• The chances of success may not be very good unless you have a very good strategy.

• A lawsuit already exists and is currently being settled by your competitor. 

Main differences between red ocean and blue ocean

What ocean is your startup in?

The key in choosing your ocean is based on your product or service and what exactly you want: do you have a product that already exists but you want to bring it to market? Or have you created something that no one has ever seen before? Something that people didn't know they needed until they discovered your product. 

You have to identify where your product would be. In a competitive sector (red ocean) or in an under-exploited or non-existent one (blue ocean). 

Many times when it comes to developing our idea, we think we have it all figured out, but this is not really the case. 

For this, Design Thinking could be a great ally to solve this crossroads. 

The tools of Design Thinking in entrepreneurship 

Whether it is to involve your target audience or ideal client in the whole process and better understand what they need, or to know how your idea can solve a problem, it is best to consult all the tools that Design Thinking offers. And apply the one that best suits your needs or the problem you want to address. You can learn more about Design Thinking and its steps to carry it out in our blog.

If you keep this tool in mind from the beginning of the ideation process, as well as when problems arise (like the one we talked about in this article), you will probably end up seeing everything more clearly.

Which of the two oceans do I choose?

Finally, the key and really important thing to remember is that creation and innovation will always be linked to risk. As a startup you have to be aware of the industry you want to be in, as competition is going to be a challenge when entering any market.

The choice of positioning yourself in the red ocean or the blue ocean will depend on your needs and the objectives of your entrepreneurial project. What is clear is that in either case you will have to know the market well and, above all, be very clear about the solution you are going to offer and how you are going to do it. 

We hope this information has helped you! Follow us on social networks to find out everything. 

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