Strategies to compete in a very strong competition can lead to "a sea of blood" for companies that compete or fight them. This strategy is called Bloody or Red Ocean Strategy. W. Chan Kim and Renee Mauborgne claim that the Red Ocean Strategy is no more powerful way to create growth and profitability in the future. They both propose a new strategy called the Blue Ocean Strategy. The difference between Red OceanStrategy and Blue Ocean strategy, among others, in responding to the market, competition, demand, value and strategy.
Red Ocean Strategy assumes that competition is to compete in existing market space, while the Blue Ocean Strategy considers that compete is to create a space that is not their market. A very large market like the "blue ocean". Therefore, very large market, companies can choose the market as he pleased. Red Ocean Strategy uses the concept to grow and benefit by beating competitors in the competition. Blue Ocean Strategy uses the concept of eliminating competition. Because competition is missing, the company only competing with itself. The company is bound to win the competition without any opponents.
Red Ocean Strategy exploit existing demand in an all-out, while the Blue Ocean Strategy to create and capture new demand. Red Ocean Strategy won the advantage by creating value, then the Blue Ocean Strategy achieve excellence without having to create value. Red Ocean Strategy together with the system as a whole from the activities of companies by choosing a strategy of differentiation or overall cost leadership strategy (low cost strategy), while Blue Ocean Strategy together with the system as a whole from its activities in implementing the strategy of differentiation and overall cost leadership strategy together . Blue Ocean Strategy involves two aspects. First, how to find and develop the blue ocean. To find and develop the blue ocean, launched a comprehensive new industry, such as eBay are doing auctions on the internet and do a more general industry by extending the limits created by the red ocean. Second, how to exploit and protect blue ocean.
Competition which is to kill and kill the other (Red Ocean Strategy) should be replaced with no rivalry or competition without having to kill (Blue Ocean Strategy). Thus, it becomes a beautiful business.
Quoted from "Revolusi Organisasi", M. Suyanto