Understanding Blue Ocean Strategy and the Strategy Canvas
- Mr Anonymous
- 2 hours ago
- 5 min read
Understanding Blue Ocean Strategy
In a crowded market, businesses often compete for the same customers with similar products, services, and pricing. As competition increases, it becomes harder to stand out and create sustainable growth.
Blue Ocean Strategy offers a different approach. Developed by W. Chan Kim and Renée Mauborgne, it focuses on creating new market spaces and generating new demand instead of competing directly within an existing market.
What Is Blue Ocean Strategy?
Blue Ocean Strategy is a business strategy that helps organisations find opportunities to create new customer value and new market demand.
Instead of asking, “How can we beat our competitors?”, it encourages businesses to ask:
“How can we create value in a way that makes competition less relevant?”
This is the key difference between competing within an existing market and creating a new one.
Red Oceans and Blue Oceans
A Red Ocean refers to an existing market where businesses compete for the same customers and demand. Companies often compete using familiar factors such as price, product features, service quality, and brand.
A Blue Ocean is a new or untapped market space where a business creates new demand and offers customers a different form of value.
In simple terms:
Red Ocean = compete within the existing rules.
Blue Ocean = rethink the rules and create new opportunities.
This does not always mean inventing a completely new industry. A blue ocean can come from changing an existing offering, combining ideas from different industries, or solving customer needs that are currently overlooked.
What Is Value Innovation?
One of the most important ideas behind Blue Ocean Strategy is value innovation.
Traditional business strategy often assumes that companies must choose between differentiation and low cost. Blue Ocean Strategy challenges this assumption by looking for opportunities to achieve both.
This means removing things customers do not value, reducing unnecessary costs, while creating new value that customers genuinely appreciate.
The goal is not simply to compete better. It is to compete differently.
The Power of the Strategy Canvas
Understanding Blue Ocean Strategy is the first step.
The next question is: How can you actually see where opportunities exist in your market?
This is where the Strategy Canvas becomes useful.
The Strategy Canvas is a key tool within Blue Ocean Strategy. It provides a visual overview of how businesses compete in an industry and helps identify where a new value proposition could be created.
What Does a Strategy Canvas Show?
A Strategy Canvas helps businesses look at:
What factors an industry competes on
Where competitors are investing
What level of value customers receive
How different businesses position themselves
Where competitors are similar
Where opportunities for innovation may exist
These factors are plotted to create value curves, allowing businesses to see the competitive landscape more clearly.
For example, if several competitors have almost identical value curves, it may suggest that everyone is competing in the same way.
That creates an important question:
What could we change to offer customers something different?
Look Beyond Your Competitors
The Strategy Canvas also encourages businesses to look beyond their direct competitors.
Instead of only asking what another company is doing, consider the wider customer experience:
What alternatives are customers using?
Why do some people choose not to use this type of product or service?
What frustrations or unmet needs are being overlooked?
These questions can reveal opportunities that traditional competitor analysis may miss.
The Strategy Canvas therefore helps businesses understand where the market is today while exploring where it could go next.
Components of the Blue Ocean Strategy Canvas
Now that we understand what the Strategy Canvas does, let's look at the key elements that make it work.
The Blue Ocean Strategy Canvas helps businesses map the current competitive landscape and identify areas where they can create a different value proposition.
Competitive Factors
Competitive factors are the areas that businesses within an industry compete on.
Depending on the market, these could include:
Price
Product features
Service quality
Convenience
Distribution
Marketing
Brand positioning
Customer experience
The important thing is not to list every possible feature. Focus on the factors that actually influence how customers compare different offerings.
These factors can be identified through competitor research, industry reports, customer feedback, interviews, and insights from sales teams.
Value Curves
A value curve shows how a business performs across the different competitive factors.
When you plot your business alongside competitors, patterns become easier to see. You may discover that everyone is investing heavily in the same areas or that certain customer needs are being overlooked.
This can help identify where your business could take a different strategic direction.
Investment Level
The vertical axis of the Strategy Canvas represents the level of value or investment provided across each competitive factor, usually ranging from low to high.
This helps businesses question whether they are investing in the areas customers actually care about or simply following what the rest of the industry is doing.
The Four Actions Framework
The Four Actions Framework works alongside the Strategy Canvas to help businesses rethink their value proposition.
It asks four simple questions:
Eliminate: What factors that the industry takes for granted could we remove?
Reduce: What could we reduce below the industry standard?
Raise: What should we improve beyond the industry standard?
Create: What new factors could we introduce that the industry does not currently offer?
Together, these four actions help businesses identify opportunities for value innovation, while avoiding the assumption that more features or higher investment always create more value.
The basic idea is simple:
Blue Ocean Strategy helps you rethink how you compete.
The Strategy Canvas helps you see where you can compete differently.
What's Next?
Next blog, we'll move from understanding the framework to building and applying your own Strategy Canvas, including the common mistakes to avoid and real-world examples of businesses that have successfully created blue oceans.
Last Words
I will be adding more articles on Design Thinking, Strategy and Innovation throughout the year. Articles of these 5 Step Action Plan and Modern Soft Skills will be added periodically to give my readers a broader insights to how to crush complex problems, overcome future challenges and spot AI opportunities.
Check out more articles via my blog: https://www.emerge-creatives.com/blog-1
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About the Author
Daniel Ling is a regional ex-Design Leader turned educator, and business owner of Emerge Creatives, an registered SSG training provider (RTP) to deliver modern soft skills to professionals through Design Thinking, Business Strategy, and AI Innovation.
With over 15 years of experience in the financial and e-commerce tech industries- including key leadership roles at Lazada, NTUC Income, OCBC, and DBS- Daniel has led cross-regional design teams, built design functions from the ground up, and spearheaded large-scale transformation initiatives. But beyond industry success,
Daniel has reinvented himself as a “designer in a business suit”- equally fluent in creative strategy and commercial impact.
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