What is Blue Ocean Strategy?
A proven methodology to render your competition irrelevant by creating new, uncontested market space.
The Metaphor
Red Oceans
Represent all the industries in existence today—the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.
- • Compete in existing market space
- • Beat the competition
- • Exploit existing demand
- • Make the value-cost trade-off
Blue Oceans
Denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over.
- • Create uncontested market space
- • Make the competition irrelevant
- • Create and capture new demand
- • Break the value-cost trade-off
The Four Actions Framework
To break the trade-off between differentiation and low cost and to create a new value curve, the framework poses four key questions.
Eliminate
Which factors that the industry takes for granted should be eliminated?
Reduce
Which factors should be reduced well below the industry's standard?
Raise
Which factors should be raised well above the industry's standard?
Create
Which factors should be created that the industry has never offered?
How We Apply It: The 12-Step Process
Over nearly 20 years of practice we have refined the original linear application of Blue Ocean tools into an evolving, cyclical process. Clients can enter anywhere — we start where you are.
Blue Ocean in Action — Australian Examples
Businesses that demonstrate the principles of Blue Ocean Strategy in action.
Canva
Founded in Perth, Canva created a new market category that didn't previously exist: professional-quality design for non-designers. Rather than competing with Adobe on features and power, they eliminated the professional skill barrier entirely—making sophisticated design accessible to anyone with an idea. Canva didn't beat Adobe; they built a new ocean of users Adobe had never served.
Afterpay
Melbourne-founded Afterpay looked at the consumer finance industry and asked: what if we reframed debt as a shopping feature? By eliminating interest charges, reducing complexity to four equal payments, and positioning at the point of purchase rather than a bank branch, Afterpay made traditional lay-by and credit cards largely irrelevant to an entire generation of Australian consumers.
Remedy Healthcare
Rather than competing with hospitals and clinics for the same patients, Remedy Healthcare created a new space: telehealth and in-home care programs that keep people out of hospital altogether. By reframing the offer from "treatment when you're sick" to "support that prevents the admission", it served a demand traditional providers weren't structured to reach.
Smile.com.au
Instead of joining the crowded private health insurance market, Smile.com.au eliminated the insurance model entirely for dental: a simple membership giving guaranteed fee reductions at accredited dentists. No claims, no waiting periods, no annual limits — value innovation that made the traditional extras-cover comparison largely irrelevant for dental care.
Why Australia?
Australia's concentrated, oligopolistic markets — banking, supermarkets, telecommunications, media, insurance — create the perfect conditions for Blue Ocean thinking. When four players control 80% of a market, the path to growth is not more competition for the same customers. It is category creation. Blue Ocean Strategy gives Australian leaders the frameworks to find and build that path.
Common Questions
What is Blue Ocean Strategy?
Blue Ocean Strategy is a business strategy methodology created by W. Chan Kim and Renée Mauborgne that helps organisations stop competing in crowded, price-driven markets (red oceans) and instead create new, uncontested market space (blue oceans) where competition becomes irrelevant. It uses practical tools such as the Strategy Canvas, the Four Actions Framework and non-customer analysis.
How is Blue Ocean Strategy different from traditional strategy consulting?
Traditional strategy consulting typically benchmarks you against competitors and looks for ways to win a bigger share of an existing market. Blue Ocean Strategy instead looks for demand that no one is serving — reconstructing market boundaries so you create new customers rather than fighting over existing ones. At Blue Ocean Strategy Australia, we also facilitate the process with your leadership team rather than delivering a report, so the strategy is owned by the people who must execute it.
Does Blue Ocean Strategy work for small and medium businesses?
Yes. Blue Ocean Strategy is not just for large incumbents or start-ups — growth businesses, SMEs and even not-for-profits use it to find market spaces where their specific assets and capabilities give them a durable advantage. The tools scale to the size of the organisation applying them.
How long does a Blue Ocean Strategy engagement take?
Engagements range from a half-day executive workshop introducing the tools, to multi-day strategy offsites, to multi-month embedded programmes where the strategy is researched, tested, piloted and refined with your team. Every engagement starts with a free discovery call to scope the right format.
Who provides Blue Ocean Strategy consulting in Australia?
Blue Ocean Strategy Australia is a Melbourne-based consultancy led by Andrew Nelson, Australia's most experienced Blue Ocean Strategy practitioner, with over 17 years of experience applying the methodology across 250+ organisations, 20+ industries and 15+ countries.
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