A Blue Ocean is a market space without direct competition, created by establishing entirely new value dimensions. Instead of fighting for market share in existing markets (Red Ocean), a new market is created where the previous rules of competition no longer apply. The core idea: not to be better than the competition, but to make the competition irrelevant.
Cirque du Soleil is the classic example: rather than competing as a better circus (with more expensive animals, more famous performers), Cirque du Soleil eliminated the cost-intensive elements of traditional circus (animal shows, star performers, multiple rings) and added entirely new value dimensions (theater, music, artistic staging). The result was an offering that was neither circus nor theater but a new category with initially no competition. Nintendo created a Blue Ocean in gaming with the Wii: instead of competing on graphics performance, the Wii addressed an entirely new segment through motion controls.
The concept comes from W. Chan Kim and Renee Mauborgne. In practice, the challenge is that Blue Oceans do not last permanently: successful new markets attract competitors and gradually turn into Red Oceans.
