Blue Ocean Strategy
Stop fighting in saturated markets. Create your own uncontested market space.
What is Blue Ocean Strategy?
Blue Ocean Strategy, developed by W. Chan Kim and Renee Mauborgne (INSEAD, 2005), offers a radical alternative to head-on competition. Instead of fighting for market share in saturated industries ('red oceans'), it invites companies to create new market spaces where competition becomes irrelevant — 'blue oceans'.
The central tool of this strategy is the ERRC grid (Eliminate-Reduce-Raise-Create). It forces leaders to challenge the factors their industry takes for granted: which elements should be eliminated entirely? Which should be reduced below the industry standard? Which should be raised above? And most importantly, which elements should be created that the industry has never offered?
Cirque du Soleil, Nintendo Wii, Southwest Airlines: case studies abound. Blue Ocean Strategy is not about technological innovation, but about value innovation — simultaneously delivering more value to the customer at lower cost to the company. It is this break in the value curve that renders competition obsolete.
How to apply Blue Ocean Strategy?
Map the current value curve
Identify the key competitive factors in your industry and evaluate how your offering and those of competitors position on each. This value curve reveals where everyone competes — and where everyone looks the same.
Apply the ERRC grid
For each factor, ask the 4 questions: Eliminate (which factors accepted by the industry should be removed?), Reduce (which factors should be toned down?), Raise (which factors should be amplified?), Create (which novel factors should be introduced?).
Explore the six paths to reconstruction
Look beyond your industry: alternative industries, strategic groups, buyer-user chain, complementary offerings, functional-emotional dimension, and trends over time. Each path opens a space for market creation.
Build the new value curve
Draw your target value curve. It must clearly diverge from competitor curves: a distinct strategic profile means a blue ocean. If your curve looks like the others, you are still in the red ocean.
Test and iterate with the market
Validate your value proposition with non-customers: why don't they buy today? Blue Ocean Strategy targets the three tiers of non-customers to unlock massive latent demand.
The ERRC Grid (Eliminate-Reduce-Raise-Create)
Eliminate
- Factors the industry takes for granted
- Costly features with no real value
- Superfluous complexity
Reduce
- Factors overweighted by competition
- Underused functionalities
- Excessive industry standards
Raise
- Factors undervalued by the industry
- Unresolved pain points
- Emerging customer requirements
Create
- Novel sources of value
- New customer experiences
- Factors the industry has never offered
Klarvon automates your Blue Ocean analysis
Klarvon identifies your industry's competitive factors and automatically generates your value curve compared to competitors. Our AI analyzes offerings, customer reviews, and market trends to propose a sourced ERRC grid: which elements to eliminate, reduce, raise, or create to diverge from the market. Every recommendation is backed by verifiable data, not intuition.
Complementary frameworks
Explore other strategic analysis frameworks to enrich your vision.
Identify your blue ocean
Automated value curve, sourced ERRC grid, and market creation paths. Integrated into a complete strategic diagnosis.