A Red Ocean Strategy is a business tactic in which a brand directly competes within its peer group to achieve greater market share.
Professor W. Chan Kim and Renée Mauborgne wrote “The Blue Ocean Strategy” in 2004. In the text, the authors describe two approaches to business: red oceans and blue oceans.
When employing a Red Ocean Strategy, a business focuses entirely on beating its competition to gain greater market share and consumer demand. The authors note, however, that as more businesses enter the market, competition gets increasingly more fierce, and opportunities for profit and business growth reduce — sometimes dramatically.
In this way, the Red Ocean Strategy represents the traditional approach to business growth, in which businesses focus their operations on outperforming others in their peer group. The authors, however, advise that brands shift to the Blue Ocean Strategy, which is when businesses focus on creating entirely new markets and attracting new consumer segments, rather than competing. This strategy, the authors claim, helps brands create more authentic strategic frameworks that foster continual growth.