![]() ![]() 1 Industrial organization (IO) economics gave formal expression to the prominent importance of competition to firms' success. The very language of corporate strategy is deeply imbued with military references-chief executive " officers " in " headquarters, " " troops " on the " front lines, " and fighting over a defined battlefield. Such focus on the competition traces back to corporate strategy's roots in military strategy. Today, one can hardly speak of strategy without involving the language of competition: competitive strategy, competitive benchmarking, building competitive advantages, and beating the competition. Blue oceans, in contrast, are defined by untapped market space, demand creation, and the opportunity for highly profitable growth.į or twenty-five years, competition has been at the heart of corporate strategy. Products become commodities, and cutthroat competition turns the red ocean bloody. As the market space gets crowded, prospects for profits and growth are reduced. Here, companies try to outperform their rivals to grab a greater share of existing demand. ![]() In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Blue oceans denote all the industries not in existence today. Red oceans represent all the industries in existence today. To understand what Cirque du Soleil has achieved, we need to imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. The only way to beat the competition is to stop trying to beat the competition. A lot of unique companies (like Cirque du Soleil) succeeded because they realized that to win in the future, companies must stop competing with each other.
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