Are you in the Blue Ocean or the Red Ocean?

It’s nothing to do with football teams (though I admit that was my first thought) and your answer could be worth millions. It is an ‘easy to apply’ theory that helps companies position themselves for greatest commercial benefit. It was developed by INSEAD in 2005 the basis of which is that companies can be put into one of two camps; The Red Ocean or the Blue Ocean.

Most companies compete in the Red Ocean. The Red Ocean is a crowded market with known, established variables or norms. One of the examples INSEAD uses is that of circuses; in this sector the established norms are big tops, clowns, trapeze artists, etc. and the circuses all compete in the space using the same variables. The Red Ocean is red because it is bloody. It is possible to win in the Red Ocean but margins are squeezed as costs are higher.

INSEAD proved that the most financially successful companies are positioned in the Blue Ocean. In effect, they step out of the ‘norms’ of their sector and create something new and unique that can’t be compared with other companies. Cirque du Solei and Centre Parcs both occupy
Blue Oceans. Both have been hugely successful, can charge a healthy premium and can defend themselves from any competitors wishing to turn their Blue Ocean into a red one.

It is a well-developed, proven theory, it is financially compelling and you can apply it in the real world. So I tried to apply it to one of the most real world sectors I know (and love!), the Fast Fit sector as I think it could do with some Blue Ocean thinking.

The Fast Fit sector is occupied by Kwik Fit, ATS Euromaster , National Tyres and Autocare and numerous regional and local players. It is a hard market. Margins are tight and competition is fierce.

It was, of course, an original Blue Ocean. Tom Farmer and Kwik Fit blew the market apart in the 70s and 80s by changing the norms and made a fortune. But 30 years on it has become a classic Red Ocean. The norms of the market are firmly established and the players have to compete largely on price.

So where is Fast Fits new Blue Ocean? It must be out there and whoever gets there first will enjoy its fruits for years to come, just look at the consumer changes that exert the pressure for change.


. 40 per cent of cars on the road belong to women (up from 5.8 million 20 year ago)
. The number of households with four or more cars has soared by 51 per cent to nearly half a million over the past decade.
. Studies have shown that fewer young adults have driver’s licenses, they are falling out of love with the car.

Add to this the growing service expectations, growing cynicism about lack of transparency, the chronic lack of time that people have and it is inevitable that someone will soon set sail for the blue ocean.

Whoever sets sail will be innovative and brave. They will take the existing sector norms and challenge them systematically and vigorously. Combining their innovation with blinding consumer insight will lead them to a blue ocean.


So, the big question; are you red or are you blue?

Click the link below to watch one of our Vistarites, Gary Moss, explain the theory using rubber duckies!