Red Ocean Strategy

A term from W. Chan Kim and Renée Mauborgne's strategic framework describing competition in existing market spaces where industry boundaries and competitive rules are well-established. In red oceans, companies try to outperform rivals to capture greater market share in a limited market, often leading to commoditization and reduced profit margins. The term contrasts with Blue Ocean Strategy, which focuses on creating uncontested market spaces. In RBPM, organizations pursuing red ocean strategies must carefully define risk appetite levels related to competitive actions and pricing strategies.