Blue Ocean Strategy is a strategic planning and management framework that focuses on creating new market spaces or “blue oceans” rather than competing in existing, overcrowded market spaces, often referred to as “red oceans.” This concept was introduced by W. Chan Kim and Renée Mauborgne in their 2005 book titled “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.”

Key principles and components of Blue Ocean Strategy include:

1. Value Innovation: Instead of simply trying to outperform competitors in an existing market, blue ocean strategy encourages companies to focus on creating and capturing new value for customers. This often involves innovating in product or service offerings.
2. Eliminate-Reduce-Raise-Create (ERRC) Grid: This tool helps in the systematic identification of factors that need to be eliminated or reduced (to cut costs), factors that should be raised (to provide added value), and factors that should be created (to innovate and differentiate).
3. Four Actions Framework: This framework prompts companies to ask four key questions to break away from industry norms:
   • What factors can be eliminated?
   • What factors can be reduced well below the industry standard?
   • What factors can be raised above the industry standard?
   • What factors can be created that the industry has never offered?
4. Six Paths Framework: This framework provides six different ways to look at innovation, including looking across industries, strategic groups, buyers, complementary products and services, functional-emotional appeal, and time.
5. Tipping Point Leadership: Blue Ocean Strategy emphasizes that achieving a successful shift from a red ocean to a blue ocean requires effective leadership and change management. Tipping Point Leadership is a concept introduced to address the challenges of organizational change.
6. Visualizing Strategy: Visualization tools, such as the Strategy Canvas, are used to help teams understand and communicate their strategy visually. It provides a clear picture of where a company currently stands in terms of competitive factors and where it aims to be.

Blue Ocean Strategy has been used by many companies and organizations to innovate and create new markets, ultimately making competition less relevant. It is particularly valuable for businesses seeking to differentiate themselves in a saturated and competitive marketplace.