Our research reveals that most companies’ strategic planning process keeps them wedded to red oceans. The process tends to drive companies to compete within existing market space.

If you ask companies to present their proposed strategies in no more than a few slides, it is not surprising that few clear or compelling strategies are articulated.

The more intense the competition is, the greater, on average, is the resulting customization of offerings. As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets.

Companies with a diverse portfolio of businesses, such as Apple, General Electric, Johnson & Johnson, or Procter & Gamble, will always need to swim in both red and blue oceans at a given point in time and succeed in both oceans at the corporate level. This means that understanding and applying the competition-based principles of red ocean strategy are also needed.

This is not to suggest that companies will suddenly stop competing or that the competition will suddenly come to a halt. On the contrary, the competition will be more present and will remain a critical factor of market reality. As captured on the dynamic PMS map, red ocean and blue ocean strategies are complementary strategic perspectives, with each serving different and important purposes.

Blue ocean strategy does not see competition as bad. However, unlike traditional economic thought, it does not see competition as always good.

Competition is only good up to a point. When supply exceeds demand