Blue Ocean Strategy: A Comprehensive Review of Creating Uncontested Market Space

3. Reach Beyond Existing Demand

This principle challenges the conventional wisdom of customer segmentation. Instead of dividing markets into smaller niches, blue ocean strategy aggregates demand by:

Understanding Three Tiers of Noncustomers:

┌─────────────────────────────────────────┐
│  TIER 1: "Soon-to-be" Noncustomers     │
│  - On the edge, ready to jump ship      │
│  Example: Professionals eating at       │
│  restaurants but seeking faster,        │
│  healthier options → Pret A Manger      │
└─────────────────────────────────────────┘
          ↓
┌─────────────────────────────────────────┐
│  TIER 2: "Refusing" Noncustomers       │
│  - Consciously reject your offerings    │
│  Example: Companies that found outdoor  │
│  advertising ineffective → JCDecaux     │
│  street furniture ads                   │
└─────────────────────────────────────────┘
          ↓
┌─────────────────────────────────────────┐
│  TIER 3: "Unexplored" Noncustomers     │
│  - Never considered your market         │
│  Example: Different military branches   │
│  → Joint Strike Fighter program         │
└─────────────────────────────────────────┘

Real-World Power: Callaway Golf looked at why sports enthusiasts avoided golf and discovered hitting the ball was too difficult. Their solution—Big Bertha with its oversized club head—converted noncustomers into a massive new market segment.

Where This Falls Short: The book romanticizes noncustomers without acknowledging that some people don’t use your product for legitimate reasons you can’t fix. Not everyone who avoids golf does so because of club size. Some simply don’t enjoy the game, and no innovation will change that. The framework lacks guidance on distinguishing convertible noncustomers from truly uninterested ones.

4. Get the Strategic Sequence Right

The authors present a critical four-step sequence for validating blue ocean ideas:

Blue Ocean Strategic Sequence:

BUYER UTILITY → STRATEGIC PRICE → TARGET COST → ADOPTION
     ↓               ↓                ↓             ↓
  Is there a    Price accessible  Can you profit  Can you address
  compelling    to mass of       at strategic    adoption hurdles
  reason to     target buyers?   price?          upfront?
  buy?          
     ↓               ↓                ↓             ↓
  If NO:        If NO:           If NO:          If NO:
  Park or       Rethink or       Rethink         Address or
  rethink       don't pursue     business        rethink
                                 model

The Buyer Utility Map helps evaluate whether your offering creates exceptional utility across six stages of the buyer experience (purchase, delivery, use, supplements, maintenance, disposal) and six utility levers (customer productivity, simplicity, convenience, risk reduction, fun and image, environmental friendliness).

Strategic Pricing vs. Cost-Plus Pricing:

Traditional approach: Cost + Desired Profit Margin = Price

Blue Ocean approach: Strategic Price – Desired Profit Margin = Target Cost

Brilliant Insight: This reverses conventional thinking. Instead of letting costs drive prices, you start with what the mass market will pay, then work backward to achieve your target cost through innovation.