Creating an approach that balances Blue Ocean market innovation with competitive domination in existing Red Ocean markets represents an effective strategy for achieving successful profitability and growth.

Recent research has revealed a period of over a decade for competitive strategies to fully erode the profits generated by successful innovations that create new market opportunities. However, in considering an innovation based Blue Ocean strategy it is also worth noting that it is not always the early innovators who reap the best profits from the new markets; often it is those who follow in closely behind who use incremental and adaptive innovation to create second generation offerings. This of course represents the beginning of the shift from Blue to Red Ocean and to more competitive strategies.

In developing the correct strategic balance the following issues should be considered:

• the potentially high costs of opening a new market, especially where value proposition innovations are required, require robust financial liquidity;
• a balanced focus with competitive positioning in existing markets may help mitigate the impacts of any risks and providing the necessary funds for innovation;
• the ability to adequately protect valuable intellectual property will be key to sustaining a market leadership position;
• the use of continuous incremental and adaptive innovation to create “Blue Zones” within existing markets may provide more opportunities than radical innovation to create completely new Blue Oceans.

In the new world economic order the need for fast paced innovation needs addressing, but businesses who neglect the need to be competitive in their exiting markets do so at their peril .