Running a Red Ocean Strategy

Red ocean competition is a situation that the modern strategic literature advises against at any cost, considering it imperative for firms to find their way into the “blue oceans” of new market creation and to avoid head-to-head competition. Yet red oceans are a fact of life for many businesses globally. Grocery retailing is a perfect example: most of the turnover is generated by a limited set of products, and nearly all of them are available to all retailers to resell. Given the red ocean nature of digital platforms or business ecosystems such as Amazon, AliExpress, Uber, and App Store, why do businesses participate in them? In this article, the authors argue that some sport disciplines demonstrate the same mechanisms of competition as red ocean markets, where firms use homogenously distributed resources to create products with no major opportunities for changing the rules of the game. The experience of ultramarathons and ultramarathoners provides an apt working analogy for competition in red ocean markets, as the leading events have similarities to international digital marketplaces. They are all open to competitors from across the globe and provide them with equal opportunities, one goal, and a unified set of rules. Indeed, the one-to-many competitions of ultramarathons (as well as many other sports disciplines) are closer to the realities of business than the series of duels that happen in various team sports, which have been frequently used as material for resource-based analyses in business literature.