In today's environment most firms operate under intense competition and try to do everything to gain market share. When the product comes under pricing pressure there is always a possibility that a firm's operations could well come under threat. This situation usually comes when the business is operating in a saturated market, also known as 'Red Ocean'.
When there is limited room to grow, businesses try and look for verticals or avenues of finding new business where they can enjoy uncontested market share or 'Blue Ocean'. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition.
The strategy aims to capture new demand, and to make competition irrelevant by introducing a product with superior features. It helps the company in make huge profits as the product can be priced a little steep because of its unique features.