What are the six principles of Blue Ocean Strategy?

Implementing a Blue Ocean Strategy comes with several risks. One of the main risks is the search risk, which arises from the need to educate your customer base about the new market that's been created. Other risks include the risk of execution, which involves the challenges of operationalizing the strategy, and the risk of sustainability, which pertains to maintaining the competitive advantage in the new market. There's also the risk of imitation, where competitors might copy your strategy, and the risk of detachment, where the company might lose touch with its existing market while trying to create a new one.

Blue Ocean Strategy makes existing competition irrelevant by creating a new market space or 'Blue Ocean'. This is achieved by innovating and offering value in areas that the current competition has overlooked, thereby attracting customers and creating new demand. The strategy involves six principles: reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome key organizational hurdles, and build execution into strategy. By applying these principles, a company can shift its focus from competing in a crowded marketplace to creating a new space where it is the only player.

In the context of Blue Ocean Strategy, 'search risk' refers to the potential challenges and uncertainties that a company may face when trying to identify and venture into new, uncontested market spaces (blue oceans). This risk arises from the need to educate the customer base about the new market that's been created. It involves the difficulty of breaking away from the existing industry structure and market boundaries, and successfully identifying and capturing new demand in an unknown market.