Final answer:
Blue Ocean and Red Ocean are terms that describe the level of competition in different market spaces. A Blue Ocean is a new and uncontested market space, while a Red Ocean is a saturated market with fierce competition. When entering new market spaces, firms should consider market dynamics such as market power, product differentiation, and barriers to entry.
Step-by-step explanation:
The terms Blue Ocean and Red Ocean refer to different market conditions in the world of business competition. A Blue Ocean signifies unexplored market space, free of competition, where companies can innovate without the constraint of existing industry boundaries. This is contrary to a Red Ocean, where companies fiercely compete in saturated markets, often fighting over price or other competitive factors such as advertising.
New market spaces, often associated with Blue Ocean strategy, are areas where consumer demand is created rather than fought over. In these spaces, firms have the opportunity to offer unique value propositions that can render the competition irrelevant. When considering entering a new market, firms should analyze factors such as market power, product uniqueness, barriers to entry, and competition strategies to determine their potential success.