Final answer:
A blue-ocean strategy is a business strategy that involves creating a new market or industry with little or no competition. It appeals to companies by allowing them to capture new customers, create new demand, and differentiate themselves. However, it can be risky and uncertain with the possibility of imitation by competitors.
Step-by-step explanation:
A blue-ocean strategy is a business strategy that involves creating a new market or industry with little or no competition. It is called 'blue ocean' because it represents uncharted and uncontested waters, unlike red ocean strategies which involve competing in existing markets with a lot of competition.
The appeal of a blue-ocean strategy is that it allows companies to capture new customers, create new demand, and differentiate themselves from competitors. By offering unique products or services in a new market, companies can often achieve high profitability and growth.
One drawback of a blue-ocean strategy is that it can be risky and uncertain. Since there is no existing market or competition to benchmark against, it can be difficult to predict customer demand and market acceptance. There is also the risk of imitation, as competitors may quickly enter the new market and erode any competitive advantages that were initially gained.