Ralph Lauren, the U.S. designer, created a blue ocean of “high fashion with no fashion” by understanding the factors that determine buyers’ decisions to trade up or down from one strategic group to another.
In creating Polo, Ralph Lauren combined the most attractive features of two strategic groups in fashion: haute couture and classical lines. Its designer name, the elegance of its stores, and the luxury of its materials capture what most customers value in haute couture. At the same time, its updated classical look and price capture the best of the classical lines such as Brooks Brothers and Burberry. By combining the decisive factors of both groups and eliminating or reducing everything else, Polo Ralph Lauren not only captured share from both strategic groups, but also drew many new customers into the market.
Polo Ralph Lauren’s blue ocean strategic move illustrates the potential to create new market space by looking across strategic groups in an industry, path two in blue ocean strategy’s six paths framework.