Blue Ocean Strategy is a business methodology that says: instead of competing in a market with existing competitors (red oceans), why not create your own market (blue ocean) and dominate it?
Here is a summary in slide form of the book's gist. http://www.slideshare.net/jessestarmer/blue-ocean-strategy-summary-61974
There are pros and cons to each. Here is a brief list for you to chew on.
Red oceans are red oceans because there is measurable consumer interest (the market is validated). This is the first risk of adopting blue oceans: your customer base literally ranges from 0 to billions.
Red oceans make it difficult for customers part of a red ocean market to switch between vendors (customer poaching). Blue oceans obviously don't have this problem.
Red oceans represent an already-developed market. To develop a blue ocean market, it not only requires hard work and relentless validation of the market, but also years of doing so until the market is seen as one. Unless, of course, you are Apple, Google, Microsoft, or some other juggernaut that has influence over a consumer audience.
Blue Ocean Strategy is one of the most popular business books, and although it includes a good amount of research and case studies approving the strategy, I want to hear what you think about it.