The Blue Ocean Strategy is a business strategy about capturing uncontested market space, thereby making competition irrelevant. It is also a book written by Professor W. Chan Kim and Professor Renée Mauborgne, from the INSEAD business school.
The "ocean" refers to the market or industry. "Blue Oceans" are untapped and uncontested market, which provides little or no competition for anyone who would "dive" in, since the market is not crowded. "Red Ocean" on the other hand, refers to a saturated market where there are fierce competition, already crowded with people (companies) providing the same type of services, producing the same kind of goods.
The idea is to do something different from everyone else, produce something that no one has yet seen, thereby creating a "blue ocean".
Some examples of companies that created the "Blue Ocean": Cirque du Soleil (unique circus format), Gmail (tons of email storage space for free) and Nintendo Wii (first home game console with movement sensor devices for gaming).