El Salvador - Surfing from the Red to the Blue Ocean? From the “Homicide Capital of the World” to a Country of Hope and Prosperity

Strategy is as much for nation states as it is for companies, a point clearly demonstrated by El Salvador under President Nayib Bukele. Bukele set out to shift El Salvador from a violent red ocean of gang violence and low growth to a blue ocean of growth, prosperity, and hope as well as the start of reverse migration. The once ‘homicide capital of the world’ has emerged as the ‘bitcoin capital of the world’ and a worldclass surfing destination – gangs eradicated, peace restored after decades of violence, tourism flourishing, FDI and GDP on the rise, and citizen’s earnings and well-being improved. And while some of Bukele’s actions have been criticized by international organizations and media, El Salvadoran citizens’ response: Bukele secured a landslide re-election victory in 2024 with 84% of the vote from across the political spectrum. The case illustrates how with a shift in perspective, strategic logic and actions, differentiation and low costs can be achieved to break out of the red ocean at a national level. It also demonstrates how, by identifying and leveraging factors of disproportionate influence, a major strategic shift can be executed fast while conserving resources. The case discusses Nayib Bukele’s shift in the country’s national strategy and challenges students to assess the pros and cons of the strategic shift he has forged for the country. It also asks students to reflect on possible alternative solutions to the dire national situation the country faced as the ‘homicide capital of the world,’ which had persisted for decades prior to Bukele.

1. Discuss how strategy is applicable to nation states, not just to business. Analyze how strategy can enable nations, like organisations, to stand apart and achieve differentiation and low costs; 2. Illustrate how blue ocean strategy tools, like the strategy canvas and eliminate-reduce-raise-create grid, can analyze the national strategic landscape and act as an action framework to formulate a strategic shift that achieves growth and prosperity through differentiation and low cost; 3. Discuss how leaders can execute a major strategic shift while conserving resources and time by identifying and leveraging factors of disproportionate influence; 4. Develop an understanding of the components of a successful blue ocean strategy at the national level – a value proposition that attracts tourists, foreign investors, and talent to spur economic growth; a profit proposition that achieves economic benefits for government coffers; and a people proposition that motivates its citizens to support the strategic shift.