Would you opt for Red or Blue ocean strategies in a highly competitive market?

I Would suggest to opt for red ocean strategy being it gives us space to 

1. compete in the existing market space

2. Exploit existing demand & Beat the competition.

3. Align its company activity with strategic choice differentiating on product or price..

Where as Blue ocean strategy opts for cut throat competition in terms of pricing and make the competition irrelevant where in long run will damage the brand & also profitability...

It depends on your "position"within this highly competitive market and what options you have to deal with it in the best way possible. To understand your position, I would advise a balanced scorecard based SWOT analysis for your own company and for your top3 competitors in the target market(s)

Blue ocean strategies--to concentrate more on the product/quality, growth of the business and have ease on unwanted/unhealthy  troubles.