Blue Ocean Strategy: Reyes HaircuttersPresentation Transcript
How Blue are You?
Is your company facing fiercer competition from local and international rivals?
Are you increasingly tempted to offer lower prices to close sales?
Do you sense that your product/services are fast becoming “commodities”?
Do you sense slow growth due to intense competition and market slowdown?
Are your key competitive factors largely the same as that of your competitors?
What is Blue Ocean Strategy?
Go where the profits and growth are - and where competition isn’t (Authors : W. Chan Kim & Renee Mauborgne)
Red Ocean vs. Blue Ocean
Value Innovation The Cornerstone of BOS Costs Buyer Value Value Innovation The Simultaneous Pursuit of Differentiation and Low Cost
Reconstruct Market Boundaries
The Six-Paths Framework
Key BOS Principle No.1
Draw “AS IS” Strategy Canvass
Four Action Framework Eliminate Reduce Raise Create Which of the factors that the industry takes for granted should be eliminated? Which factors should be reduced well below the industry’s standard? Which factors should be created that the industry has never offered? Which factors should be raised well above the industry’s standard? NON-VALUE- ADDING FACTORS VALUE-ADDING FACTORS
Draw “TO BE” Strategy Canvass
A New Value Curve : Strategy Canvas of Yellow Tail Premium Wines [yellow tail] Budget Wines CREATE ELIMINATE REDUCE RAISE Price Easy drinking Ease of selection Fun and adventure Wine range Wine complexity Vineyard prestige Aging quality Above-the-line marketing Use of enological terminology and distinctions in wine communication High Medium Low
The 6 conventional market boundaries to spot Blue Ocean Opportunities Industry Buyer Group Strategic Group Functional/Emo Orientation Scope of Product Offering Time/Trend Red Ocean (competing within) Blue Ocean (competing across)
Lounges Meals, Newspaper Seating choices Four Action Framework: of Cebu Pacific Eliminate Price Reduce Friendly service Speed Safety (new planes) Raise Frequent point-to- point departures Create Lower Cost Differentiate
Reach Beyond Existing Demand
Buyer Experience Cycle, Pain Points
Key BOS Principle No.3
3 Tiers of Non-Customers
Buyer Experience Cycle
Buyer Experience Cycle In the buyer’s experience, what are the BIGGEST PAIN POINTS, fears, risks, obstacles, in each stage and for each utility lever (which makes him choose not to buy, or not to buy more from you)?
Explore Along Six-Paths From where do NON-CUSTOMERS derive or acquire the BENEFITS your product or service could give? What are the PAIN POINTS and/ or reasons why NON-CUSTOMERS prefer those products, substitutes, services, or industries, rather than yours? What exceptional value or buyer utilities can we offer, given these insights?
Get the Strategy Sequence Right
Executing a Commercially Viable BOS Business
Key BOS Principle No.4
BOS Viability Sequence Buyer UTILITY Exceptional? Does your idea offer exceptional value or BUYER UTILITY, or a compelling reason for this target mass of buyers to buy it? Target PRICE Affordable? COSTS low enough to be profitable? ADOPTION Issues Addressed? A Commercially Viable Blue Ocean Strategy IDEA! Yes? Yes? Yes? Yes? Is your TARGET PRICE affordable to this target mass of buyers? Can you contain your COSTS to make money, or profit, given your target price? Can you prevent or overcome the obstacles to ADOPTION of your idea or strategic move? No? No?