Value Innovation And Blue Ocean Strategy In The Wam

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Slides used for understanding Blue Ocean Strategy (2005) and Value Innovation. Grasping how to beat the Value/Cost Trade off

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Value Innovation And Blue Ocean Strategy In The Wam

  1. 1. value creation and blue ocean strategy in the WAM<br />
  2. 2.
  3. 3. Value Innovation<br />Blue Oceans vs Red Oceans <br />Building Your Value Factors & Four Actions Framework<br />
  4. 4. TAKE OUTS<br /><ul><li>BRAIN GYM
  5. 5. THE CONCEPT OF VALUE INNOVATION
  6. 6. UNDERSTANDING BLUE OCEAN STRATEGY
  7. 7. FOUR ACTIONS FRAMEWORK
  8. 8. BUILDING YOUR VALUE FACTORS</li></li></ul><li>BODY HACK<br />
  9. 9. Thinking Partnership<br />Tell someone about a recent purchase you have been extremely happy with and one which you think added a lot of value to you. Why? What was the value it added? <br />
  10. 10. Value is Multiple<br />
  11. 11. VALUE INNOVATION<br />PERCEIVED VALUE<br />PRICE<br />COST<br />
  12. 12. Moving away from Strategy as the territory of War<br />
  13. 13. Red and Blue Ocean Strategy<br />Red Ocean Strategy<br />Compete in existing market space<br />Beat the competition<br />Exploit existing demand<br />Make the Value/Cost trade-off<br />Align the whole system of a company’s activities with its strategic choice of quality differentiation or low cost<br />Blue Ocean Strategy<br />Create uncontested market space<br />Make competition irrelevant<br />Create & capture new demand<br />Break the Value/Cost trade-off<br />Align the whole system of a company’s activities with its strategic choice of quality differentiation and low cost<br />
  14. 14.
  15. 15. Value Innovation for [Yellowtail]<br />5<br />4<br />3<br />2<br />1<br />0<br />Price<br />Wine range<br />Aging quality<br />Easy drinking<br />Easy selection<br />Fun & Adventure<br />Wine complexity<br />Vineyard prestige<br />Above-the-line marketing<br />Use of enological terminology<br />Premium Wines<br />Budget Wines<br />Yellow Tail<br />
  16. 16. “The most powerful family owned wine brand in Australia”<br />Intangible Business(2009)<br />“Fifth most powerful wine brand in the world”<br />Food Week (2008)<br />
  17. 17. Value Innovation For Cirque De Soleil<br />HIGH<br />Ringling Bros. and Barnum Bailey Value Curve<br />Cirque De SoleilValue Curve<br />Smaller Regional Circuses<br />LOW<br />Price<br />Theme<br />Unique Venue<br />Animal Shows<br />Fun and Humor<br />Star Performers<br />Thrills and Danger<br />Aisle Concessions<br />Multiple Productions<br />Multiple Show Arenas<br />Artistic Music and Dance<br />Refined Watching Environment<br />http://pds4.egloos.com/pds/200708/04/00/d0028500_05080812.jpg<br />
  18. 18. high<br />Level of value<br />low<br />e.g. price<br />Value factors<br />Strategy Canvas<br />Plot value factors against level of value offered<br />
  19. 19. Four Actions Framework<br />(Kim & Mauborgne, 2005)<br />
  20. 20. Four Actions Framework<br />Cost Structure Reduction<br />ELIMINATE<br />What costs a lot and does not seem to add much more value?<br />REDUCE<br />Where can you decrease emphasis?<br />Buyer Value<br />RAISE<br />Which current value offering should you increase, or add to? What can you increase that does not cost much, but raises the perceived value of what you sell considerably?<br />CREATE<br />What would your customer really appreciate that is not being offered in your industry at the moment? Is there any other value “factor” you could add or create which would make you stand out from everybody else who does what you do?<br />
  21. 21. Value Innovation<br />Are you seeing the whole picture? Ladder of Inference<br />Value Factors – What are you assuming to be true which is not necessarily so?<br />
  22. 22. VALUE INNOVATION<br />How do you build VALUE?<br />Perceived Benefit – Cost = Value Innovation<br />
  23. 23. Value Innovation<br />COSTS<br /> VALUE INNOVATION<br />BUYER VALUE<br />
  24. 24. Six Paths Framework<br />To reconstruct market boundaries, look across:-<br />Alternatives: Ch/air/bag, Art, Second hand stores, online etc<br />Strategic groups – what does the premium market offer which would cost little to add<br />Chain of buyers incl. strategic network<br />Complementary products & services– coffee shop, meal coupons<br />Functional or emotional appeal to buyers<br />Time<br /> (Kim & Mauborgne, 2005)<br />
  25. 25.
  26. 26. INSIGHT<br />USE<br />INSIGHT<br />USE<br />UNCLEAR<br />

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