The document discusses the concept of Blue Ocean Strategy, which involves creating new market space by exploring unattained opportunities outside of existing industry competition. It provides background on traditional strategic positioning approaches and compares them to how innovative companies discover new "blue oceans" of uncontested market space. The key aspects of Blue Ocean Strategy are outlined, including how companies analyze which attributes to reduce, eliminate, increase or create to establish a new value curve for potential customers.
1. Blue
Ocean
Strategy
The
New
Paradigm
in
Innova2on
Patricio
Guitart
January
2012,
Barcelona,
Spain
Professor,
Management
and
Control
Systems
IAE
Business
School
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4. The
Economic
Crisis
Created
a
New
Consumer
Educated
Adapted:
AcHng
in
control.
Saving
in
expenses
such
as
vacaHons,
clothing
and
entertainment
but
do
Owner of Goods
not
sacrifice
in
terms
of
food,
hygiene
and
personal
care.
Brands
are
now
funcHonal.
Unemployed or
Overqualified
Melancholic:
Behaving
erraHcally
His/Her and
dispersed.
They
want
to
purchasing power maintain
their
previous
consumpHon
paNerns.
They
do
not
sacrifice
any
decreased but not category
but
start
cuOng
off
his/her aspirations
different
products
randomly.
They
hold
onto
the
brand
with
a
sense
of
idenHty
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5. Changes
in
Post-‐Crisis
ConsumpDon
SituaDon
Consequences
• Consumers
“walk
more”.
• Greater
channel
compeHHon
Convenience
now
is
a
lower
price
• More
promoHonal
acHvity
• More
raHonal.
Try
more.
• Small
quality
manufacturers
Verified
quality
over
perceived
and
second
brands
had
their
quality
chance
• ANempHng
to
maintain
• Small
capacity
containers,
consumpHon
on
selected
returnable
and
cheaper.
products
• Brands
that
adapted
kept
• AppreciaHon
for
brands
their
sales
levels
and
grew
supporHng
them
in
the
crisis
exponenHally
aVer
the
crisis
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8. The
ExpectaDon
Economy
• The
ExpectaHon
Economy
is
an
economy
inhabited
by
experimented
and
well
informed
consumers,
with
a
long
list
of
high
expectaDons
that
they
apply
to
every
product,
service
or
experience
offered
to
them.
• Their
expectaHons
are
based
in
many
years
of
“self-‐training”
under
the
hyper
consumerism
years
and
in
all
the
available
informaHon
sources
that
help
them
to
know
and
expect
not
only
the
basic
quality
standards,
but
the
“best
of
the
best”
What
are
the
consequences?
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9. Indifference
DissaHsfacHon
Decreasing
MarkeHng
ROI
Customer
saHsfacHon
declines
in
many
Industries
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12. Informed
and
connected
consumers.
Creators
of
their
own
markets
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13. What
is
the
Blue
Ocean
Strategy?
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14. Before
that,
what
is
strategy?
According
to
Michael
Porter,
strategy
is:
– Means
to
realize
your
vision
and
mission
– A
unique
compeHHve
posiHon
as
a
company
– OpHons
and
alternaHves
in
front
of
the
compeHHon
– Strategy
tells
you
what
you
should
and
shouldn’t
do
Strategy
describes
the
way
the
organizaHon
will
CREATE
VALUE
Source
:
Michael
E.
Porter,
“What’s
Strategy?”
Harvard
Business
Review,
Nov–Dec
1996
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16. What
do
innovaDve
companies
do
differently?
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17. They
discover
new
unexplored
market
spaces
Industry
A
?
?
Industry
B
Industry
C
Source:
Kim
&
Mauborgne
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18. How
do
you
discover
a
new
value
curve?
Increase
Which
aNributes
could
be
increased
over
the
industry
standard?
Eliminate
Create
Which
aNributes
that
New
Value
Which
aNributes
could
be
the
industry
is
not
appreciaHng
can
be
Curve
created
that
the
industry
has
never
offered?
eliminated?
Reduce
Which
aNributes
could
be
decreased
below
the
industry
standard?
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19. The
Concept
of
Value
InnovaDon
Costs
savings
through
Costs
Eliminate
and
Reduce
Value
Advantages
due
to
large
InnovaHon
volumes
Superior
value
from
Create
and
Increase
Shopper
Value
copyright
Kim
&
Mauborgne
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21. The
Australian
Yellow
Tail
Wines
in
the
American
Market
High
Consumer
view
5 Premium
Wines
Yellow
Tail
4
Level of Offer
3
Budget
Wines
2
1
Low
Price
Use of enological Image
Aging
Vineyard Wine
Easy
Ease of Fun and
Wine
terminology and quality
prestige and range
drinking
selection
adventure
complexity
distinctions in legacy
wine
communication
Attributes of product, service and delivery
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22. Eliminate-‐Reduce-‐Raise-‐Create
Matrix
ELIMINATE
RAISE
• Enological
terminology
and
disHncHons
• Price
versus
budget
wines
• Aging
qualiHes
• Retail
store
involment
• Above-‐the-‐line
markeHng
CREATE
REDUCE
• Wine
complexity
•
Easy
drinking
• Wine
range
• Ease
of
selecHon
• Vineyard
presHge
• Fun
and
adventure
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23. Analyzing
six
paths
as
innovaDon
sources
1.
Through
subsHtute
industries
6.
Trends
over
Hme
2.
From
strategic
groups
5.
By
funcHonal
and
emoHonal
connecHons
3.
From
the
shopper
chain
4.
Through
complementary
copyright
Kim
&
Mauborgne
offerings
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24. INCA
Paints
Case
• Leader
in
market
share
and
yop
of
mind
in
the
wall
paints
sector
in
Uruguay.
• Part
of
a
mulHnaHonal
company
that
enables
best
pracHces
in
innovaHon,
operaHons
and
management.
• Well
developed
capabiliHes
in
product
innovaHon
on
a
regional
basis.
• There
challenge
was
to
innovate
in
a
mature
and
impoverished
market
with
increasing
compe22on
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25. SubsDtutes
Paper
Smooth
Cement
Clean
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PracDcal
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26. Strategic
Groups
“Wedding
Planner”
Comprehensive
Guidance
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27. Shoppers
Value
Chain
The Painter’s
Design Advice
Happiness Pill
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30. Time
/
Trends
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31. ATRIBUTOS NIVEL DEL ATRIBUTO
COMPETITIVOS
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Accesibilidad Geográfica
Calidad (Cob, Dur,Lav,Etc)
INCA New
INCA Hoy
Confianza/Garantía/Respaldo
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Precio
Calidad de Entrega
Asesoramiento Integral Al
Alcance De Todos
Capacitacion Integral
Comunicaciones
Personalizada
Fidelización del Pintor
Soluciones Especificas A
NUEVA CURVA DE VALOR INCA
Través Del Producto
Rentabilidad Al Indirecto
Servicios De Color
Final
Value
Curve
for
INCA
Paints
Accesibilidad Economica
Pintar es atractivo
Proceso Fácil y Limpio
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32. InnovaDon
IniDaDves
Before
Space
at
the
Point
of
Sale
“We
work
with
all
Firm
XYZ
por<olio:
interior,
exterior,
ARer
decoraAves,
water
repelents,
enamels
and
more.
We
have
a
colorful
space
designed
thinking
of
your
comfort
where
you
can
select
from
our
paleFe
(XYZ
Color
Service)
to
decorate
your
home.
Besides,
if
you
bring
a
digital
picture
of
the
room
or
rooms
that
plan
to
paint,
we
can
advice
you
on
color
selecAon
thorugh
the
ROOM
COLOR
SIMULATOR
of
XYZ
COLOR
SERVICE.
Specialized
staff
trained
by
XYZ
will
be
with
you
along
the
way.”
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33. Results
• Closer
understanding
by
non-‐commercial
areas
of
the
company
to
customers,
distributors
and
final
shoppers
• Discovering
the
gap
between
internal
percepHons
and
market
realiHes
related
to
consumer
preferences
• New
paradigm
for
the
company
from
being
product
oriented
to
improving
customer
experiences
• AddiHon
of
new
aNributes
and
innovaHve
aNributes
to
INCA
paints
value
proposiHon
• Renewed
sense
of
urgency
to
change
current
markeHng
and
communicaHon
strategy
They
were
focused
on
innova2ng
on
new
paints
when
the
consumer
wanted
solu2ons
to
improve
the
before-‐
and-‐aFer
the
pain2ng
process
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34. What
is
Value
Co-‐CreaDon?
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35. Today,
customers
are
very
acDve,
informed
and
connected
Product & Service Offerings
The Marketing
Suppliers
Firm Channels
SCM
ERP
CRM
Firm
Customer
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36. Co-‐CreaDon
of
Experiences
with
Customers
and
Consumers
Greater Value Differentiated
to Firm
Experience to
Customers
EXPERIENCE
Lower Cost to Lower Cost to
Firm
Customer
Customer/
Firm
Consumer
Experience
Environment
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37. Principles
of
Experience
Co-‐CreaDon
How can we grant access to all How can we engage individuals in
required information? significant conversations?
Access
Dialog
Risk Management
Transparency
How can we reduce risk How can we reduce the
for both parties? opacity of the current
process?
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39. The
tradiDonal
shoe
maker
considers
that
value
is
generated
along
the
whole
value
chain
Shoe Shopper (passive)
Processes of a
traditional shoe
manufacturer
Shoe Manufacturing Store
Shoe Design Sales
Manufacturer Marketing Store
Distribution
Supply
39
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40. But
runners
have
their
own
value
chain
Runner
(customer)
Define Recording Setting Exchanging
Looking for Buying Running Listening own distances improvement Running advice with
outfits outfits alone music routes and times goals in groups colleagues
Runner
Processes
40
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41. Customers
and
NIKE
have
few
overlapping
processes
41
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42. Co-‐CreaDng
Outside-‐In
How can we create
corporate
processes that
impact customers’
processes?
42
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43. NIKE
let
runners
co-‐create
their
own
experience
from
the
“outside
in”
43
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44. Record
of
Runs
44
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57. What
do
we
need
to
innovate?
Employees with innovation tools
Capabilities to execute
Employees motivated to innovate
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58. Features
of
a
Good
Blue
Ocean
Strategy
FOCUSED
ORIGINAL
SIMPLE
MESSAGE
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59. Welcome
to
the
Blue
Ocean
World
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60. Blue
Ocean
Strategy
References
Renée
Mauborgne
is
one
of
the
world’s
preeminent
experts
on
business
strategy,
innovaHon
and
wealth
creaHon
in
the
knowledge
economy.
Renée
is
a
very
impressive
presenter—engaging,
energeHc
and
intelligent,
with
substanHve
material
that
can
significantly
impact
your
organizaHon’s
performance.
She
is
the
highest
placed
woman
on
Thinkers
50,
the
global
ranking
of
business
gurus.
In
2007,
2009
and
again
in
2011,
Thinkers
50
placed
Mauborgne
among
the
top
ten
most
influenHal
business
thinkers
in
the
world.
Her
book,
Blue
Ocean
Strategy:
How
to
Create
Uncontested
Market
Space
and
Make
the
CompeHHon
Irrelevant
(Chan
Kim,
coauthor),
is
an
internaHonal
bestseller.
Blue
Ocean
Strategy
has
sold
over
two
million
copies
and
is
being
published
in
41
languages,
breaking
Harvard
Business
Press’s
historical
record
of
most
foreign
language
translaHons
ever
achieved.
Blue
Ocean
Strategy
won
the
Best
Business
Book
of
2005
Prize
at
the
Frankfurt
Book
Fair
and
was
selected
as
the
number
one
Strategy
Gook
of
2005
by
Strategy
+
Business
and
as
a
Top
Ten
Business
Book
of
2005
by
Amazon.com.
With
Blue
Ocean
Strategy,
Renée
brings
business
audiences
a
genuinely
important
breakthrough
in
strategic
business
thinking,
which
is
changing
the
business
lexicon
across
the
globe.
Renée
Mauborgne
is
The
DisHnguished
Fellow
and
a
professor
of
Strategy
and
Management
at
INSEAD
in
Fontainebleau,
France,
the
world's
second
largest
business
school.
She
is
Co-‐Founder
and
Co-‐Director
of
the
INSEAD
Blue
Ocean
Strategy
InsHtute
and
is
a
Fellow
of
the
World
Economic
Forum.
Her
Harvard
Business
Review
arHcles,
coauthored
with
W.
Chan
Kim,
are
worldwide
bestsellers
and
have
sold
more
than
half
a
million
reprints.
Their
"Value
InnovaHon"
and
"Fair
Process"
arHcles
were
selected
as
among
the
best
classic
arHcles
ever
published
in
HBR.
She
has
published
numerous
arHcles
on
strategy
and
managing
the
mulHnaHonal
corporaHon
in
a
host
of
other
first-‐Her
business
journals.
Mauborgne
has
received
a
number
of
presHgious
awards
for
her
contribuHons
to
business
thought
leadership
and
has
been
widely
praised
in
the
internaHonal
business
media.
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61. Value
Co-‐CreaDon
References
Francis
Gouillart
is
President
and
one
of
the
two
founders
of
the
Experience
Co-‐CreaHon
Partnership
(ECC
Partnership),
a
consulHng
firm
built
to
implement
co-‐creaHve
management
processes
and
organizaHonal
capabiliHes
with
corporate
clients
around
the
world.
Francis
is
co-‐author,
with
Venkat
Ramaswamy,
of
the
newly
published
book
The
Power
of
Co-‐CreaHon:
Build
It
with
Them
to
Boost
Growth,
ProducHvity,
and
Profits
(Simon
&
Schuster
Free
Press,
October
2010)
and
the
Harvard
Business
Review
arHcle
“Building
the
Co-‐CreaHve
Enterprise”
(October
2010).
He
previously
co-‐
authored
(with
James
Kelly)
the
book
Transforming
the
OrganizaHon
(McGraw-‐Hill),
which
reached
the
top
of
BusinessWeek’s
best-‐seller
list
in
1995.
He
is
also
co-‐author
(with
Frederick
Sturdivant)
of
the
arHcle
“Spend
a
Day
in
the
Life
of
Your
Customers,“
published
by
Harvard
Business
Review
(January-‐February
1994).
He
also
authored
Stratégie
pour
une
Entreprise
CompéHHve
(EdiHons
Economica,
Paris),
which
was
named
“Best
Strategy
Book
of
the
Year”
by
the
French
AssociaHon
of
Strategic
Planners
(AFPLANE)
in
1989.
Francis
is
considered
a
leading
authority
on
the
topics
of
strategy,
innovaHon,
transformaHon,
and
capabiliHes-‐
building
and
is
a
recognized
speaker,
lecturer,
and
advisor
on
Experience
Co-‐CreaHon,
Blue
Ocean
Strategy,
and
OrganizaHonal
TransformaHon.
He
works
across
the
United
States,
Europe,
and
Asia,
and
has
experience
in
most
industries.
Francis
has
been
quoted
in
the
Wall
Street
Journal,
BusinessWeek,
and
Fortune,
among
other
publicaHons,
and
has
been
featured
on
CNBC.
He
is
currently
working
with
global
management
consulHng
firm
PRTM
to
use
co-‐creaHon
concepts
and
methods
to
transform
enterprise
operaHons
and
business
models
across
industries
globally.
Francis
received
his
MBA
from
the
University
of
Chicago’s
Graduate
School
of
Business,
and
resides
in
Concord,
MassachuseNs.
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