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Blue ocean strategy

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Pampanga's Best Tocino - A Blue Ocean in 1967

Pampanga's Best Tocino - A Blue Ocean in 1967

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  • This template is in widescreen format and demonstrates how transitions, animations, and multimedia choreography can be used to enrich a presentation.
  • In order to break the trade-off between differentiation and low cost and create a new value curve…
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    • 1. ENTREPRENEURSHIPPROF. Jorge Saguinsin
      ANGELICA O. HIZON
    • 2. What Is Blue Ocean Strategy?
      Provides a systematic approach in making the competition irrelevant
      Growing the demand and breaking-away from competition
      Maximize opportunity and minimize risk
      Go where profits and growth are and where the competition isn’t
      - Kim and Mauborgne-
    • 3. CIRQUE DU SOLEIL
    • 4. PRINCIPLES of BLUE OCEAN
      RED OCEAN STRATEGY
      Compete in existing market space
      Beat the competition
      Exploit existing demand
      Make the value-cost trade-off
      Align the whole system of a company’s activities with its strategic choice of differentiation OR low cost
      BLUE OCEAN STRATEGY
      INNOVATION
      Create unknown market space
      Make the competition irrelevant
      Create and capture new demand
      Break the value-cost trade-off
      Align the whole system of a company’s activities in pursuit of differentiation AND low cost
      Ringling Brothers vs Cirque de Soleil
    • 5. ANALYTICAL TOOLS and FRAMEWORKS
    • 6. SIX PATHS TO BLUE OCEAN STRATEGY
      Focusing on competing within an industry
      Looking across alternative industries
      A company confining itself to established strategic groups
      Looking across strategic groups within industries
      To Creating
      Across
      Focusing on the same buyer group as the rest of the industry
      From competing within
      Looking across the chain of buyers
      A company limiting itself to the scope of an industry's products and services
      Looking across complementary products and services
      Accepting an industry's functional or emotional orientation
      Looking across functional or emotional appeal to buyers
      Focusing on the same point in time as the rest of the industry
      Looking across time
    • 7. VALUE INNOVATION
      Cornerstone of Blue Ocean Strategy
      Focuses on making competition irrelevant by creating a leap in value for buyers and the organization, thus opening new and uncontested market place
      Defies the most commonly accepted dogmas in competition; the value-cost trade-off (high value = high cost & vice-versa). It pursues differentiation and cost simultaneously. Ex: Cirque – adult vs children
    • 8. Value Innovation
      Costs
      Value innovation is created when the organization’s strategy results to a favorable effect to both its cost and its value proposition for its customers.
      Cost savings are made by eliminating and reducing the factors an industry competes on.
      Buyer value is lifted by raising and creating elements the industry has never offered.
      Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates.
      Eliminate
      Reduce
      Value
      Innovation
      Raise
      Create
      Buyer Value
    • 9. Four Actions Framework-how to create new value curve
      Reduce
      Factors that should be reduced well below the industry’s standard
      New
      Value
      Curve
      Create
      Eliminate
      Factors that should be created, which the industry has never offered
      Elimination of the animals in the circus
      Raise
      Factors that should be raised well above the industry’s standards
    • 10. STRATEGY CANVASS
      The strategy canvas is the central diagnostic and action framework for building a compelling blue ocean strategy. The horizontal axis captures the range of factors that the industry competes on and invests in, and the vertical axis captures the offering level that buyers receive across all these key competing factors.
      Objectives:
      Captures the current state of play
      Gears an organization’s focus from customers to non-customers
    • 11. ERRC GRID cirque du soleil
      ERRC GRID Pampanga’s Best TOCINO
      Kapampangan market only
    • 12. Minimizing Risks and Maximizing Opportunities in Formulating and Executing Blue Ocean Strategy
      Formulation Principles
      Formulation Risks
      Search Risk
      Reconstruct market boundaries
      Planning Risk
      Focus on the big picture, not the numbers
      Scale Risk
      Reach beyond existing demand
      Get the strategic sequence right
      Business Model Risk
      Execution Principles
      Execution Risks
      Organizational Risk
      Overcome key organizational hurdles
      Build execution into strategy
      Management Risk
    • 13. Is BLUE OCEAN STRATEGY NEW?
      Although the term blue oceans is new, their existence is not. They are a feature of business life, past and present. Look back one hundred years and ask yourself, How many of today's industries were then unknown? The answer: Many industries as basic as automobiles, music recording, aviation, petrochemicals, health care, and management consulting were unheard of or had just begun to emerge at the time. Now turn the clock back only thirty years. Again, a plethora of multibillion-dollar industries jumps out - mutual funds, cell phones, gas-fired electricity plants, biotechnology, discount retail, express delivery, minivans, snowboards, coffee bars, and home videos to name a few. Just three decades ago, none of these industries existed in a meaningful way.
    • 14. How durable is the advantage associated with a blue ocean strategy and what is the process for defending it?
      Creating blue oceans is not a static achievement but a dynamic process. Once a company creates a blue ocean and its powerful performance consequences are known, sooner or later imitators appear on the horizon. However, a blue ocean strategy brings with it considerable barriers to imitation. Some of these are cognitive, and others are operational.
      The first barrier is often cognitive. Competitors are often blocked from imitating because of brand image conflicts, or the blue ocean strategy just does not fit conventional strategic logic. For many years CNN, for example, was ridiculed by the industry as chicken noodle news by established players. The second barrier is organizational. Because imitation often requires companies to make substantial changes to their existing business practices, politics often kick in, delaying for years a company's commitment to imitate a blue ocean strategy. The third level includes the economic forces of blue oceans. The high volume generated by a value innovation leads to rapid cost advantages, placing potential imitators at an ongoing cost disadvantage.
      By heightening these barriers to imitation, companies can defend the blue oceans they created for some time. However, it should be noted that creating a blue ocean is not a static strategy process, but a dynamic one.
      By: Authors - Kim & Mauborgne
    • 15. References
      www.blueoceanstrategy.com
      Some Images were copied from the website of Blue Ocean Strategy
      File video of Cirque du Soleil is from Youtube
      FAQ’s are from the authors

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