Online shopping allowed stores to reduce their cost of acquiring customers and serving them and in return they were able to reduce their prices online and provide fast and convenient way for customers to buy large selection on products. All this is driven by the online sales and promotion technology and business models.
Value Innovation, the simultaneous pursuit of differentiation and low cost, is the cornerstone of blue ocean strategy. Value innovation focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price and cost is aligned. In the blue ocean strategy methodology, the Four Actions framework and ERRC Grid assist managers in breaking the value-cost tradeoff by answering the following questions: What factors can be eliminated that the industry has taken for granted? What factors can be reduced well below the industry standard? What factors can be raised well above the industry standard? What factors can be created that the industry has never offered?create a leap in buyer value at a lower cost.
How attractive is your industry depends on many factors but it doesn’t matter so much …It is about how you see it. Some companies compete while other create Some of the companies who create succeed while other fail …Today we are here to discuss how companies can create rather than compete and how they can be successful in applying the blue ocean strategy
is not necessarily a key determinant of blue ocean strategy
With segmentation, companies look for differences among customers and try to maximize market share in existing markets by catering to customers’ differing needs.•BOS is about creating and capturing new demand through desegmentation. This is achieved by focusing on the commonalities valued by the mass of target buyers.
Focus on non-customers
We study at MBA strategy not execution
Transcript of "What Color is your Business Strategy?"
What Color is your Business Strategy?Iyad Mourtada
BLUEOCEANSTRATEGYRenée Mauborgne W. Chan KimHarvard Business School Press
Red Ocean StrategyCompete in existing market space.Beat the competition.Exploit existing demand.Make the value-cost trade-off.Align the whole system of a firm’sactivities with its choice ofdifferentiation or low cost.
Blue Ocean StrategyCreate uncontested market space.Make the competition irrelevant.Create and capture new demand.Break the value-cost trade-off.Align the whole system of a firm’sactivities in pursuit ofdifferentiation and low cost.
Four Steps of Visualizing Strategy1. Visual Awakening2. Visual Exploration3. Visual Strategy Fair4. Visual Communication
Buyer utility Is there exceptional buyerutility in your business idea?No-- RethinkYesSequence of Blue Ocean StrategyPrice Is your price easily accessibleto the mass of buyers?Cost Can you attain your cost targetto profit at your strategic price?Adoption What are the adoption hurdles inactualizing your business idea?Are you addressing them up front?No-- RethinkYesNo-- RethinkYesNo-- RethinkYes
A blue ocean strategic move is achieved bydeveloping and aligning the three strategypropositions : Value Proposition Profit proposition People proposition
Integrate Online, Mobile, and Social MediaChannels with your existing retail channelsto create value
Dont just build a mobile app.Build a business model around