Blue Ocean Strategy

Slide 1: Blue Ocean Strategy 1 www.study Marketing.org

Slide 2: Contents 1. Blue Ocean Vs. Red Ocean Strategy 2. Blue Ocean Strategy Tools 3. Strategy Canvas and Four Action Framework 4. Six Principles of Blue Ocean Strategy 5. Formulating Blue Ocean Strategy 6. Executing Blue Ocean Strategy If you find this presentation useful, please consider telling others about our site (www.studyMarketing.org) 2 www.study Marketing.org

Slide 3: You can download this presentation at: www.studyMarketing.org Please visit www.studyMarketing.org for more presentations on strategy, marketing, branding, and innovation 3 www.study Marketing.org

Slide 4: Blue Ocean Vs. Red Ocean Strategy 4 www.study Marketing.org

Slide 5: Blue Ocean vs. Red Ocean Strategy Blue Ocean Strategy Red Ocean Strategy • • Create uncontested Compete in existing market space market space • • Make the competition Beat the competition irrelevant • • Create and capture new Exploit existing demand demand 5 www.study Marketing.org

Slide 6: Blue Ocean vs. Red Ocean Strategy Blue Ocean Strategy Red Ocean Strategy • • Break the value- cost Make the value-cost trade off trade off • • Align the whole system Align the whole system of a firm’s activities with of a firm’s activities with its strategic choice of its strategic choice of differentiation and low differentiation or low cost cost 6 www.study Marketing.org

Slide 7: Blue Ocean Strategy Tools • A diagnostic tool for building a Strategy compelling blue ocean strategy Canvas • It captures the current state of play in the known market space • Allow you to understand : • where the competition is currently investing • the factors the industry currently competes on in product, service and delivery • what customers receive from existing competitive offerings on the market 7 www.study Marketing.org

Slide 8: Four Action Framework Raise Eliminate Reduce Create 8 www.study Marketing.org

Slide 9: Four Action Framework Which of the factors that the industry Eliminate takes for granted should be eliminated? Which factors should be reduced well Reduce below the industry’s standard? Which factors should be raised well Raise above the industry’s standard? Which factors should be created that the Create industry has never offered? 9 www.study Marketing.org

Slide 10: Four Action Framework The Case of Cirque du Soleil (A Circus Company) Reduce Eliminate • • Star performers Fun and humor • • Animal shows Thrill and danger • Aisle concession sales • Multiple show arenas Raise Create • Theme • Unique venue • Refined environment • Multiple productions • Artistic music and dance 10 www.study Marketing.org

Slide 11: Six Principles of Blue Ocean Strategy Formulation Principles Execution Principles 1. Reconstruct market 1. Overcome key boundaries organizational 2. Focus on the big picture, hurdles not the numbers 2. Build execution into 3. Reach beyond existing strategy demand 4. Get the strategic sequence right 11 www.study Marketing.org

Slide 12: Formulating Blue Ocean Strategy 12 www.study Marketing.org

Slide 13: 1. Reconstruct Market Boundaries Blue Ocean Strategy Head-to-Head Strategy • • Focus on rivals within Looks across alternative industry industries • • Focuses on competitive Looks across strategic position within strategic group within industry • group Redefines the industry • Focuses on better buyer group serving the buyer group 13 www.study Marketing.org

Slide 14: 1. Reconstruct Market Boundaries Blue Ocean Strategy Head-to-Head Strategy • • Looks across to Focuses on maximizing complementary product the value of product or and service offerings service offerings within • Participates in shaping the bounds of its industry • external trends over time Focuses on adapting to external trends as they occur 14 www.study Marketing.org

Slide 15: 2. Focus on the Big Picture, not the Numbers Focus on the The Four Steps of Big Picture, not Picture Visualizing Strategy the Numbers • Visual Awakening • Visual Exploration • Visual Strategy Fair • Visual Communication 15 www.study Marketing.org

Slide 16: 2. Focus on the Big Picture, not the Numbers • Compare your business with your Visual competitors’ by drawing your “as is” Awakening strategy canvas • See where your strategy needs to change 16 www.study Marketing.org

Slide 17: 2. Focus on the Big Picture, not the Numbers • Go to the field to explore the six Visual paths to creating blue oceans Exploration • Observe the distinctive advantages of alternative products and services • See which factors you should eliminate, create, or change 17 www.study Marketing.org

Slide 18: 2. Focus on the Big Picture, not the Numbers • Draw your “to be” strategy canvas Visual based on insights from field Strategy observations Fair • Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers • Use feedback to build the best “to be” future strategy 18 www.study Marketing.org

Slide 19: 2. Focus on the Big Picture, not the Numbers • Distribute your before-and-after strategic profiles on one page for Visual Communication easy comparison • Support only those projects and operational moves that allow your company to close the gap to actualize the new strategy 19 www.study Marketing.org

Slide 20: 3. Reach Beyond Existing Demand • First tier: “Soon to be” non- customers who are the edge of your market, waiting to jump ship The Three • Tier of Non- Second tier: “Refusing” non- customers who consciously customers choose against your market • Third tier: “Unexplored” non- customers who are in markets distant from yours 20 www.study Marketing.org

Slide 21: 4. Get The Strategic Sequence Right The Sequence of Blue Ocean Strategy Price Buyer utility Is your price easily Is there exceptional buyer accessible to the mass of utility in your business idea? buyers? Adoption Cost What are the adoption Can you attain your cost hurdles in actualizing your target to profit at your business idea? strategic price? A commercially viable blue ocean idea 21 www.study Marketing.org

Slide 22: Executing Blue Ocean Strategy 22 www.study Marketing.org

Slide 23: 5. Overcome Key Organizational Hurdles Resource Cognitive Hurdle Hurdle Overcome Key Organizational Hurdles Political Motivational Hurdle Hurdle 23 www.study Marketing.org

Slide 24: 5. Overcome Key Organizational Hurdles • Ride the “Electric Sewer” Cognitive Hurdle • Meet with Disgruntled Customers (status quo) • Redistribute resources to your hot spots Resource • Hurdle Redirect resources from your cold spots • Engage in horse trading 24 www.study Marketing.org

Slide 25: 5. Overcome Key Organizational Hurdles • Zoom in on Kingpins (key influencers) Motivational • Place kingpins on a fishbowl Hurdle • Atomize to get the organization to change itself • Secure a consigliere on your top Political management team Hurdle • Leverage your angels and silence your devils 25 www.study Marketing.org

Slide 26: 5. Build Execution Into Strategy Fair Process of Strategy Strategy Formulation Process Fair Process – Engagement, Explanation, Expectation clarity Attitudes Trust and Commitment – “I feel my opinion counts” Behavior Voluntary Cooperation – “I’ll go beyond the call of duty” Strategy Execution Exceeds Expectation – self initiated 26 www.study Marketing.org

Slide 27: Source of Reference • W. Chan Kim (Author) and Renée Mauborgne (Author), Blue Ocean Strategy, HBS Publication 27 www.study Marketing.org

Slide 28: End of Material 28 www.study Marketing.org