Strategy Canvas High Low Wine range Use of Above-the-line Vineyard prestige PriceFigure 2-1 enological marketing Aging and legacy Wine terminology quality complexity
The strategy canvas of Cirque du Soleil High Ringling Bros. & Barnum & Bailey Cirque du Soleil Smaller Regional Circuses Low Animal Multiple Thrills Theme MultiplePrice show productions shows & danger Aisle arenas Fun Artistic Unique Refined music Star concessions & venue watching & dance Performers humor enjoinment
Four Actions Framework: Key to Value Curve Raise The key to discovering a new value curve lies What factors should be raised well beyond in answering the industry four basic questions standard? Eliminate Create What factors should What factors should be be eliminated that created that the the industry has taken industry has never for granted? offered? Reduce What factors should be reduced well below the industry standard? 8
BOS Logic: Reconstruct market boundaries Boundaries of Head-to-Head Creating Competition Competition New Market Space Focuses on rivals within its Looks across alternative Industry industries industry Focuses on competitive position Looks across strategic groups Strategic Group within its industry within strategic group Focuses on better serving the Redefines the buyer group of the Buyer Group industry buyer group Focuses on maximizing the value Looks across to complementaryScope of Product and product and service offerings that of product and service offerings Service Offerings go beyond the bounds of its within the bounds of its industry industry Focuses on improving price- Rethinks the functional-emotionalFunctional-emotional performance with the functional- orientation of its industry Orientation of an emotional orientation of this Industry industry Focuses on adapting to external Participation in shaping external Time/Trends trends over time trends as they occur
Four Steps of Visualizing Strategy1. Visual 2. Visual 3. Visual Strategy 4. Visual Awakening Exploration Fair Communication•Compare your •Go into the field to •Draw your “to be” •Distribute yourbusiness with your explore the six strategy canvas based before-and-aftercompetitors’ by paths to creating on insights from field strategic profiles ondrawing your “as blue oceans. observations. one page for easyis” strategy canvas. comparison. •Observe the •Get feedback on•See where your distinctive alternative strategy •Support only thosestrategy needs to advantages of canvases from projects andchange alternative products customers, operational moves and services. competitors’ that allow your customers, and company to close the •See which factors noncustomers. gaps to actualize the you should new strategy. eliminate, create, or •Use feedback to build change. the best “to be” future strategy.
Three Tiers of CustomersThere is a universe of noncustomerswhich can be turned into customersto offer a big blue ocean market. Third Tier 1st tier: “Soon-to-be” noncustomers who are on the edge of your market Second Tier 2nd tier: “Refusing” First noncustomers who consciously Tier choose against your market Your 3rd tier: “Unexplored” Market noncustomers who are in markets distant from yours
Buyer utilityIs there exceptional buyer utility in yourbusiness idea? No Rethink Yes PriceIs your price easily accessible to the BOS Logic:mass of buyers?Yes No Rethink Get the Cost strategicCan you attain your cost target to profitat your strategic price? No Rethink sequence Yes Adoption rightWhat are the adoption hurdles inactualizing your business idea? Areyou addressing them up front? No Rethink Yes A Commercially Viable Blue Ocean Idea
Buyer Utility Map The Six Stages of the Buyer Experience Cycle 2.Delivery 4.Supplements 6.Disposal 1.Purchase 3.Use 5.Maintenance Customer ProductivityThe Six Utility Levers Simplicity Convenience Risk Fun and Image Environmental friendliness
. Buyer Experience Cycle Purchase Delivery Use Supplements Maintenance DisposalHow long does How long does Does the product Do you need Does the Does use ofit take to find it take to get require training or other products product the productthe product the product expert assistance? and services to require create wasteyou need? delivered? make this product external items? Is the product easy work? maintenance?Is the place of How difficult is to store when not in How easy is itpurchase it to unpack use? If so, how costly How easy is it to dispose ofattractive and and install the are they? to maintain the product? How effective areaccessible? new product? and upgrade the product’s How much time Are there the product?How secure is Do buyers features and do they take? legal orthe transaction have to functions? How costly is environmenta How easy areenvironment? arrange maintenance? l issues in Does the product or they to obtain? delivery disposing ofHow rapidly service deliver far themselves? If the productcan you make more power or yes, how safely?a purchase? options than costly and required by the How costly is difficult is this? average user? Is in disposal? overcharged with bells and whistles?
Uncovering Blocks to Buyer Utility Purchase Delivery Use Supple- Mainte- Disposal ments nanceCustomer Productivity: In which stage are the biggest blocks to customer productivity?Simplicity: In which stages are the biggest blocks to simplicity?Convenience: In which stage are the biggest blocks to convenience?Risk: In which stage are the biggest blocks to reducing risks?Fun and Image: In which stage are the biggest blocks to fun and image?Environmental In which stage are the biggest blocks to environmentalFriendliness: friendliness?
Profit Model of Blue Ocean Strategy The Strategic Price The profit model of blue ocean strategy shows how value innovation The Target Profit typically maximizes profit by using the three levers of strategic price, target cost, and pricing innovation. The Target CostStreamlining and Cost Partnering Innovations Pricing Innovation