blue oceans & Red Ocean Strategy

1. SURFING IN BLUE
OCEANS!
Blue Ocean Strategy
Puja Dutta
Punam Bhattacharjee
Sahin Sengupta

3. A WAKE UP CALL!!!!
• Between 1975 and 2015, 60 percent of Fortune 500 companies were
replaced on the list.
• Markets are opening
• Competitors are agile
• Competitors can pick and choose where to compete
• In 10 years time will your market place still be populated by the same
dominant industry players?
• Industries and companies continuously rise and fall.
• Therefore, there are no permanently great industries or companies
• Instead, there are strategic moves that propel companies and
continuously create new industries.

4. WHICH COMPANY IS THIS?

6. • 137 year old company, founded in 1865
• leading mobile manufacturer with USD 31 Billion in sales in 130 countries
• Has practiced renewal for a lifetime, starting out making paper, then
boots, rain coats, hunting rifles, consumer electronics and now mobile
phones.
• Even When they saw failure in recent times with Windows – Android war,
they came back huge with recent Nokia 6.
• Nokia 6, their first pure android smartphone has seen a sale of 1.6 Million
phones in 60 seconds in China.

7. • Between 1991-1993, $16B in losses.
• In 1993 first non-IT CEO switches co. focus from ‘technology
driven’ to ‘customer solutions driven’, creating new “Global
Services Group”.
• By 2001 the Global Services Group represents $35B of $86B in total
sales.

10. RED OCEAN VS BLUE OCEAN

11. JUMPING TO BLUE OCEAN…

12. WHEN SHOULD A COMPANY CONSIDER
JUMPING?
Highly competitive industry
Few differentiators
Low entry barriers
Downward margin pressures
Limited opportunity for new customers
Struggling to compete
Leadership position stagnant
Forced into acquisition model to sustain growth expectations.

13. UNDERSTANDING BOS…
Value Innovation
• Value Innovation is the corner stone of Blue Ocean Strategy. It is about creating a leap in
value for buyers and company by aligning innovation with utility, cost and price.
• Value without innovation tends to focus on value creation on incremental scale.
• Innovation without value tends to be technology driven, market pioneering or futuristic.
Simultaneous Pursuit of Differentiation and Low Cost
• Value innovation is created in the region where a company’s actions favorably affect
both its cost structure and its value proposition to buyers.
• 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 supplier value generates.

14. Cost
Reduction
Value
Increase
• Increase of value implies
increase of cost
• Reduction of cost implies
decrease in value
Viewing the Cost / Value Relationship as Inverse…

15. Cost
Reduction
Value
Increase
• Both cost reduction
and value increase are
possible…
VIEWING THE COST / VALUE
RELATIONSHIP AS DIRECT…

16. THE FOUR STEPS OF VALUE
INNOVATION
VISUAL AWAKENING
• Compare your “as is” strategy canvas with your ‘competitors’
• See where your strategy needs to change
VISUAL EXPLORATION
• Go into the field to see how people use or not use your products
• Discover adoption hurdles and advantages of alternative offerings
• Review both customers and non-customers

17. THE FOUR STEPS OF VALUE
INNOVATION...
VISUAL STRATEGY FAIR
• Draw several “to be” strategy canvases based on field insights
• Get feedback form customers, lost customers, competitors’ customers and
non-customers to build best “to be” strategy.
VISUAL COMMUNICATION
• Distribute old and new strategic profiles
• Support only initiatives that meet new strategic needs

18. The Four Actions Framework
•The four actions framework offers a
technique that breaks the trade-off
between differentiation and low cost and
to create a new value curve.
It answers the four key questions..
•What industry takes for granted and
needs to be eliminated?
•What factors need to be reduced below
industry standards?
•What factors need to be raised above
industry standards?
•What should be created that the industry
has never offered?

19. •Reconstruct market boundaries
•Focus on the big picture, not the
numbers
•Reach beyond existing demand
•Get the strategic sequence right
Formulation
Principles
•Overcome key organisational
hurdles
•Build execution into strategy
Execution
Principles
SIX PRINCIPLES OF BOS

20. BLUE OCEAN STRATEGY IS ALL
ABOUT CUSTOMERS AND NON-
CUSTOMERS…

22. THE PATANJALI PHENOMENON…
Baba Ramdev-steered Patanjali is making a
direct headway into the kitchens and
bathrooms of the ‘aam’ Indian consumers!
From biscuits to facewashes, Patanjali has
rattled the marketplace in such a manner
that even families of renowned FMCG
companies are adopting Ramdev’s products.
Broadcast Audience Research Council, India
(BARC) reported that Patanjali became one
of the top three most advertised brands on
television in the fall of November 2015.
Question is, why and how this superfast
conquest?

23. THE PATANJALI PHENOMENON
(CONT)…
The controversial-yoga guru is not only among the highest advertisers on
television today, but by doubling up as brand ambassador for his enterprise,
he is escalating awareness for all Ayurvedic and Herbal product offerings
and further opening up the space.
The products of Patanjali, are selling at such a meteoric pace that analysts
are now projecting that its INR 20 billion ($307 million) revenues in 2015
could pose a threat to established, age-old Indian consumer brands such as
Dabur, Emami, Hindustan Unilever (HUL), Himalaya Drug Company and
Marico.
These FMCG titans such as Emami, are rebooting their category strategies
and investing in new products and making new acquisitions to reap in the
promise of the herbal age, pioneered by Patanjali.
The major reason for Patanjali’s success is its unique business model of a
single umbrella brand, a wide spread of categories, exclusive store network
and a close association of a personality. This is of course, backed by low
prices.

25. THE PATANJALI PHENOMENON
(CONT)…
The appeal of Ayurvedic products hyping on ‘purity’ and an inclination to
procure Indian brands.
Patanjali made the cut; it has consistently advertised its products hyping on
quality and ‘shuddhta’ (purity) thereby aspiring to dispel consumers’ doubts
on that score.
It has managed to keep its price points vividly low.
An illustration of aggressive advertising, it has advertised its honey as being
43% cheaper than Dabur honey for a 250 gm pack. Again, a 500g bottle of
Dabur honey is priced at INR 199; while a 500g bottle of Patanjali honey is
available for INR 135 (32% cheaper).
Patanjali has also steered clear of hard-hitting celebrity endorsements.
It is indeed the first time in grocery retail that standalone spaces are being
offered to an entire umbrella brand clubbed together.

26. THE DIFFERENCE IT MADE..

27. Thank You!