The 7 Ocean Strategies


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The 7 Ocean Strategies

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The 7 Ocean Strategies

  1. 1. * “Running an Agile Fortune 500 Company” Aditya Yadav,
  2. 2. * A Typical Global Company * Fortune 500/1000 * 200 Divisions * 40 Countries * 25000 Employees *
  3. 3. * @ Acme Inc.
  4. 4. * Original Question “Our business has more or less stagnated. Should we be looking at a Blue Ocean Strategy?” * The Correct Question - “Blue Ocean is about innovation and no amount of managing yourself through it works than basically innovating. That’s one reason nobody on the planet uses the Blue Ocean Strategy framework. Nobody!. We need to look at a more comprehensive picture.” *
  5. 5. * And The Philosophy Behind The Answer
  6. 6. * Red oceans represent all the industries in existence today – the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of product or service demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or niche, and cutthroat competition turns the ocean bloody; hence, the term red oceans. *
  7. 7. * Blue oceans, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. *
  8. 8. * * * * * * * * Blue ocean strategy makes sense in a world where supply exceeds demand [Overcapacity] The cornerstone of Blue Ocean Strategy is 'Value Innovation'. A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market. The authors criticize Michael Porter's idea that successful businesses are either lowcost providers or niche-players. Instead, they propose finding value that crosses conventional market segmentation and offering value and lower cost. A Red Ocean Strategy does not guarantee success Competitive Strategy is the route to nowhere Firms need to create "Sensational Strategies". Just like Blue Ocean Strategy, a Sensational Strategy is about "playing a different game“ The aim of companies is to create temporary monopolies The aim of companies is to create blue oceans, that will eventually turn red. *
  9. 9. * For blue ocean strategy formulation: * * * * * * * * * * * * * The Strategy Canvas The initial litmus test for BOS: focus, divergence, compelling tagline The Four Actions Framework Eliminate-Reduce-Raise-Create Grid The Six Paths Framework Buyer Utility Map Buyer Experience Cycle Price Corridor of the Mass model Four Steps of Visualizing Strategy Process Pioneer-Migrator-Settler Map Three Tiers of Noncustomers Framework The Sequence of Blue Ocean Strategy For blue ocean strategy execution: * * Tipping Point Leadership Four Key Organizational Hurdles: * * * * * Riding the "Electric Sewer" to break the Cognitive Hurdle Redirecting from cold spots to hot spots and horse trading to overcome the Resource Hurdle Placing Kingpins in a Fishbowl and atomize the change to jump over the Motivational Hurdle Leverage your angels and consigliere to overcome the Political Hurdle 3 E principles of Fair Process: engagement, explanation, clarity of expectations *
  10. 10. 1. 2. 3. 4. 5. 6. 7. Red Ocean – (Everything that exists today) Blue Ocean – (Create the Future) Green Ocean – (Early exploiting someone else’s Blue Ocean) Gold Ocean – (Reinvent or Disrupt a Red Ocean) Rainbow Ocean – (Integrate/Merge/Simplify Multiple Industries or Oceans) Orange Ocean – (Mirror Dimensional Ocean, alternatives, clones, substitutes & complements) Europa Ocean – (Innovate for dormant possibilities of a future Blue Ocean) *
  11. 11. * Wonder why nobody bothers about the Legacy – Blue Ocean Strategy? * Because Blue Oceans are NOT about Strategy as much as they are about Innovation * And Blue Ocean creating Innovation is largely Bottom Up compared to a Top Down Legacy Blue Ocean Strategy * You don’t need a Strategy Framework for creating a Blue Ocean * You need Learning, Change, Invention and Delivery of Innovation… *
  12. 12. Aditya!!! *