2. • Porter’s Model
• Red vs Blue Ocean
• Value Innovation
• Tools of Blue Ocean

4. • The known market space which contains all the
industries in existence today
• Demand are defined and accepted, and the
compe99ve rules of the game are known
• 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 commodi9es or niche, and cuBhroat
compe99on turns the red ocean bloody

5. • Denote all the industries not in existence today – the
unknown market space, untainted by compe99on
• Demand is created rather than fought over. There is
ample opportunity for growth that is both profitable
and rapid.
• Compe99on is irrelevant because the rules of the game
are wai9ng to be set.
• An analogy to describe the wider, deeper poten9al of
market space that is not yet explored

6. • The corner-stone of Blue Ocean Strategy
• 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.

7. • The Four Ac9ons framework
– Eliminate
– Reduce
– Raise
– Create Grid
• The Strategy Canvas

8. Reduce Raise
Which factors should Which factors should
be reduced well be offered more well
below the industry’s above the industry’s
standard? standard?
Eliminate Create
Which of the factors Which factors should
that the industry be included that the
takes for granted industry has never
should be eliminated? New offered?
Value
Curve

9. Eliminate Raise
Reduce Create

10. Eliminate Raise
• Sea9ng class • Travel packages
• Dedicated seat • New
• Free meals interna9onal
• Lounge des9na9ons
• Meals variety
Reduce Create
• Ticket • Online facility
• Price (Web check‐in,
• Wai9ng 9me 9cke9ng)
• Air bridge • Special services

12. 10
9
8
7
6
5 Average Airines
Car
4
AirAsia
3
2
1
0
Price Speed Meals variety Sea9ng class Lounge New
choices des9na9on

13. 10
9 New factors
offered to
8
the current
7 market
6
5
Average Airines
4 Car
3 AirAsia
2
1
0
Price Speed Meals Sea9ng Lounge New Online Special
variety class des9na9on facility services
choices

14. Red Blue
Industry Focuses on rivals within its Looks across alterna9ve
industry industries
Strategic group Focuses on compe99ve posi9on Looks across strategic groups
within strategic group within industry
Buyer group Focuses on beBer serving the Redefines the industry buyer
buyer group group
Scope of Focuses on maximizing the value Looks across to complementary
product/ service of product and service offerings product and service offerings
offering within the bounds of its industry
Func9onal Focuses on improving price Rethinks the func9onal‐
emo9onal performance within the emo9onal orienta9on of its
orienta9on func9onal‐emo9onal orienta9on industry
of its industry
Time Focuses on adap9ng to external Par9cipates in shaping external
trends as they occur trends over 9me

15. • In group of 4 people, please analyze the industry you
have chosen to explore the four ac9on framework.
• Use as much references (Internet, magazine, books) to
iden9fy factors:
– Eliminate
– Reduce
– Raise
– Create