How to make your competitors irrelevant by adopting a Blue Oceans Strategy

1. BLUE OCEANS STRATEGY
Concepts and Ideas
By John IBEBUNJO

2. • Lead Consultant/ Principal; TRG & DEV
Int’l Associates Ltd – a consultancy firm
that exists to bridge the knowing -doing
– gap in client organizations.
• Professional: OD Consultant & Trainer/
Facilitator
• SHRM (Certified member)
• Consultant: HCD, ODP, Change Manager,
Program Manager, Strategy & Planning
Expert and Monitoring & Evaluation
Consultant
ABOUT JOHN IBEBUNJO B.TECH., MSC., MBA (IN VIEW)
• Project Lead: Federal Govt. projects,
State-wide audit and verification;
monitoring & evaluation programs in
Nigeria.
• Passion: Helping ORG. & Individuals
develop and implement STRATEGIC PLANS
& Facilitating TRAINING.
• Convener: Periodic Training Programs in
Abuja.
• Experience: 18+ years

3. INTRODUCTIONS
• Your Name
• Your Professional Background
• Your Role in your org
• Something personal about you
• Something you did recently that you are proud of
• Your Hopes and Aspirations

4. RULES OF ENGAGEMENT
• Participate to the best of my ability
• Be mindful of my use of air-time
• Be authentic in my sharing
• Be present in mind and body
• Respect other views, even if I disagree
• Silence all phones
• ______________________________
• ______________________________

5. SESSION LEARNING GOALS
• Introduction to Blue Oceans Strategy
• Understanding when your Organization needs Blue Ocean
Strategy
• Understanding how to break away from the Red Ocean
• Defining the central features of Blue Ocean Strategy
• Engaging Blue Ocean Thinking, Shifting and Leadership

6. 7
WHAT IS BLUE OCEAN! RED OCEAN!
RED OCEAN FOCUSES ON
KNOWN MARKET SPACE
BLUE OCEAN FOCUSES ON
UNKNOWN MARKET SPACE

7. RED OCEAN DEFINED
Industry boundaries are defined and accepted,
Competitive rules of the game are known.
Companies try to outperform their rivals to grab a greater share
of existing demand.
As the market space gets crowded, prospects for profits and
growth are reduced.
Products become commodities, and cutthroat competition turns
the red ocean bloody.

8. BLUE OCEAN DEFINED
Blue oceans are defined by untapped market space, demand
creation, and the opportunity for highly profitable growth.
Blue oceans are created well beyond existing industry boundaries.
Blue oceans are created from within red oceans by expanding
existing industry boundaries, e.g. UBER.
Blue oceans, competition is irrelevant because the rules of the
game are waiting to be set.

10. 8
BLUE OCEANVS RED OCEAN
Red Ocean Strategy Blue Ocean Strategy
Compete in existing market Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off Break the value-cost trade-offs
Align the whole system of a firm’s activities
with its strategic choice of differentiation or
low cost
Align the whole system of a firm’s activities
in pursuit of differentiation and low cost.
(e.g. 5 star accommodation for 3 star price)

11. WHY BLUE OCEAN?
RED OCEAN success is attained by how well you
can swim to out-compete your rivals.
Forces of SUPPLY and DEMAND playing out.
(Supply Demand)
Organizations need to go beyond “competing”
To Seize new profit and growth opportunities, they
have to create blue oceans.

12. MILITARY SENSE OF STRATEGY?
Strategy is about confronting an
opponent and fighting over a
given piece of land that is both
limited and constant

13. BLUE OCEAN STRATEGY?
BLUE OCEAN Strategy is defined as how
to succeed in business/ career/ life by
creating instead of competing.
BLUE OCEAN Strategy is about
innovative creations leveraging on
opportunities.
BLUE OCEAN Strategy creates a different
approach and competes by creating a new
market.

14. BLUE OCEAN INNOVATIONS
DISRUPTIVE CREATIONS; Requires changing an
existing product into a brand new product. e.g. Uber
NON-DISRUPTIVE CREATIONS; Requires
creating a new opportunity from an old/ existing
product -e.g. the filling station that owns a restaurant,
becoming a famous restaurant that has a filling station.

15. OPTIONSTO LAUNCH A BLUE OCEAN
STRATEGY
Launching a completely new industry, like eBay did it
with online auctions …
Create a Blue Ocean inside of a Red Ocean … when a
venture enlarge the borders of an existing industry…
more common approach… easier …(Cirque du
Soleil).

16. HOWTO USE BLUE OCEAN STRATEGY
(METHODOLOGY)
Understand Blue Ocean Strategy principle
Define the competition’s factors
Analyze the curve
Design your own curve; reduce, delete, increase, create
Does it make sense for the customer

17. BLUE OCEAN SHIFT
The concept of Blue Ocean Shift answers the
question; How do we shift ourselves our teams
and our organizations from competing to
creating and from cut-throat market to wide
open new market? E.g. Facebook, Uber,
Amazon etc.

18. BLUE OCEAN SHIFT
Value for the customer
Value
Innovation
Cost for the Venture

19. BLUE OCEAN SHIFT CONCEPT
Create new markets and leave the competition.
Stop making competing your number one
priority, make creating your number one priority
Shift your organization from competing in cut-
throat arena to creating new opportunities in the
wide open space without limiting boundaries. E.g.
(5-star comfort, 3-star price)

20. 7
BLUE OCEANS SHIFT
“FIVE STEPSTO SUCCESS”
Choose the right place to start and build the right team.
Get super clear on the current state of play in your industry.
Discover hidden pain points that limits the size of your
industry and discover non-customers.
Rebuild market boundaries systematically.
Conduct rapid market tests, finalizing and launching your
blue ocean move.

21. 7
HOWTO CREATE BLUE OCEAN
STRATEGY
Successful Blue Ocean shifts are purely hinged and
analyzed based on the strategic move made by the
company?
A strategic move is the set of managerial actions
and decisions involved in making a major market-
creating business offering.
What is your organization’s Strategic Move?

22. 8
THE SIX PRINCIPLES APPROACHTO
BLUE OCEAN STRATEGY (BOS)
Formulation Principles
1. Reconstruct market boundaries
2. Focus on the big picture, not the numbers
3. Reach beyond existing demand
4. Get the strategic sequence right
Evaluation principles
5. Overcome key organizational hurdles
6. Build execution into strategy

23. 8
THE SIX PRINCIPLES APPROACH –
REDUCE RISK
Formulation Principles
1. Reconstruct market boundaries Search risk
2. Focus on the big picture, not the numbers Planning risk
3. Reach beyond existing demand Scale risk
4. Get the strategic sequence right Business model risk
Evaluation principles
5. Overcome key organizational hurdles Organizational risk
6. Build execution into strategy Management risk

24. APPLYING (BOS)TO AN EXISTING
COMPANY
Strategy : Result :
Quality
War Price,
Red Ocean
1 2 3 4 5 6
High
Low
Competitive Factors :
Those on which the quality of the product / service is built on
Search for quality in all All the companies
the competitive factors develop the same factors

25. BLUE OCEAN STRATEGY Breaks the trade--‐off between differentiation
and low cost and creates a new value curve

26. 9
FOUR ACTION FRAMEWORK OF BOS
• The four actions framework offers a technique that breaks
the trade-off between differentiation and low cost and intend
to create a new value curve.
• It answers four key questions:
• 1. What industry takes for granted and needs to be eliminated;
• 2. What factors need to be reduced below industry standards;
• 3. What factors need to be raised above industry standards;
• 4. What should be created that the industry has never offered.

27. 3 CHARACTERISTICS OF A GOOD
STRATEGY
1. FOCUS
2. DIVERGENCE
3. COMPELLINGTAGLINE

28. FINAL WORDS ON BOS
The real objective of BOS is to act on all four to create a new value curve.
• By driving companies to fill in the grid with the actions of eliminating,
reducing, raising, and creating, the grid provides four immediate benefits:
1. It pushes them to simultaneously pursue differentiation and low costs;
2. Identifies companies who are only raising and creating thereby raising
costs;
3. Makes it easier for managers to understand and comply;
4. Drives companies to scrutinize every factor the industry competes on.

29. QUESTIONTIME

30. THANKYOU