Dr Sam Ruturi Chapter 8 Blue Ocean Strategy

THE
Strategic Leadership and
Organisational Dynamics Lectures
Bindura University of Science & Technology
BUSE: Graduate Business School
MBA 512: Strategic Leadership and Organisational Dynamics Graduate Business School
Bindura University of Science and Education Leadership & Systems Thinking Perspective
MBSSA – C4SL © Dr Sam RUTURI 2017 samruturi@yahoo.com Cell 263- 0734 371

UZ - MBA 543 - MANAGING
CHANGE AND COMPLEXITY
© DR.
2
Job Challenge What I do for fun
Who I admire
Happiest moment
in my life
PRESENTER: Dr. Sam RUTURI
FETC, (Lon),AIBS,(SA);AIB,(SA); Dip. H.F (USA), Grad. Diploma IMM (SA); BBA.(SA) B. Com. (SA) B Phil. (SA);
MSc. (UK); MBA (NUST) ,MBA,(USA) PhD (USA), MCom, (SA). DBA (France) (Pending)
Director & Senior Lecturer: 1. Mortgage Banking School of Southern Africa
Part-Time Lecturer: 2. MBA-GSM; University of Zimbabwe
Part-Time Lecturer: 3. MBA-GSB; Chinhoyi University of Technology
Part-Time Lecturer 4. MBL-GBS; Bindura University of Science& Education
Consultant & Facilitator: 5. Strategy, Quality, Change and Housing Finance
Email address: samruturi@yahoo.com Cell; 0734 371 341 / 0712221348/ Tel.
Day I bought
my first house Tom
PETERS
Teaching people to
learn to act on what
they have learnt
LET ME INTRODUCE MYSELF…Dr Sam Ruturi
Play Golf
for Fun

ABOUT THE AUTHORS
THE BOOK HAS BEEN TRANSLATED INTO FORTY TWO LANGUAGES
Prof Renee
Mauborgne
Prof Chan
Kim

 To determine the motivation for Focus on Creating Blue
Ocean
 To determine the colour of your company Strategy
 To establish the strategic logic that allows Companies to
create uncontested space and make competition irrelevant
 To establish the facts and analytical frameworks that allow
companies to formulate and execute Blue Ocean Strategy
 To establish pathways Companies can use to move from
thought to action in actualizing Blue Ocean Strategy
LEARNING OBJECTIVES

 Why Focus on Creating Blue Ocean
 What colour is your Strategy?
Are you Red or Blue?
 Blue Ocean Strategy overview
o What is the strategic logic that allows Companies to create
uncontested space and make competition irrelevant?
 Blue Ocean Strategy Formulation and Execution
o What are the facts and analytical frameworks that allow companies to
formulate and execute Blue Ocean Strategy?
 Focus on the Future
o How can Companies (like yours) move from thought to action in
actualizing Blue Ocean Strategy?
Presentation Outline

The Rising Imperative of Creating BlueThe Rising Imperative of Creating Blue
OceansOceans
• Supply exceeds demandSupply exceeds demand
• Accelerated commoditization of productsAccelerated commoditization of products
and servicesand services
• Increasing price warsIncreasing price wars
• Shrinking profit marginsShrinking profit margins
• Brands are becoming more similarBrands are becoming more similar
> select based on price> select based on price
Why Focus on Blue Ocean

• Globalism has made many brands
become increasingly similar and more of a
commodity
• Technological improvement has caused
supply to outweigh demand
• It is now harder than ever to differentiate
among brands
The Rising Imperative ofThe Rising Imperative of
Creating Blue OceansCreating Blue Oceans

What Colour is Your Strategy?
Are you Red or Blue?

Managing
Costs
Asset
Utilisation
Future
Strategy
Corporate
Brand
New Brand
Development
Global
Research
Operational
Efficiency
Cycle Times Logistics
Growth 1
Innovation
Quality
Control
Creativity
Methods
How Much Time Do You Spend Doing
the Following Activities?

Productivity
Management
Creativity
Management
Quality Control
Creativity
Methods
Assets
Utilisation
New Brand
Development
Operational
Efficiency
Global
Research
Logistics Corporate Brand
Cycle Times Future Strategy
Managing
Costs
Growth /
Innovation
MBA 528 Transformational Leadership & Change Management Dr Sam Ruturi 2017
Graduate School of Management – University of Zimbabwe
MBSSA – C4SL © Dr Sam RUTURI 2017 samruturi@yahoo.com Cell 263- 0734 371 341

• What percentage of your time do you spend on the left
hand side and how much on the right hand side?
• It on the level of position one holds or where the
company is:-
- Left side is easy because this side is what we learn
about.
- Right hand side is not abstract

INNOVATION
Random Systematic
Ratreprenour Pattern
Trial & Error learn from the
future
Opportunities and risks come
together
Risk Minimization with
Opportunity Maximization
DNA/Culture Analytical Frameworks
Units of Experimentation
Subsystems Approach
Systems Strategic Alignment
Schumpeterian Innovation Blue Ocean Strategy
Theory &
Methodologies

What Makes An Innovation Succeed?
Researching the History of Blue Ocean Creations
•150 Blue Ocean Creations
•More than 30 industries
•Over 100 years (1880 – 2000)
Business Launch
Revenue Impact
Profit Impact

Blue Ocean Strategy
Translated Into 42 Languages
Strategy comes from the military
Strategy is about fighting over a fixed piece of land
when one army fights and wins that piece of land,
the other one looses
Red Ocean Strategy Blue Ocean Strategy
Red
Ocean
Strategy
Blue
Ocean
Strategy

Intensifying Competition Shrinking
Audiences
No of Competitors
Average No. of
Audiences per Show
3700
2700
1137
749

Revenue Breakdown of Typical
Orchestra
Source %age of Total Revenue
Live Performance < 60%
Royalties from recordings > 2%
Government Funds (Donations) (3% - 9%)
Private (11% - 40%)
MBA 543 Managing Change and Complexity Dr Sam Ruturi 2015

Unsustainable Cost Structure
HIGH
FIXED
COSTS
• Half of orchestras costs go to salaries and
superstar guest and conductors
- Minimum salaries in the Big 5 over
US$100k with 8 – 9 wider vacation for over
one hundred members
- Conductors earning over US$2m
Variable
Costs
On
The
Rise
• Higher marketing costs as orchestras
complete for shrinking audiences and
public and private funding

Strategic Canvas Traditional Orchestra Experience

RED OCEAN STRATEGY BLUE OCEAN STRATEGY
Represents all the industries in
existence today.
Represents all the industries not
in existence today.
Prospect for profits and growth are
reduced
There is opportunity for highly
profitable growth.
Market space is overcrowded. The market space is untapped,
creation of new terrain.
There is intense competition due
large number of players because
the rules of the game are known.
Competition is irrelevant
because the rules of the game
are yet to be define.
Products become commodities and
competition turns the Red Ocean
Bloody.
Products have a unique
personality, identity, & image
tailored to meet customer needs.
RED OCEAN Versus BLUE OCEAN STRATEGY

RED OCEAN VERSUS BLUE
OCEAN STRATEGY
Red Ocean Strategy Blue Ocean Strategy
Compete in Existing markets
Beat Competition
Exploiting Existing Demand
Make the Value Cost Trade Off
Align the Firm's Activities with
its Strategic Choice of
Differentiation or Low Cost
Create Uncontested market space
Make Competition Irrelevant
Create and Capture New Demand
Break the Value-Cost Trade Off
Align the Firm’s Activities in
Pursuit of Differentiation and Low
Cost.

THE PARADOX OF STRATEGY
86% 14%
62% 38%
39% 61%
Launchers in
Red Ocean
Launchers
For Creating
Blue Ocean
Business Launch
Total Revenue
Total Profits
The Profit and Growth Consequences of Creating a:

Average Revenue Per Company (%)
100%
61%Total Profits(%)
100%38%Total Revenue (%)
100%14%
Business Launchers on (%)
108No. of Companies Launched
TotalBlueRed
93
86%
62%
39%
100%
100%
15
2.53%
Average Profit Per Company (%) 100%4.07%
0.65%
0.42%
The Paradox of Strategy
THE IMPACT OF THE LAUNCHERS: RED OCEAN VS
BLUE OCEAN

The Paradox of Strategy
• In a study of 108 companies
– 86% of new ventures were line extensions or incremental
improvements to existing industries
– ONLY 14% were aimed at creating new markets or
strategies
• Line extensions provided 62% of total revenues but
ONLY 39% of TOTAL PROFITS
• In contrast, on the 14% invested in creating new
markets it delivered 38% of the total revenues BUT it
delivered 61% of TOTAL PROFITS!!!

Take Aways
Red ocean strategy is a market-sharing or
market-competing strategy, while Blue
ocean strategy is a market-creating
strategy.
As red oceans are becoming bloodier, we
need to create more blue oceans.
“The only way to beat the competition is
to stop trying to beat the competition!”

Four Guiding 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
Let’s look briefly at each principle.

Principle 1: Reconstruct Market Boundaries
• Path 1: Look across alternative industries
– NetJets as alternative to private jet or commercial
airlines
– Home Depot with expertise of contractors and
lower prices than hardware stores
• Path 2: Look Across Strategic Groups Within
Industries
– Curves, the Texas based Fitness center for women
• Path 3: Look Across the Chain of Buyers
– Novo Nordisk’s prefilled disposable insulin
injectorsMBA 528 Transformational Leadership & Change Management Dr Sam Ruturi 2017

Principle 1: Reconstruct Market
Boundaries (Cont.)
• Path 4: Look Across Complementary Product and Service
Offerings
– Nabi fiberglass buses (competing on lifecycle cost, not
purchase price)
• Path 5: Look Across Functional or Emotional Appeal to
Buyers
– Swatch transformed functionally driven budget watch
industry into an emotionally driven fashion statement
• Path 6: Look Across Time (finding actionable insights on
observable trends)
– iTunes leaping past pirated downloads

BOS Logic: Reconstruct market boundaries
Industry
Focuses on rivals within its
industry
Strategic Group
Focuses on competitive
position within strategic group
Buyer Group
Focuses on better serving the
buyer group
Scope of Product
and Service
Offerings
Focuses on maximizing the
value of product and service
offerings within the bounds of
its industry
Functional-
emotional
Orientation of an
Industry
Focuses on improving price-
performance with the
functional-emotional
orientation of this industry
Time/Trends
Focuses on adapting to
external trends as they occur
Looks across alternative
industries
Looks across strategic groups
within its industry
Redefines the buyer group of
the industry
Looks across to
complementary product and
service offerings that go
beyond the bounds of its
industry
Rethinks the functional-
emotional orientation of its
industry
Participation in shaping
external trends over time
Boundaries of
Competition
Head-to-Head
Competition
Creating
New Market Space

Four Steps of Visualizing
1. Visual
Awakening
2. Visual
Exploration
3. Visual
Strategy Fair
4. Visual
Communicatio
n
•Compare your
business with
your competitors’
by drawing your
“as is” canvas
•See where your
strategy needs to
change
•Go into the field to
explore the six
paths to creating
blue oceans
•Observe the
distinctive
advantages of
alternative
products and
services
•See which factors
you should
eliminate, create or
change
•Draw your “to be”
canvas based on
insights from field
observations
•Get feedback on
alternative strategy
canvases from
customers,
competitors’
customers, and non-
customers
•Use feedback to
build the best “to
be” future strategy
•Distribute your
before-and-after
strategic profiles on
one page for easy
comparison
•Support only those
projects and
operational moves
that allow your
company to close
gaps and actualize
the new strategy
Principle 2: Focus on the Big Picture, Not the
Numbers

Principle 3: Reach Beyond Existing Demand
• JCDecaux with it’s outdoor furniture
advertisements
Third Tier
Second Tier
First
Tier
Your
Market
The Three Tiers of NonconsumerThe Three Tiers of Nonconsumer
11stst
Tier:Tier: “Soon-to-be” noncustomers who are on the edge of your market, waiting to“Soon-to-be” noncustomers who are on the edge of your market, waiting to
jump ship.jump ship.
22ndnd
Tier:Tier: “Refusing” noncustomers who consciously choose against your market.“Refusing” noncustomers who consciously choose against your market.
3rd Tier:3rd Tier: “Unexplored” noncustomers who are in markets distant from yours.“Unexplored” noncustomers who are in markets distant from yours.

BOS Logic: Reach Beyond
Existing Demand
Core Customer Noncostumer
Soon-to-be-NC Refusing Customer

Three Tiers of Customers
1st
2nd
3rd
There is a universe ofThere is a universe of
noncustomers which can benoncustomers which can be
turned into customers to offerturned into customers to offer
a big blue ocean market.a big blue ocean market.
1st tier:1st tier: “Soon-to-be”“Soon-to-be”
noncustomers who are on thenoncustomers who are on the
edge of your marketedge of your market
2nd tier:2nd tier: “Refusing”“Refusing”
noncustomers whononcustomers who
consciously choose againstconsciously choose against
your marketyour market
3rd tier:3rd tier: “Unexplored”“Unexplored”
noncustomers who are innoncustomers who are in
markets distant from yoursmarkets distant from yours
3rd
Your
Market

• Three tiers of non-customers:Three tiers of non-customers:
– 1: buyers who purchase your industry offerings out of necessity; will1: buyers who purchase your industry offerings out of necessity; will
jump ship if given an opportunity.jump ship if given an opportunity.
– 2: buyers who purchase alternative offerings that serve the same2: buyers who purchase alternative offerings that serve the same
functionfunction
– 3: people who don’t consume even the alternatives to your offerings3: people who don’t consume even the alternatives to your offerings
• Non-customer demand is unlocked by providing newNon-customer demand is unlocked by providing new
buyer utilities, at a price that attracts a mass of buyers,buyer utilities, at a price that attracts a mass of buyers,
given target costs.given target costs.
• Buyers could be not only end-users, but also otherBuyers could be not only end-users, but also other
participants in a value chain (e.g. distributors)participants in a value chain (e.g. distributors)
Three Tiers of CustomersThree Tiers of Customers

Principle 4: Get the Strategic Sequence Right
BOS Logic: The Core Principles
Reconstruct Market
Boundaries
… overcome believes.
Reach beyond
existing Demand
… go for uncontested space.
Get the strategicGet the strategic
sequence rightsequence right
… value [innovation] first.
VIVI
COST
VALUE

Value innovation is the “new” strategic
logic behind Blue Ocean Strategy.
Instead of focussing on beating the
competition, you focus on making it
irrelevant by creating a leap in value for
buyers and creating uncontested
market space.

Value innovation only occurs when organizations
have aligned innovation with utility, price and
costs.
The market must be ready to accept the product,
meaning that timing is key.
The focus is on both differentiation and low cost
to provide value to both customers and the
organization.

Value Innovation of (Yellow tail)
Utility
proposition
(customers,
distributors and
retailers)
•Creating of a social drink that is
accessible to anyone
•Easy drinking, ease of selection, sense of
fun and adventure
•Limit number of SKUs
•Price to move at volume
Price
proposition
•Targeted at the mass of customers
•Priced against the alternative (6-pack)
Cost
structure
•Elimination of working capital tied up in
aging wines
•Fast product turnover

BOS Logic: Get the Strategic Sequence right
Buyer utility
Is there exceptional buyer
utility in your business idea?
Adoption
What are the adoption hurdles in
actualizing your business idea?
Are you addressing them up
front?
Price
Is your price easily accessible to
the mass of buyers?
Cost
Can you attain your cost target to
profit at your strategic price?
A commercially viable Blue Ocean Strategy
YES
YES
YES
YES
No  Rethink
No  Rethink
No  Rethink
No  Rethink

What factors
should be
eliminated that the
industry has taken
for granted?
Eliminate
What factors
should be reduced
well below the
industry standard?
Reduce
What factors should
be created that the
industry has never
offered?
Create
What factors
should be raised
well beyond the
industry standard?
Raise
Four Actions to create a Blue Ocean

Four Actions Framework: Key to Value Curve
Reduce
What factors
should be reduced
well below the
industry standard?
Raise
What factors
should be raised
well above the
industry standard?
The key to
discovering a new
value curve lies in
answering four
fbasic questions
Creating
new markets:
A new value
curve
Creating
new markets:
A new value
curve
Eliminate
What are the factors
that the industry has
taken for granted
should be
eliminated?
Create/Add
What are the
factors that the
industry has never
offered should be
created or added?
Cirque du Soleil example

Low
High
Industry Variables
Strategy Canvas

The Strategy Canvas
of Cirque du Soleil
High
offeringlevel
Low
Price
Fun & Humor Unique VenueAisle Concessions
Multiple Show
Arenas
Thrills & DangerAnimal Shows
Star Performers
Theme
Refined Viewing
Environment
Multiple
Productions
Artistic Music
& Dance
Cirque du Soleil
ReduceEliminate Raise Create
Ringling Brothers
Smaller Regional Circus

Wrap Up on Blue Ocean Strategy
• See Chapters 7-9 for guidelines on
implementing a Blue Ocean Strategy
• Don’t bleed – stay out of Red Oceans and
Create Yourself a Blue One!
• There are MANY other examples (not in the
book), such as:
– Jiffy Lube
– Jim Poss’s solar powered trash compactors

The Six Principles of Blue Ocean Strategy
Formulation Principles Risk factor each principle
attenuates
Reconstruct market boundaries
Focus on the big picture, not the
numbers
Reach beyond existing demand
Get the strategic sequence right
Search risk
Planning risk
Scale risk
Business model risk
Evaluation principles Risk factor each principle
attenuates
Overcome key organizational hurdles
Build execution into strategy
Organizational risk
Management risk
This figure highlights the six principles driving the successful
formulation and execution of blue ocean strategy and the risks that
these principles attenuate.

Points of view
Business often look at the industry from a
structuralist (supply) point of view
What if we looked at the industry from a
reconstructionist (demand) point of view?
Market boundaries are not viewed as given,
but could be reconstructed to unlock new
demand

Generic Strategies vs.
Value Innovation
High
Low
V1
C1
Cost
Quality
HighHigh
High
LowLow
Low
Quality
Cost
•
•
D
LC
V1
C1
Red Ocean Strategy Blue Ocean (VI) Strategy
Structuralist Reconstructionist

Generic Strategies vs.
Value Innovation
High
Low
V1
C1
Cost
Quality
HighHigh
High
LowLow
Low
Quality
Cost
•
•
D
LC
V1
C1
Red Ocean Strategy
Blue Ocean (VI) Strategy
Structuralist Reconstructionist
Blue Ocean (VI) Strategy

Strategy CanvasThe strategy canvas is both a diagnostic and an action framework for building a
compelling blue ocean strategy. It captures the current state of play in the known
market space. This allows you to understand where the competition is currently
investing, the factors the industry currently competes on in products, service, and
delivery, and what customers receive from the existing competitive offerings on the
market. The horizontal axis captures the range of factors the industry competes on an
invests in. The vertical axis captures the offering level that buyers receive across all
these key competing factors. The value curve then provides a graphic depiction of a
company’s relative performance across its industry’s factors of competition.
High
Low
Price Use of
enological
terminology
Above-the-line
marketing Aging
quality
Vineyard prestige
and legacy Wine
complexity
Wine range
Budget Wines
Premium Wines

Four Actions Framework + Eliminate/Reduce/Raise/Create Grid
The four actions framework offers an
technique that breaks the trade-off between
differentiation and low cost and to create a
new value curve. It answers the four key
questions of 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; and what should be created that
the industry has never offered.
The eliminate-reduce-raise-create grid pushes
companies not only to ask all four questions in the four
actions framework but also 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: it
pushes them to simultaneously pursue differentiation
and low costs; identifies companies who are only raising
and creating thereby raising costs; makes it easier for
managers to understand and comply; and it drives
companies to scrutinize every factor the industry
competes on.
Eliminate
Enological terminology and
distinctions
Aging qualities
Above-the-line marketing
Raise
Price versus budget wines
Retail Store involvement
Reduce
Wine complexity
Wine range
Vineyard prestige
Create
Easy drinking
Ease of selection
Fun and adventure
A
New
Value
Curve
Reduce
Eliminate Create
Raise
Which factors should be
reduced well below
industry standards?
Which factors should be
created that the industry
has never offered?
Which factors should
be raised well above
the industry’s standard?
Which of the factors
that the industry takes
for granted should be
eliminated?

ERRC Grid yellow tail
The Case of yellow tail
Eliminate
Enological terminology & distractions
Aging qualities
Raise
Price versus budget wines
Retain store involvement
Reduce
Wine complexity
Wine Range
Vineyard prestige
Create
Easy drinking
Ease of selection
Fun & adventure

To Be Canvas
• Eliminate
• Reduce
• Raise
• CreateMBA 528 Transformational Leadership & Change Management Dr Sam Ruturi 2017

Yellow Tail
Only 2 types initially – Chardonnay and Shiraz
Fruity, soft on palette, sweet-ish – great for those who had not
drunk wine before
Same bottle for red and white – low logistics costs
Simple vibrant packaging – lower case letters/kangaroo
Un-intimidating
They were selling “The essence of a great land … Australia” – ie
they were not selling the wine
Australian clothing for the retail staff – they enthusiastically
promoted a wine they could understand.

Value Innovation of [yellow tail]
Utility
proposition
(customers,
distributors and
retailers)
•Creating of a social drink that is
accessible to anyone
•Easy drinking, ease of selection,
sense of fun and adventure
•Limit number of SKUs
•Price to move at volume
Price
proposition
•Targeted at the mass of customers
•Priced against the alternative (6-pack)
Cost structure
•Elimination of working capital tied up
in aging wines
•Fast product turnover

The Strategy Canvas of Cirque du Soleil
High
OfferingLevel
Low
Price
Fun &
Humor
Unique
Venue
Aisle
Concessions
Multiple
Show
Arenas
Thrills &
Danger
Animal
Shows
Star
Performers
Theme
Refined
Viewing
Environment
Multiple
Productions
Artistic Music
& Dance
Cirque du Soleil
ReduceEliminate Raise Create
Ringling
Brothers
Smaller
Regional
Circus

The Case of Yellow Tail
Eliminate-Reduce-Raise-Create Grid:
Eliminate
Enological terminology
and distinctions
Aging qualities
Raise
Price versus budget
wines
Retail store involvement
Reduce
Wine complexity
Wine range
Vineyard prestige
Create
Easy drinking
Ease of selection
Fun and adventure
Source: Blue Ocean Strategy, Kim and
Mauborgne

Source: Blue Ocean Strategy, Kim and
Mauborgne

60
Price
Use of technical
wine terminology
Above-the-line
marketing
Aging
quality
Vineyard
prestige
Wine
complexity
Wine
range
Easy
drinkability
Ease of
selection
Fun and
adventure
Value Curve for US Wine Industry vs Yellow
Tail Expensive wines
Yellow tailCheap wines
Low
High

Strategy Canvas
Four Actions Framework
ERRC Grid
Value
Innovation
Costs
Buyer Value
Eliminate
Enological
terminology and
distinctions
Aging qualities
Above-the-line
marketing
Raise
Price versus budget
wines
Retail store
involvement
Reduce
Wine complexity
Wine range
Vineyard prestige
Create
Easy drinking
Ease of selection
Fun and adventure
Source: Blue Ocean Strategy, Kim
and Mauborgne

Cost per room 100,000 FF ↔ 270,000 FF
Cost of staff 20-23% of sales vs. 23-25%
Profit Margins > 2x industry average
Occupancy rates > 3x industry average
From customers’ perspective:
Hygiene > average 2* hotel
Bed quality > average 2* hotel
Silence > average 2* hotel
Price 100 FF ↔ 200 FF of industry
From Formule 1’s perspective:
Source: HBR: Value Innovation Logic, Kim and Mauborgne
The Case of Accor's Formule 1The Case of Accor's Formule 1
Budget HotelBudget Hotel

The value curve of Formule 1 in the French Low Budget Hotel Industry
Results of Formule 1’s StrategyResults of Formule 1’s Strategy

Low
Price
Meals
Lounges
Seating
Class
choices
Hub
connectiv
ity
Friendly
service
Speed
Frequent point-
to-point
departure
High
Average
Airline
Southwest
Car Transport
The Strategy Canvas of Southwest AirlinesThe Strategy Canvas of Southwest Airlines
The value curve of Southwest Airline
OfferingLevel
341

Personal
Finance
Software
The Pencil
Strategy Canvas of Personal Finance
Software Industry
High
OfferingLevel
Low
Price Speed AccuracyOptional
Features
Ease of
Use
Quicken

Rev: 2006.02.21
1. Eliminate:
2. Reduce:
3. Raise:
4. Create:
3. Draw the Strategy Canvas: 1 on left, 4 on right
Factors of Competition / Value Factors:
Blue Ocean Strategy
1. List 8 to 12 important Factors of Competition
2. Enter top 2 or 3 in each ERRC Grid Quadrant
Exercise
• 1. List Factors of
Competition
• 2. Top 2 or 3 in ERRC Grid
Quadrants

8
7
6
5
4
3
2
1
0
Medium
Low
Very Low
Project Name:
High
Very High
10
9
ValueFactors
Exercise
3. Write on
Worksheet:
E left, C
right
4. Draw “As
Is”
5. Draw “To
Be”

ExamplesExamples

References
• W. Chan Kim, Renée Mauborgne, Blue Ocean Strategy,
2005,
Havard Business School Press.
• http://www.blueoceanstrategy.com
• HANDELSBLATT, Donnerstag, 06. Oktober 2005,
Mit Nichtkunden neue Märkte finden.
• http://www.hotelformule1.com

Assignment:
Choose a real product that is already on the market (it
can be either one of the above or your own preferences
of product), brainstorm the value factors of the product
and develop the Strategy Canvas

73

Dr Sam Ruturi Chapter 8 Blue Ocean Strategy

Recommended

Recommended

More Related Content

Similar to Dr Sam Ruturi Chapter 8 Blue Ocean Strategy

Similar to Dr Sam Ruturi Chapter 8 Blue Ocean Strategy (20)

Recently uploaded

Recently uploaded (16)

Dr Sam Ruturi Chapter 8 Blue Ocean Strategy

Editor's Notes