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Marketing Club Instructor
Blue Ocean Strategy
Blue Ocean Strategy, Ahmed Radwan 1
Blue Ocean Strategy
Ahmed Radwan
Senior Product Manager, Sandoz
3
Red Ocean Blue Ocean
• Introduction
• Defining Red & Blue Ocean
• Six Principles of BOS
o Value Innovation
• Reach Beyond Existing Demand
Blue Ocean Strategy, Ahmed Radwan 4
Blue Ocean Strategy, Ahmed Radwan 5
If anyone does not know to which port one is sailing, no wind is favourable.
Lucius Seneca
Blue Ocean Strategy, Ahmed Radwan 6
Blue Ocean Strategy is a book published in 2005 and written by W. Chan Kim and
Renée Mauborgne, professors at INSEAD and co-directors of the INSEAD Blue
Ocean Strategy Institute.
• Go where the profits and growth are - and
where the competition isn’t.
• BOS is the simultaneous pursuit of
differentiation and low cost
• Avoidance of costly competition through
innovation with the aim to create a market
where no firms currently operate, leaving the
company to expand without competition.
• Competein existing market space
• Beat the competition
• Exploit demand
• Make the value/cost trade off
• Align strategychoice of
differentiationor low cost
• Createuncontestedmarket space
• Make the competition irrelevant
• Createand capture new demand
• Break the value/cost trade off
• Simultaneouspursuit strategy of
differentiationand low cost
Blue Ocean
• Effort to bake a bigger pie.
Red Ocean
• Fight for the biggest piece of the pie.
7Blue Ocean Strategy, Ahmed Radwan
What’s Red, What’s Blue?
Blue Ocean Strategy, Ahmed Radwan 8
Examples of Red and Blue Ocean
Six Principles of Blue Ocean Strategy
Blue Ocean Strategy, Ahmed Radwan 9
• Reconstructmarket boundaries
• Focus on the big picture, not the
numbers
• Reach beyond existing demand
• Get the strategic sequence right
Formulation
Principles
• Overcomekey organisational hurdles
• Build execution into strategy
Execution
Principles
4
Think total customer solution.
Think about what is happening
behore, during and after the
product is used.
6
Think time and business related,
irreversible clear trends.
1
Investigate market boundaries.
Look at alternative/related
industries,
3
Review customers.
Buyer, user, influencer etc.
5
Make a buyers segmentation:
emotional or functional.
If emotional then add
functionality. If functional then
add emotion.
2
Look at ‘strategic groups’ within
an industry (=companies
pursuing a similar strategy).
Blue Ocean
1. Reconstruct Market Boundaries…
10Blue Ocean Strategy, Ahmed Radwan
2. Focus on the Big Picture, Not the Numbers
Blue Ocean Strategy, Ahmed Radwan 11
• Which factors
should be created
that the industry
never offered?
• Which factors
should be raised
well above the
industry standard?
• Which factors
should be reduced
well below the
industry standard?
• Which of the factors
that the industry
takes for granted
should be
eliminated?
Eliminate Reduce
CreateRaise
Value Innovation – The Cornerstone of BOS
Blue Ocean Strategy, Ahmed Radwan 12
Blue Ocean Strategy PE Cafe Nyenrode 13
Impact of Creating Blue Oceans
W. Chan Kim en Renee Mauborgne, 2005
Blue Ocean Strategy PE Cafe Nyenrode 13
13
VALUE INNOVATORS
• Monitor competitors but
don’t use them as
benchmarks
• Don’t focus on competing
• Don’t offer product and or
service features just
because the competition is
doing so
• Think fresh: what – with all
we know - would we do if
we were starting anew
today?
• Think holistically, in terms of
total solutions for the
customer (e.g. total cost of
ownership)
14
14Blue Ocean Strategy PE Cafe NyenrodeBlue Ocean Strategy, Ahmed Radwan
3. Reach Beyond Existing Demand…
Blue Ocean Strategy, Ahmed Radwan 15
4. Get the Strategic Sequence Right…
Blue Ocean Strategy, Ahmed Radwan 16
Buyer Utility Map
Blue Ocean Strategy, Ahmed Radwan 17
Profit Model of BOS
Blue Ocean Strategy, Ahmed Radwan 18
5. Overcome Key Organizational Hurdles…
Blue Ocean Strategy, Ahmed Radwan 19
6. Build Execution into Strategy…
Blue Ocean Strategy, Ahmed Radwan 20
Explanation
Expectation
Clarity
Engagement
“Skillful leaders win wars without any fighting”
Sun Tzu ‘ Art of War’
Blue Ocean Strategy, Ahmed Radwan 21
22
3 mainstream Strategic Models
Michael Porter
Michael Treacy
en Fred Wiersema
1 2 3
• LOW COST (zero frills)
• DIFFERENTIATION
• FOCUS (on a typical customer
segment)
• CUSTOMER INTIMACY
• PRODUCT INNOVATION
• OPERATIONAL EXCELLENCE
• BLUE OCEAN
W. Chan Kim en
ReneeMauborgne
Blue Ocean Strategy, Ahmed Radwan
Three Characteristics of a Good Strategy
Blue Ocean Strategy, Ahmed Radwan 23
Thank You
• Professor Kim & Mauborgne for enlightening
us with such a great book.
• You All, for being such a wonderful audience !
Blue Ocean Strategy, Ahmed Radwan 24
Blue Ocean Strategy, Ahmed Radwan 25
5th Jeddah Marketing Club (Blue Ocean Strategy) by Dr.Ahmed Radwan

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5th Jeddah Marketing Club (Blue Ocean Strategy) by Dr.Ahmed Radwan

  • 1. Marketing Club Instructor Blue Ocean Strategy Blue Ocean Strategy, Ahmed Radwan 1
  • 2.
  • 3. Blue Ocean Strategy Ahmed Radwan Senior Product Manager, Sandoz 3 Red Ocean Blue Ocean
  • 4. • Introduction • Defining Red & Blue Ocean • Six Principles of BOS o Value Innovation • Reach Beyond Existing Demand Blue Ocean Strategy, Ahmed Radwan 4
  • 5. Blue Ocean Strategy, Ahmed Radwan 5 If anyone does not know to which port one is sailing, no wind is favourable. Lucius Seneca
  • 6. Blue Ocean Strategy, Ahmed Radwan 6 Blue Ocean Strategy is a book published in 2005 and written by W. Chan Kim and Renée Mauborgne, professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. • Go where the profits and growth are - and where the competition isn’t. • BOS is the simultaneous pursuit of differentiation and low cost • Avoidance of costly competition through innovation with the aim to create a market where no firms currently operate, leaving the company to expand without competition.
  • 7. • Competein existing market space • Beat the competition • Exploit demand • Make the value/cost trade off • Align strategychoice of differentiationor low cost • Createuncontestedmarket space • Make the competition irrelevant • Createand capture new demand • Break the value/cost trade off • Simultaneouspursuit strategy of differentiationand low cost Blue Ocean • Effort to bake a bigger pie. Red Ocean • Fight for the biggest piece of the pie. 7Blue Ocean Strategy, Ahmed Radwan What’s Red, What’s Blue?
  • 8. Blue Ocean Strategy, Ahmed Radwan 8 Examples of Red and Blue Ocean
  • 9. Six Principles of Blue Ocean Strategy Blue Ocean Strategy, Ahmed Radwan 9 • Reconstructmarket boundaries • Focus on the big picture, not the numbers • Reach beyond existing demand • Get the strategic sequence right Formulation Principles • Overcomekey organisational hurdles • Build execution into strategy Execution Principles
  • 10. 4 Think total customer solution. Think about what is happening behore, during and after the product is used. 6 Think time and business related, irreversible clear trends. 1 Investigate market boundaries. Look at alternative/related industries, 3 Review customers. Buyer, user, influencer etc. 5 Make a buyers segmentation: emotional or functional. If emotional then add functionality. If functional then add emotion. 2 Look at ‘strategic groups’ within an industry (=companies pursuing a similar strategy). Blue Ocean 1. Reconstruct Market Boundaries… 10Blue Ocean Strategy, Ahmed Radwan
  • 11. 2. Focus on the Big Picture, Not the Numbers Blue Ocean Strategy, Ahmed Radwan 11 • Which factors should be created that the industry never offered? • Which factors should be raised well above the industry standard? • Which factors should be reduced well below the industry standard? • Which of the factors that the industry takes for granted should be eliminated? Eliminate Reduce CreateRaise
  • 12. Value Innovation – The Cornerstone of BOS Blue Ocean Strategy, Ahmed Radwan 12
  • 13. Blue Ocean Strategy PE Cafe Nyenrode 13 Impact of Creating Blue Oceans W. Chan Kim en Renee Mauborgne, 2005 Blue Ocean Strategy PE Cafe Nyenrode 13 13
  • 14. VALUE INNOVATORS • Monitor competitors but don’t use them as benchmarks • Don’t focus on competing • Don’t offer product and or service features just because the competition is doing so • Think fresh: what – with all we know - would we do if we were starting anew today? • Think holistically, in terms of total solutions for the customer (e.g. total cost of ownership) 14 14Blue Ocean Strategy PE Cafe NyenrodeBlue Ocean Strategy, Ahmed Radwan
  • 15. 3. Reach Beyond Existing Demand… Blue Ocean Strategy, Ahmed Radwan 15
  • 16. 4. Get the Strategic Sequence Right… Blue Ocean Strategy, Ahmed Radwan 16
  • 17. Buyer Utility Map Blue Ocean Strategy, Ahmed Radwan 17
  • 18. Profit Model of BOS Blue Ocean Strategy, Ahmed Radwan 18
  • 19. 5. Overcome Key Organizational Hurdles… Blue Ocean Strategy, Ahmed Radwan 19
  • 20. 6. Build Execution into Strategy… Blue Ocean Strategy, Ahmed Radwan 20 Explanation Expectation Clarity Engagement
  • 21. “Skillful leaders win wars without any fighting” Sun Tzu ‘ Art of War’ Blue Ocean Strategy, Ahmed Radwan 21
  • 22. 22 3 mainstream Strategic Models Michael Porter Michael Treacy en Fred Wiersema 1 2 3 • LOW COST (zero frills) • DIFFERENTIATION • FOCUS (on a typical customer segment) • CUSTOMER INTIMACY • PRODUCT INNOVATION • OPERATIONAL EXCELLENCE • BLUE OCEAN W. Chan Kim en ReneeMauborgne Blue Ocean Strategy, Ahmed Radwan
  • 23. Three Characteristics of a Good Strategy Blue Ocean Strategy, Ahmed Radwan 23
  • 24. Thank You • Professor Kim & Mauborgne for enlightening us with such a great book. • You All, for being such a wonderful audience ! Blue Ocean Strategy, Ahmed Radwan 24
  • 25. Blue Ocean Strategy, Ahmed Radwan 25