In their classic book, Blue Ocean Strategy, W. Chan Kim & Renée Mauborgne coined the terms ’red ocean’ and ‘blue ocean’ to describe the market universe. This slide deck provides their revolutionary framework for creating and executing a Blue Ocean Strategy for your business.
Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne. They observed that companies tend to engage in head-to-head competition in search of sustained profitable growth. Yet in today’s overcrowded industries competing head-on results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Lasting success increasingly comes, not from battling competitors, but from creating blue oceans of untapped new market spaces ripe for growth.
Blue Ocean Strategy challenges everything you thought you knew about strategic success and provides a systematic approach to making the competition irrelevant.
Blue Ocean Strategy - Summary and ExamplesKhai Biau Yip
This is a workshop presentation developed by KB Yip and YS Lieu for a Learning Institution. It can be easily customized to suit the needs for other organizations. Please contact KB Yip (ymike27@hotmail.com) if you need to get a copy of this presentation.
Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne. They observed that companies tend to engage in head-to-head competition in search of sustained profitable growth. Yet in today’s overcrowded industries competing head-on results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Lasting success increasingly comes, not from battling competitors, but from creating blue oceans of untapped new market spaces ripe for growth.
Blue Ocean Strategy challenges everything you thought you knew about strategic success and provides a systematic approach to making the competition irrelevant.
Blue Ocean Strategy - Summary and ExamplesKhai Biau Yip
This is a workshop presentation developed by KB Yip and YS Lieu for a Learning Institution. It can be easily customized to suit the needs for other organizations. Please contact KB Yip (ymike27@hotmail.com) if you need to get a copy of this presentation.
2011 will bring significant changes to a wide variety of industries. While many organization believe they are innovating for a better tomorrow in reality they are only making modification of today's familiar territory.
Blue Ocean Strategy challenges leaders to work through a meticulous set of frameworks that flesh out opportunities that are not obvious using yesterday's tool kits. Blue Ocean Strategy requires a responsible imagination. That is, the ability to dream and see beyond today while applying analytical tools that assist in risk reduction and genuine breakthrough thinking and valid value innovations.
Drawing on more than a decade of new work, Kim and Mauborgne show us how to move beyond competing, inspire our people's confidence, and seize new growth, guiding us step-by-step through how to take our organization from a red ocean crowded with competition to a blue ocean of uncontested market space. By combining the insights of human psychology with practical market-creating tools and real-world guidance, Kim and Mauborgne deliver the definitive guide to shift our self, our team, or our organization to new heights of confidence, market creation, and growth. They show why non-disruptive creation is as important as disruption in seizing new growth.
Blue Ocean Shift is packed with all-new research and examples of how leaders in diverse industries and organizations made the shift and created new markets by applying the process and tools outlined in the book. Whether we are a cash-strapped startup or a large, established company, non-profit or national government, we will learn how to move from red to blue oceans in a way that builds our people's confidence so that they own and drive the process.
With battle-tested lessons learned from successes and failures in the field, Blue Ocean Shift is critical reading for leaders, managers, and entrepreneurs alike. You'll learn what works, what doesn't, and how to avoid the pitfalls along the way. This book will empower us to succeed as we embark on our own blue ocean journey. Blue Ocean Shift is indispensable for anyone committed to building a compelling future.
This is the first presentation of a two part webinar for Blue ocean strategy.
The presentation introduces to red ocean and blue ocean companies, How blue ocean strategy is a simultaneous pursuit of cost and value.
The presentation provides a quick introduction with new age examples to strategy canvas, 6 paths framework, four actions frame work, buyer utility map, 3 tiers of non customers and PMS maps.
The presentation also utilizes these frameworks in showcasing descriptive case studies of companies like netjets, indochino.com, Zynga and khan academy.
This presentation is aimed at explaining the greatness of Blue ocean strategy thinking to general audience and does not imply distortion of facts and frameworks of the original Authors: Chan Kim, Renee Mauborgne
Blue green red and purple ocean strategySajna Fathima
blue green purple and red ocean strategy
Globalization is characterized by global production and exchange of goods and services as well as a global flow of technology, information, and capital. The business strategy is composed of two types of oceans: red oceans and blue oceans. Red ocean strategy is to intense competition. On the other hand, Blue ocean strategy is about growing demand, breaking away from the competition.
Blue Ocean Strategy - Creating Value Innovationsmelanie_ernst
Why still bothering what the competition is doing? Can you really win the battle? Or wouldn’t it be much nicer to get out and create your own market, where YOU are the only supplier. Blue Ocean Strategy leads you to uncontested market space, making the competition irrelevant by creating and capturing new demand, breaking the value-cost-trade off and aligning the whole system of a firm's activities in pursuit of differentiation and low cost.
In the continual quest for sustainable growth, companies
have traditionally focused on the competition.
They have fought over the same customers, tried to
improve on the same benefits, and hoped to wring
profits from a shrinking revenue stream. In Blue
Ocean Strategy, professors W. Chan Kim and Renée
Mauborgne argue that the key to success is to make the
competition irrelevant. They offer a practical, tested
analytical framework that innovators in any sector
can use to create new, uncontested market space. In
this “blue ocean,” organizations can take advantage
of untapped demand and deliver powerful leaps in
value—both for their customers and for themselves.
Blue Ocean Strategy talked about 4 Key Concepts which are Eliminate, Reduce, Raise, and Create. This slide explain the 4 key concepts and give example what Air Asia implement ERRC.
Blue Ocean Shift is a framework that combines the insights of human psychology with practical market-creating tools and real-world guidance on guiding organisations and their teams to move beyond competing (market creation), inspire team’s confidence, and seize new growth. Whether you are a cash-strapped start-up, large established company, non-profit or national government, you will learn how to move from red to blue oceans in a way that builds your people’s confidence so that they own and drive the process.
With battle-tested lessons learned from successes and failures in the field, Blue Ocean Shift is critical for business leaders, managers, and entrepreneurs alike. You’ll learn what works, what doesn’t, and how to avoid the pitfalls along the way. The framework will empower you to succeed as you embark on your own blue ocean journey. This one-hour talk on Blue Ocean Shift will showcase the framework and tools through sharing case studies of success stories.
For further information, visit our website at ma2017.mymagic.my.
Facebook - Facebook.com/magic.cyberjaya
Twitter - Twitter.com/MagicCyberjaya
Instagram - Instagram.com/magic_cyberjaya/
LinkedIn - my.linkedin.com/in/magiccyberjaya
YouTube - https://www.youtube.com/channel/UCIT_ihmWh5f3MCobvEwWMaA
Summary of Blue Ocean Strategy and tools. To be used as a quick reference of the concepts and tools. Not a replacement to reading the book (www.blueoceanstrategy.com)
2011 will bring significant changes to a wide variety of industries. While many organization believe they are innovating for a better tomorrow in reality they are only making modification of today's familiar territory.
Blue Ocean Strategy challenges leaders to work through a meticulous set of frameworks that flesh out opportunities that are not obvious using yesterday's tool kits. Blue Ocean Strategy requires a responsible imagination. That is, the ability to dream and see beyond today while applying analytical tools that assist in risk reduction and genuine breakthrough thinking and valid value innovations.
Drawing on more than a decade of new work, Kim and Mauborgne show us how to move beyond competing, inspire our people's confidence, and seize new growth, guiding us step-by-step through how to take our organization from a red ocean crowded with competition to a blue ocean of uncontested market space. By combining the insights of human psychology with practical market-creating tools and real-world guidance, Kim and Mauborgne deliver the definitive guide to shift our self, our team, or our organization to new heights of confidence, market creation, and growth. They show why non-disruptive creation is as important as disruption in seizing new growth.
Blue Ocean Shift is packed with all-new research and examples of how leaders in diverse industries and organizations made the shift and created new markets by applying the process and tools outlined in the book. Whether we are a cash-strapped startup or a large, established company, non-profit or national government, we will learn how to move from red to blue oceans in a way that builds our people's confidence so that they own and drive the process.
With battle-tested lessons learned from successes and failures in the field, Blue Ocean Shift is critical reading for leaders, managers, and entrepreneurs alike. You'll learn what works, what doesn't, and how to avoid the pitfalls along the way. This book will empower us to succeed as we embark on our own blue ocean journey. Blue Ocean Shift is indispensable for anyone committed to building a compelling future.
This is the first presentation of a two part webinar for Blue ocean strategy.
The presentation introduces to red ocean and blue ocean companies, How blue ocean strategy is a simultaneous pursuit of cost and value.
The presentation provides a quick introduction with new age examples to strategy canvas, 6 paths framework, four actions frame work, buyer utility map, 3 tiers of non customers and PMS maps.
The presentation also utilizes these frameworks in showcasing descriptive case studies of companies like netjets, indochino.com, Zynga and khan academy.
This presentation is aimed at explaining the greatness of Blue ocean strategy thinking to general audience and does not imply distortion of facts and frameworks of the original Authors: Chan Kim, Renee Mauborgne
Blue green red and purple ocean strategySajna Fathima
blue green purple and red ocean strategy
Globalization is characterized by global production and exchange of goods and services as well as a global flow of technology, information, and capital. The business strategy is composed of two types of oceans: red oceans and blue oceans. Red ocean strategy is to intense competition. On the other hand, Blue ocean strategy is about growing demand, breaking away from the competition.
Blue Ocean Strategy - Creating Value Innovationsmelanie_ernst
Why still bothering what the competition is doing? Can you really win the battle? Or wouldn’t it be much nicer to get out and create your own market, where YOU are the only supplier. Blue Ocean Strategy leads you to uncontested market space, making the competition irrelevant by creating and capturing new demand, breaking the value-cost-trade off and aligning the whole system of a firm's activities in pursuit of differentiation and low cost.
In the continual quest for sustainable growth, companies
have traditionally focused on the competition.
They have fought over the same customers, tried to
improve on the same benefits, and hoped to wring
profits from a shrinking revenue stream. In Blue
Ocean Strategy, professors W. Chan Kim and Renée
Mauborgne argue that the key to success is to make the
competition irrelevant. They offer a practical, tested
analytical framework that innovators in any sector
can use to create new, uncontested market space. In
this “blue ocean,” organizations can take advantage
of untapped demand and deliver powerful leaps in
value—both for their customers and for themselves.
Blue Ocean Strategy talked about 4 Key Concepts which are Eliminate, Reduce, Raise, and Create. This slide explain the 4 key concepts and give example what Air Asia implement ERRC.
Blue Ocean Shift is a framework that combines the insights of human psychology with practical market-creating tools and real-world guidance on guiding organisations and their teams to move beyond competing (market creation), inspire team’s confidence, and seize new growth. Whether you are a cash-strapped start-up, large established company, non-profit or national government, you will learn how to move from red to blue oceans in a way that builds your people’s confidence so that they own and drive the process.
With battle-tested lessons learned from successes and failures in the field, Blue Ocean Shift is critical for business leaders, managers, and entrepreneurs alike. You’ll learn what works, what doesn’t, and how to avoid the pitfalls along the way. The framework will empower you to succeed as you embark on your own blue ocean journey. This one-hour talk on Blue Ocean Shift will showcase the framework and tools through sharing case studies of success stories.
For further information, visit our website at ma2017.mymagic.my.
Facebook - Facebook.com/magic.cyberjaya
Twitter - Twitter.com/MagicCyberjaya
Instagram - Instagram.com/magic_cyberjaya/
LinkedIn - my.linkedin.com/in/magiccyberjaya
YouTube - https://www.youtube.com/channel/UCIT_ihmWh5f3MCobvEwWMaA
Summary of Blue Ocean Strategy and tools. To be used as a quick reference of the concepts and tools. Not a replacement to reading the book (www.blueoceanstrategy.com)
This is a very valuable tool and a conceptual model pertaining 'Strategy' with a Blue Ocean perspective. This is equally important for business executives and MBA students.
What is Blue Ocean Strategy?
Why Blue Ocean?
Cirque du Soleil, one of Canada’s largest cultural exports.
Cirque du Soleil did not compete with Ringling Bros. and Barnum & Bailey.
It created uncontested new market space that made the competition irrelevant.
The Blue Ocean Strategy (BOS) is still relatively new and had been introduced only in 2004 by W. C. Kim and
R Mauborgne.
Its principles are simple but its operationalisation and implementation has yet to be properly
synchronized.
Blue Ocean Strategy helps organizations develop uncontested market space and make the competition irrelevant. The attached presentation summarizes the concept and utilizes laptops as an example to create a new strategy.
A Quintessential smart city infrastructure framework for all stakeholdersJonathan L. Tan, M.B.A.
Smart City Infrastructure Framework provides guidance to open government data and infrastructure essentials for ICT \ Telecom, Energy \ Renewable Energy, Water \ Waste Water, Transportation, Education, Health and Government Services systems
I. Smart City Drivers
Smart City Definition
Smart City Elements
II. Smart City Infrastructure Frameworks
III. Technology Ecosystem
Stakeholders
ICT Essentials
OGD
ICT for Building Automation
Smart Water
Smart Energy
Smart Transportation
Smart Education
Smart Healthcare
Smart City Services
IV. Smart City Applications
V. Smart City Systems Infrastructure
Top SC Vendors
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
An introduction to the cryptocurrency investment platform Binance Savings.Any kyc Account
Learn how to use Binance Savings to expand your bitcoin holdings. Discover how to maximize your earnings on one of the most reliable cryptocurrency exchange platforms, as well as how to earn interest on your cryptocurrency holdings and the various savings choices available.
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Kyiv PMDay 2024 Summer
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Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
In the Adani-Hindenburg case, what is SEBI investigating.pptxAdani case
Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
2. BLUE OCEAN STRATEGY
• WHAT ARE RED OCEANS AND BLUE OCEANS?
• What is a Blue Ocean Strategy
• BLUE OCEAN STRATEGY & SHIFT TOOLS
• Value Innovation
• Strategy Canvas
• Four Actions Framework -ERRC Grid
• Six Paths Framework
• Pioneer Migrator Settler Map
• Three Tiers of Noncustomers
• Sequence of Creating a Blue Ocean
• Buyer Utility Map
• Price Corridor of the Mass
• Four Hurdles to Strategy Execution
• Tipping Point Leadership
• Fair Process
• Sequence of Blue Ocean Strategy
• Three Key Components Of A Successful Blue Ocean Shift
• How To Put Blue Ocean Leadership Into Practice?
3. WHAT ARE RED OCEANS AND BLUE OCEANS?
• Red oceans are all the industries in existence today
• Blue oceans, in contrast, denote all the industries not
in existence today – the unknown market space,
untainted by competition.
In their classic book, Blue Ocean Strategy, W. Chan Kim & Renée Mauborgne coined the
terms ’red ocean’ and ‘blue ocean’ to describe the market universe.
4. WHAT IS BLUE OCEAN STRATEGY?
• Blue ocean strategy is the simultaneous pursuit of
differentiation and low cost to open-up a new market space
and create new demand.
• It is about creating and capturing uncontested market space,
thereby making the competition irrelevant.
• It is based on the view that market boundaries and industry
structure are not a given and can be reconstructed by the
actions and beliefs of industry players.
8. BLUE OCEAN STRATEGY & SHIFT
TOOLS1. Value Innovation
2. Strategy Canvas
3. Four Actions Framework (ERRC Grid)
4. Six Paths Framework
5. Pioneer Migrator Settler Map
6. Three Tiers of Noncustomers
7. Sequence of Creating a Blue Ocean
8. Buyer Utility Map
9. Price Corridor of the Mass
10.Four Hurdles to Strategy Execution
11.Tipping Point Leadership
12.Fair Process
13.Sequence of Blue Ocean Strategy
9. Cost savings are made by eliminating
and reducing the factors an industry
competes on.
Buyer value is lifted by raising and
creating elements the industry has never
offered.
1. VALUE INNOVATION
10. Break the value-cost trade-off by answering the following
questions:
•Which of the factors that the industry takes for granted
should be eliminated?
•Which factors should be reduced well below the industry’s
standard?
•What factors should be raised well above the industry’s
standard?
•What factors should be created that the industry has never
offered?
VALUE INNOVATION
12. The Strategy Canvas serves two purposes:
1. It captures the current state of play in the known market
space, which allows users to clearly see the factors that an
industry competes on and invests in, what buyers receive,
and what the strategic profiles of the major players are.
2. It propels users to action by reorienting their focus
from competitors to alternatives and
from customers to noncustomers of the industry and allows
you to visualize how a blue ocean strategic move breaks
away from the existing red ocean reality.
23. To varying degrees, companies may face four types of hurdles to strategy
execution. Knowing how to triumph over these organizational hurdles is key to
successful strategy execution. W. Chan Kim and Renée Mauborgne identified
four key hurdles to strategy execution:
1. The Cognitive Hurdle: Waking employees up to the need for a strategic
shift. Red oceans may not be the paths to future profitable growth, but they
may have served the organization well historically, so why rock the boat?
2. The Resource Hurdle: It is assumed that the greater the shift in strategy,
the greater the resources it requires for execution.
3. The Motivational Hurdle: How do you motivate key players to move fast
and tenaciously to carry out a break from the status quo?
4. The Political Hurdle: As one manager put it, “In our organization you get
shot down before you stand up.”
FOUR HURDLES TO STRATEGY EXECUTION
24. Tipping Point
Leadership
To achieve a strategic shift at low cost, focus on the
extremes – the people, acts, and activities that exert a
disproportionate influence on performance.
Conventional Wisdom The theory of organizational change rests on
transforming the mass and these efforts require steep
resources and long timeframes.
12. TIPPING POINT LEADERSHIP
25. By single-mindedly focusing on points of disproportionate
influence, tipping point leadership helps managers topple the four
hurdles to strategy execution quickly and at a low cost by
answering the following questions:
1. What factors or acts exercise a disproportionately positive
influence on breaking the status quo?
2. On getting the maximum bang out of each buck of resources?
3. On motivating key players to aggressively move forward with
change?
4. And on knocking down political roadblocks that often trip up
even the best strategies?
TIPPING POINT LEADERSHIP
28. A blue ocean shift means moving yourself, your
team and your organization from cutthroat markets
to wide-open new markets in a way that your
people own and drive the process.
HOW TO SHIFT FROM RED TO BLUE
OCEANS?
29. THREE KEY COMPONENTS OF A SUCCESSFUL
BLUE OCEAN SHIFT
PERSPECTIVE
The mindset of a blue ocean
strategist
ROADMAP
Market-creating tools and process
along with clear guidance on how
to apply them
CONFIDENCE
Humanness that builds people’s
confidence at every level to drive
and own the process
30. A blue ocean is
created by opening a
new value-cost frontier
that is a leap beyond
the existing industry
productivity curve. It
makes competition on
the existing frontier
irrelevant.
31. Focus on the values, qualities and behavioral styles Focus on acts and activities leaders need to undertake
Detached from market results people are expected to
achieve
Leaders’ actions closely connected to market realities
Focus mostly on the executive and senior levels Distribute leadership across three management levels
Extra time required for leadership practices High impact leadership acts and activities at low cost
CONVENTIONAL LEADERSHIP
DEVELOPMENT APPROACHES
BLUE OCEAN
LEADERSHIP
vs
32. HOW TO PUT BLUE OCEAN LEADERSHIP
INTO PRACTICE?
•FOLLOW THE FOUR-STEP PROCESS
TO CONVERT NONCUSTOMERS INTO
CUSTOMERS OF YOUR LEADERSHIP
The horizontal axis on the strategy canvas captures the range of factors that an industry competes on and invests in, while the vertical axis captures the offering level that buyers receive across all of these key competing factors. A value curve or strategic profile is the graphic depiction of a company’s relative performance across its industry’s factors of competition.
The strategy canvas allows your organization to see in one simple picture all the factors an industry competes on and invests in, what buyers receive, and what the strategic profiles of the major players are. It exposes just how similar the players’ strategies look to buyers and reveals how they drive the industry toward the red ocean. Importantly, it creates a commonly owned baseline for change.
The Four Actions Framework developed by W. Chan Kim and Renée Mauborgne is used to reconstruct buyer value elements in crafting a new value curve or strategic profile. To break the trade-off between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry’s strategic logic.
To win in the future companies need to stop trying to beat the competition. The Six Paths Framework developed by W. Chan Kim and Renée Mauborgne allows managers to address the search risk many companies struggle with. It enables them to successfully identify out of the haystack of possibilities that exist, commercially compelling blue oceans by reconstructing market boundaries.
A useful exercise for a corporate management team pursuing profitable growth is to plot the company’s current and planned portfolios on the Pioneer-Migrator-Settler Map
Settlers are defined as me-too businesses, migrators are business offerings better than most in the marketplace, and a company’s pioneers are the businesses that offer unprecedented value.
These are a company’s blue ocean strategic moves and are the most powerful sources of profitable growth. They are the only ones with a mass following of customers.
Typically, to grow their share of a market, companies strive to retain and expand their existing customer base.
Although the universe of noncustomers typically offers blue ocean opportunities, few companies have keen insight into who noncustomers are and how to unlock them. To convert this huge latent demand into real demand in the form of new customers, companies need to deepen their understanding of the universe of noncustomers.
The first tier of noncustomers is closest to the current market, sitting just on the edge. They are buyers who minimally purchase an industry’s offering out of necessity but are mentally noncustomers of the industry.
The second tier of noncustomers is people who refuse to use an industry’s offering. These are buyers who have seen the current offering as an option to fulfill their needs but have decided against participating.
The third tier of noncustomers is farthest from the market. They are noncustomers who have never considered the market’s offering as an option.
By focusing on key commonalities across these noncustomers and existing customers, companies can understand how to pull them into their new market.
The Buyer Utility Map, developed by W. Chan Kim and Renée Mauborgne, helps to get managers thinking from a demand-side perspective. It outlines all the levers companies can pull to deliver exceptional utility to buyers as well as the various experiences buyers can have with a product or service. This mindset helps managers identify the full range of utility spaces that a product or service can potentially fill. It has two dimensions: The Buyer Experience Cycle (BEC) and the Utility levers.
The Buyer Experience Cycle (BEC): A buyer’s experience can usually be broken into a cycle of six stages, running more or less sequentially from purchase to disposal.
Utility levers: Cutting across the stages of the buyer’s experience are what we call utility levers – the ways in which companies unlock utility for their customers.
By locating a new offering on one of the spaces of the buyer utility map, managers can clearly see how, and whether, the new idea creates a different utility proposition from existing offerings but also removes the biggest blocks to utility that stand in the way of converting noncustomers into customers. In our experience, managers all too often focus on delivering more of the same stage of the buyer’s experience. This approach may be reasonable in emerging industries, where there is plenty of room for improving a company’s utility proposition. But in many existing industries, this approach is unlikely to produce a market-shaping blue ocean strategy.
The Price Corridor of the Target Mass developed by W. Chan Kim and Renée Mauborgne is a tool managers can use to determine the right price to unlock the mass of target buyers. When setting a strategic price for a product or service, managers must evaluate the trade-offs that buyers consider when making their purchasing decision, as well as the level of legal and resource protection that will block other companies from imitating their offering.
To set the strategic price, first identify the price corridor of the target mass, that is, the price range that attracts the mass of target buyers. Key to determining the strategic price is for managers to understand the price sensitivities of buyers who will be comparing the new offering with a host of very different-looking products and services offered outside the group of traditional competitors. For example, buyers can choose between several movie theaters, but they can also decide to go to restaurants and bars. Managers should consider two categories of products/services that are beyond an industry’s boundaries in identifying the price corridor of the mass: products and services that take different forms but perform the same function, and products and services that have different forms and functions but serve the same objective.
Next, determine how high or low the strategic price should be set within the corridor without inviting imitation from competition. A company must consider two sets of factors: the level of legal and resource protection the new offering has to block imitation, and secondly the degree to which the company owns some exclusive asset or core capability that can also block imitation. The higher the level of protection against imitation, the higher the strategic price can be within the price range that still attracts the mass of target buyers. For example, if the product or service has strong patents and hard-to-imitate service capabilities one can use upper-boundary strategic pricing to attract the mass of buyers. On the other hand, if a manager is uncertain about their patent and asset protection they should consider pricing somewhere in the middle to lower end of the corridor.
FOUR HURDLES TO STRATEGY EXECUTION
Once a company has developed a blue ocean strategy with a profitable business model, the next challenge is strategy execution. The challenge of execution exists, of course, for any strategy. Companies, like individuals, often have a tough time translating thought into action whether in red or blue oceans. But, compared with red ocean strategy, this can be especially difficult for blue ocean strategy as it represents a significant departure from the status quo.
To varying degrees, companies may face four types of hurdles to strategy execution. Knowing how to triumph over these organizational hurdles is key to successful strategy execution. W. Chan Kim and Renée Mauborgne identified four key hurdles to strategy execution:
The Cognitive Hurdle: Waking employees up to the need for a strategic shift. Red oceans may not be the paths to future profitable growth, but they may have served the organization well historically, so why rock the boat?
The Resource Hurdle: It is assumed that the greater the shift in strategy, the greater the resources it requires for execution.
The Motivational Hurdle: How do you motivate key players to move fast and tenaciously to carry out a break from the status quo?
The Political Hurdle: As one manager put it, “In our organization you get shot down before you stand up.”
Fair process is a concept developed by W. Chan Kim and Renée Mauborgne that builds execution into strategy by creating people’s buy-in up front. When fair process is exercised in the strategy formulation phase, people trust that a level playing field exists, inspiring voluntary cooperation during the execution phase.
There are three mutually reinforcing elements that define fair process: engagement, explanation, and clarity of expectation. Whether people are senior executives or shop employees, they all look to these elements. Kim and Mauborgne call them the three Ε principles of fair process.
Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost, and adoption. This allows them to build a viable business model and ensure that a company profits from the blue ocean it is creating. W. Chan Kim and Renée Mauborgne argue that with an understanding of the right strategic sequence and of how to assess blue ocean ideas against the key criteria in that sequence, companies can dramatically reduce business model risk and ensure that both the company and its customers win as it creates new business terrain.
Here Kim and Mauborgne articulate the strategic sequence of creating a commercially viable blue ocean idea. The starting point is buyer utility. Does your offering unlock exceptional utility? Is there a compelling reason for the mass of people to buy it?
Second, is your offering priced to attract the mass of target buyers so that they have a compelling ability to pay for your offering? If it is not, they cannot buy it. Nor will the offering create irresistible market buzz.
These first two steps address the revenue side of a company’s business model. They ensure that you create a leap in net buyer value. To secure the profit side you need to assess the third element: cost. The cost side of a company’s business model ensures that it creates a leap in value for itself in the form of profit—that is, the price of the offering minus the cost of production.
The key question here is: Can you produce your offering at the target cost and still earn a healthy profit margin? You should not let costs drive prices. Nor should you scale down utility because high costs block your ability to profit at the strategic price. When the target cost cannot be met, you must either forgo the idea because the blue ocean won’t be profitable, or you must innovate your business model to hit the target cost.
The last step in the sequence is to address adoption hurdles. What are the adoption hurdles in rolling out your idea? Have you addressed these up front? The formulation of blue ocean strategy is complete only when you can address adoption hurdles in the beginning to ensure the successful actualization of your idea.
To successfully shift from red oceans of bloody competition to blue oceans of new market space depends on three key components:
Having the right perspective,
A clear roadmap with market-creating tools
Building people’s confidence at every level to drive and own the process
The classic productivity frontier defines the existing boundary of an industry, the highest level of value and the corresponding costs an organization can achieve, given currently available technology and business best practices.
Blue Ocean Leadership involves a four-step process that allows leaders to gain a clear understanding of just what changes it would take to bring out the best in their people, while conserving their most precious resource: TIME
To explain the map, it is important to start at the top, realizing that there is a wide gulf in organizations between the potential and realized talent within. According to Gallup’s State of the Global Workplace report*, the majority of employees in the countries surveyed around the world are disengaged, merely doing what it takes to get by, or actively disengaged and acting out their discontent in unproductive ways. These disengaged employees are effectively the noncustomers of leadership.
Key Differences
While leaders don’t intentionally leave untapped talent and employee potential on the table, their understanding of this issue is key to turning the situation around. To do that, it’s important that leaders and HR directors start by understanding the principles underlying blue ocean leadership. These are: that leadership should be connected to market realities; be focused on acts and activities that have a direct and measurable impact on performance; be distributed across the organization; and, to be achievable, should focus as much on what leaders should eliminate and reduce in what they do as on what acts and activities they should raise and create to achieve a step change in leadership strength. Without eliminating and reducing to create room on leaders’ plates, few have the time to up their game even if they wanted to (the left of the diagram).
As we illustrate, this is different from conventional leadership approaches (red oceans). We have observed that leadership approaches used in firms are often focused on personal qualities and behavioral styles that are hard to change and are detached from what firms stand for in the eyes of customers and from the market results employees are expected to achieve. Using blue ocean leadership to connect to the market, the people who face market realities every day are asked for their direct input on the acts and activities of their leaders, and what they need from their leaders to effectively serve customers.
Starting the process
Blue ocean leadership is based on a four-step process. Before making changes in leadership, it is important for the organization to understand where leadership stands today and where it is falling short. This is done by creating the “As-Is Leadership Canvas”, which creates a company-wide conversation on what actions actually absorb leaders’ time at each level. From there, organizations should:
Apply the blue ocean leadership grid to determine which activities should be eliminated, reduced, raised or created.
Develop alternative “To-Be Leadership Profiles”
Present To-Be Leadership Canvases at a “Leadership Fair”
Select “To-Be Leadership Profiles”
The bottom of the diagram provides a high-level understanding of how the four-step process is executed, who drives the process, and how it achieves high performance fast and at low cost while gaining employees’ commitment for change.
Making the change
The development of To-Be Leadership Profiles will have given organizations the ability to see the changes needed. Once the leadership reality is realized, a case for change can be made (right side of the diagram).
Operating on the blue ocean leadership foundation, the leadership actions of frontline and middle managers will be reset, giving senior leaders the ability to delegate more and spend more time charting the company’s future rather than focusing on day-to-day operations.
It will also liberate, coach and empower middle management, making them less controlling and nervous of acting alone. The frontline managers will spend less time trying to please the boss and more time serving customers.
While leadership is by no means an exact science, rethinking the acts and activities of senior managers can free them from forms, reporting and dealing with day-to-day operational issues to focus on strategy and communication. With more empowerment, frontline managers can make decisions and spend less time reporting upwards on all aspects of the day-to-day. Together, this can unlock high performance at the top and unleash an ocean of unrealized talent and energy on the front lines.
Intuit created a blue ocean with its Quicken financial software package by looking across substitute industries and reconstructing boundaries across them.
To sort out their personal finances people can buy and install a financial software package, hire a CPA, or simply use pencil and paper. The software, the CPA, and the pencil are largely substitutes for each other. They have very different forms but serve the same function: helping people manage their financial affairs.
Instead of benchmarking the competition, Intuit created a blue ocean by looking to the pencil as the chief alternative to personal financial software to develop Quicken software. Intuit focused on bringing out both the decisive advantages that financial software had over the pencil – speed and accuracy; and the decisive advantages that the pencil had over software – simplicity of use and low price – and eliminated or reduced everything else.
With Quicken’s user-friendly interface resembling the familiar checkbook, it was faster and more accurate than the pencil, yet almost as simple to use. The program eliminated the accounting jargon and the sophisticated features traditional financial software offered, offering only the few basic functions that most customers use.
The product was so simple, easy to use, fun and productive that buyers fell in love with it. Moreover, simplifying the software cut costs. Neither the pencil nor other software packages could compete.
Today, more than thirty years on, Quicken still remains the number-one-selling personal financial software. Microsoft tried for years to dislodge Intuit’s value innovation, but after nearly thirty years of efforts and investment, it finally threw in the towel and ceased operations of its contender, Microsoft Money, in 2009.