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.
This document provides an overview of blue ocean strategy, which aims to create new market space and make competition irrelevant. It discusses key concepts like the strategy canvas and four action framework for reconstructing market boundaries. The six principles of blue ocean strategy include reconstructing market boundaries, focusing on the big picture rather than numbers, reaching beyond existing demand, and getting the strategic sequence and execution right to overcome organizational hurdles. Visual tools are presented to help formulate a blue ocean strategy that creates exceptional buyer utility at an accessible price to attract new demand beyond current customers.
Blue ocean strategy is a concept developed by W. Chan Kim and Renée Mauborgne that involves creating new market space and breaking away from competition. It is based on a decade of research on over 150 strategic moves spanning 30 industries. The goal is not to outperform competitors but to make them irrelevant by creating new demand in uncontested market space. Key aspects include focus, divergence from competitors, compelling taglines, and tools and frameworks to systematically create blue oceans. Examples include Canon creating the desktop copier market by targeting individual users instead of corporate purchasers.
Blue Ocean Strategy + Story + Video + Case Study Nikhil Mhatre
This document summarizes the key concepts of Blue Ocean Strategy (BOS) based on a book by W. Chan Kim and Renée Mauborgne. It provides an overview of BOS, including its definition as creating new market space without competition by raising and creating new factors. It discusses the six principles of BOS and tools like the strategy canvas. Two case studies are presented: the classical orchestra industry, where BOS helped Andre Rieu succeed, and Nintendo Wii, which used BOS to target non-gamers and become profitable with new demand. The document concludes by comparing traditional vs. innovative tutorials to illustrate how BOS allows businesses to avoid competition.
The document analyzes the Chase Sapphire Reserve credit card. It finds that the 100,000 point introductory sign-on bonus was a good investment for Chase as it will achieve a positive net present value within 6 years. However, to breakeven on costs, customers need to spend $1,408 annually on the card. The document recommends Chase reduce the intro bonus to 50,000 points, increase annual fees to match competitors, and lower the points redemption rate to 1.25x to improve profitability. It also suggests rejecting recent credit card applicants to reduce churners.
The document discusses key concepts from Blue Ocean Strategy, including:
1. Value innovation is created by favorably affecting both cost structure and value proposition to buyers. Costs are reduced by eliminating competition factors while buyer value is increased by offering new elements.
2. Blue ocean strategy aims to create new market space by breaking the value-cost tradeoff, while red ocean strategy involves competing in existing market space on factors like cost or differentiation.
3. Tools for developing blue ocean strategy include the strategy canvas, four actions framework, buyer utility map, and analyzing the buyer experience cycle. The strategic sequence and evaluating ideas on utility, price, cost and adoption are also discussed.
Ajanta Packaging is one of the top suppliers of glass bottles in India with over 50 employees and $100 million in annual revenue. However, the glass bottle industry faces stiff competition from other packaging materials and options that have entered the market in recent years. With many companies shifting to PET bottles, tetra packs, and flexible packaging to reduce costs and improve durability, Ajanta's revenue comes 95% from glass bottles, making it highly dependent on a saturated market.
This document provides an overview of blue ocean strategy, which aims to create new market space and make competition irrelevant. It discusses key concepts like the strategy canvas and four action framework for reconstructing market boundaries. The six principles of blue ocean strategy include reconstructing market boundaries, focusing on the big picture rather than numbers, reaching beyond existing demand, and getting the strategic sequence and execution right to overcome organizational hurdles. Visual tools are presented to help formulate a blue ocean strategy that creates exceptional buyer utility at an accessible price to attract new demand beyond current customers.
Blue ocean strategy is a concept developed by W. Chan Kim and Renée Mauborgne that involves creating new market space and breaking away from competition. It is based on a decade of research on over 150 strategic moves spanning 30 industries. The goal is not to outperform competitors but to make them irrelevant by creating new demand in uncontested market space. Key aspects include focus, divergence from competitors, compelling taglines, and tools and frameworks to systematically create blue oceans. Examples include Canon creating the desktop copier market by targeting individual users instead of corporate purchasers.
Blue Ocean Strategy + Story + Video + Case Study Nikhil Mhatre
This document summarizes the key concepts of Blue Ocean Strategy (BOS) based on a book by W. Chan Kim and Renée Mauborgne. It provides an overview of BOS, including its definition as creating new market space without competition by raising and creating new factors. It discusses the six principles of BOS and tools like the strategy canvas. Two case studies are presented: the classical orchestra industry, where BOS helped Andre Rieu succeed, and Nintendo Wii, which used BOS to target non-gamers and become profitable with new demand. The document concludes by comparing traditional vs. innovative tutorials to illustrate how BOS allows businesses to avoid competition.
The document analyzes the Chase Sapphire Reserve credit card. It finds that the 100,000 point introductory sign-on bonus was a good investment for Chase as it will achieve a positive net present value within 6 years. However, to breakeven on costs, customers need to spend $1,408 annually on the card. The document recommends Chase reduce the intro bonus to 50,000 points, increase annual fees to match competitors, and lower the points redemption rate to 1.25x to improve profitability. It also suggests rejecting recent credit card applicants to reduce churners.
The document discusses key concepts from Blue Ocean Strategy, including:
1. Value innovation is created by favorably affecting both cost structure and value proposition to buyers. Costs are reduced by eliminating competition factors while buyer value is increased by offering new elements.
2. Blue ocean strategy aims to create new market space by breaking the value-cost tradeoff, while red ocean strategy involves competing in existing market space on factors like cost or differentiation.
3. Tools for developing blue ocean strategy include the strategy canvas, four actions framework, buyer utility map, and analyzing the buyer experience cycle. The strategic sequence and evaluating ideas on utility, price, cost and adoption are also discussed.
Ajanta Packaging is one of the top suppliers of glass bottles in India with over 50 employees and $100 million in annual revenue. However, the glass bottle industry faces stiff competition from other packaging materials and options that have entered the market in recent years. With many companies shifting to PET bottles, tetra packs, and flexible packaging to reduce costs and improve durability, Ajanta's revenue comes 95% from glass bottles, making it highly dependent on a saturated market.
This document discusses the concept of blue ocean strategy, which focuses on creating new market space and making competition irrelevant. It provides an overview of key aspects of blue ocean strategy:
- Blue ocean strategy is based on over a decade of research studying over 150 strategic moves spanning 30 industries. It aims to create uncontested market spaces to make competition irrelevant.
- Blue ocean strategy covers both formulation and execution of strategy. It offers frameworks and tools to make blue ocean strategy a structured and learnable system.
- Blue ocean strategy involves exploring outside of traditional industry boundaries using the "Six Paths" framework to unlock new value and opportunities. Case studies are presented to illustrate how companies have achieved blue ocean strategy.
The document discusses the Microfridge product, which combines a refrigerator, freezer, and microwave. It is targeted at institutional living situations like colleges, military bases, and hotels/motels. The main markets in 1994 were colleges (55% of revenue), military (25%), and motels (18%). Microfridge faced medium competition but had patent protection. It acquired another company and replaced refrigerators with Microfridge units. While using two suppliers reduced costs, it created compatibility issues. Microfridge planned to focus on new "home away from home" products, rapidly increase sales, get $4M in equity, and repay debt to withstand future competition. Recommendations included innovating for new markets, focused product development, and exploring new
Segmentation, Targeting & Positioning of Coca-ColaManas Dhibar
* Segmentation comprises identifying the market to be segmented; identification, selection, and application of bases to be used in that segmentation; and development of profiles.
* Targeting is the process of identifying the most attractive segments from the segmentation stage, usually the ones most profitable for the business.
* Positioning is the final process and is the more business-orientated stage, where the business must assess its competitive advantage and position itself in the consumer's minds to be the more attractive option in these categories.
The carbonated soft drink (CSD's) industry was dominated by Coca Cola and Pepsi vying for market share. The CSD organizations gained market share in the U.S. and in global markets extending their brands’ recognition and capturing sales from new markets. The shift in consumer beverage preference and the expansion into global markets proved to uncover new opportunities for growth and profitability. In addition the changes in the organizational structure of business for these companies have allowed them to sustain growth beyond CSD’s.
This document provides an overview of Harley-Davidson's history and operations. It discusses how the company was founded in 1903 in Wisconsin and became a leading American motorcycle manufacturer. It also outlines Harley-Davidson's mission and brand positioning. The document analyzes the company's competitive position in various markets and pricing strategy. It considers ways Harley-Davidson can improve its market share and reduce price pressures, such as expanding into new markets and customization options.
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.
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
The document discusses Aqualisa's Quartz shower valve which was intended to improve on existing shower technologies but struggled initially. It provides details on the UK shower market, Aqualisa's distribution channels, and the development of the Quartz valve. While the Quartz valve had technological advantages, plumbers were wary of innovation and it was priced too high. As a result, few units sold in the first few months through trade shops and showrooms.
This document provides information about SK-II's case study and marketing strategy in Thailand. It targets women ages 20-50 with a disposable income between 20,000-200,000 THB. SK-II is perceived as a high-quality, premium brand known for whitening skin, which aligns with Asian beauty standards. It launched in Thailand in 2003 and gained popularity through brand ambassadors and social events. SK-II's success is attributed to its signature pitera ingredient, appealing to Thailand's preference for fair skin, and heavy advertising investments.
Colgate-Palmolive Company: The Precision Toothbrush Case StudyUttaravalli Abhinav
Colgate-Palmolive developed a new toothbrush called Precision to provide better plaque removal than competitors. The Precision product manager considered whether to position it as a niche or mainstream product. Financial analysis showed greater profits from niche positioning in year 1 transitioning to mainstream in year 2. This minimized revenue losses from cannibalizing existing products. Testing found naming it "Precision" rather than "Colgate Precision" reduced cannibalization. The launch communication strategy included consumer promotions, emphasizing Precision's plaque removal, and sampling to overcome perceptions of its unusual brush head design. Dentist sampling further supported the niche launch approach.
Blue Ocean Strategy, How to Create Blue Ocean, Four Factors of Blue Ocean Strategy, Value Innovation, Cirque Du Soleil, Ford Model T, Structuralist view, Re-constructionist view, Blue Ocean Vs Red Ocean,
The document provides an analysis of Longchamp and its iconic Le Pliage bag. It begins with background on Longchamp's history and operations. A SWOT analysis is then given for Longchamp and its competitors Louis Vuitton, Michael Kors, and Coach. An external analysis using Porter's 5 Forces is also presented. Financial information for Longchamp and competitors is reviewed. Recommendations are made to manage Le Pliage's status through customization and a men's line. Improving the customer experience through retail changes is also suggested. Implementation strategies are outlined for the recommendations.
The document discusses Castrol India's plans to expand sales of its MCO 4T motorcycle oil in India. It notes that currently Castrol supplies only 2.5 million liters of MCO 4T per year, far less than market demand. It also analyzed distribution channels and market potential forecasts, finding that the non-franchised workshop segment has the highest growth potential. The document concludes by outlining Castrol's current vs. future projected market shares across different sales channels as it works to expand MCO 4T supply to meet more of the growing demand in India.
1) The document analyzes the fuel station forecasting and inventory management practices of Agarwal Automobiles, an authorized fuel station in India.
2) It identifies weaknesses in the current approach, which does not use formal analytical techniques for ordering and inventory policies.
3) Recommendations include developing a forecasting model and inventory management system to increase efficiency and profits.
The document discusses the concepts of blue ocean strategy from the book by W. Chan Kim and Renee Mauborgne. It provides details on:
1. The difference between red ocean and blue ocean strategies, where red oceans refer to competing in existing markets and blue oceans create new market space.
2. The core principles of blue ocean strategy including reconstructing market boundaries, reaching beyond existing demand, and getting the strategic sequence right by focusing on value innovation first.
3. An example of a double degree MBA-JD program between De La Salle University and Far Eastern University that created a new blue ocean by eliminating unnecessary subjects and reducing time/costs to complete both degrees.
This case study is a great example of how Companies uses Strategic Management as the principle while forming any strategy for their business. It also showed how Apple, Kellogg's & Skoda used strategic management priciples like aims & objectives, planning & organizing, communication, different matrixes (BCG, GE9) to overcome all the hurdles and reach new heights.
Preserve the Luxury or Extend the BrandSameer Mathur
This case study examines the debate around whether the famous Château de Vallois wine estate in Bordeaux, France should preserve its luxury brand or extend into a lower-priced branded wine market. The estate has been family-owned for generations and is known for its high-quality, expensive Grand Vin wine. However, Claire, one of the owners, wants to introduce a lower-priced branded wine to attract younger consumers. The estate manager François argues they should preserve their luxury reputation and not risk damaging relations with their distributors. They also lack the resources and expertise for a new branded wine business. Both sides present arguments around the costs, benefits and risks of entering the new market segment.
Ray-Ban sunglasses were created in 1937 and originally made for pilots protection. In 1999, Bausch & Lomb sold Ray-Ban to Luxottica Group for $1.2 billion. Ray-Ban offers a variety of styles from different decades with Aviators and Wayfarers as top sellers. A S.W.O.T. analysis shows Ray-Ban's strengths are its long-standing brand recognition and quality, while weaknesses include high cost. Opportunities exist in brand expansion and awareness of protective lenses, while threats include cheaper imitation sunglasses and economic downturns reducing luxury purchases. The target market is men and women aged 18-34 who value active lifestyles and individual self-expression
Kanpur Confectionaries Private Limited (KCPL) is a biscuit manufacturing company that was once successful but is now struggling with increased competition and underproduction. It is considering various options to return to profitability, including accepting a contract manufacturing offer from a competitor or focusing on supplying canteens. The best option is determined to be focusing on canteens as it satisfies the company's objectives of eliminating losses, maintaining brand identity, and adhering to family principles, while also providing opportunity for growth. An action plan is outlined to target premier institutes and increase KCPL's low market share of canteen demand.
This document discusses various ocean strategies including red, blue, purple and green ocean strategies. It summarizes the key aspects of each strategy:
1) Red ocean strategies involve cutthroat competition in existing industries while blue ocean strategies create new market space and make competition irrelevant.
2) Purple ocean strategies recognize that blue ocean strategies may eventually become red as competition emerges, so both innovative and competitive strategies are needed long-term.
3) Green ocean strategies focus on maximizing internal resources and commitments rather than copying competitors, staying closer to shore for less risk.
Blue green red and purple ocean strategySajna Fathima
The document discusses various ocean strategies including blue ocean strategy, red ocean strategy, purple ocean strategy, and green ocean strategy. Blue ocean strategy focuses on creating new market space rather than competing, while red ocean strategy involves competing head-to-head in existing markets. Purple ocean strategy acknowledges that blue oceans will eventually become red as competition increases, so both innovative and competitive strategies are needed. Green ocean strategy focuses on maximizing internal resources rather than copying competitors or pursuing risky growth.
This document discusses the concept of blue ocean strategy, which focuses on creating new market space and making competition irrelevant. It provides an overview of key aspects of blue ocean strategy:
- Blue ocean strategy is based on over a decade of research studying over 150 strategic moves spanning 30 industries. It aims to create uncontested market spaces to make competition irrelevant.
- Blue ocean strategy covers both formulation and execution of strategy. It offers frameworks and tools to make blue ocean strategy a structured and learnable system.
- Blue ocean strategy involves exploring outside of traditional industry boundaries using the "Six Paths" framework to unlock new value and opportunities. Case studies are presented to illustrate how companies have achieved blue ocean strategy.
The document discusses the Microfridge product, which combines a refrigerator, freezer, and microwave. It is targeted at institutional living situations like colleges, military bases, and hotels/motels. The main markets in 1994 were colleges (55% of revenue), military (25%), and motels (18%). Microfridge faced medium competition but had patent protection. It acquired another company and replaced refrigerators with Microfridge units. While using two suppliers reduced costs, it created compatibility issues. Microfridge planned to focus on new "home away from home" products, rapidly increase sales, get $4M in equity, and repay debt to withstand future competition. Recommendations included innovating for new markets, focused product development, and exploring new
Segmentation, Targeting & Positioning of Coca-ColaManas Dhibar
* Segmentation comprises identifying the market to be segmented; identification, selection, and application of bases to be used in that segmentation; and development of profiles.
* Targeting is the process of identifying the most attractive segments from the segmentation stage, usually the ones most profitable for the business.
* Positioning is the final process and is the more business-orientated stage, where the business must assess its competitive advantage and position itself in the consumer's minds to be the more attractive option in these categories.
The carbonated soft drink (CSD's) industry was dominated by Coca Cola and Pepsi vying for market share. The CSD organizations gained market share in the U.S. and in global markets extending their brands’ recognition and capturing sales from new markets. The shift in consumer beverage preference and the expansion into global markets proved to uncover new opportunities for growth and profitability. In addition the changes in the organizational structure of business for these companies have allowed them to sustain growth beyond CSD’s.
This document provides an overview of Harley-Davidson's history and operations. It discusses how the company was founded in 1903 in Wisconsin and became a leading American motorcycle manufacturer. It also outlines Harley-Davidson's mission and brand positioning. The document analyzes the company's competitive position in various markets and pricing strategy. It considers ways Harley-Davidson can improve its market share and reduce price pressures, such as expanding into new markets and customization options.
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.
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
The document discusses Aqualisa's Quartz shower valve which was intended to improve on existing shower technologies but struggled initially. It provides details on the UK shower market, Aqualisa's distribution channels, and the development of the Quartz valve. While the Quartz valve had technological advantages, plumbers were wary of innovation and it was priced too high. As a result, few units sold in the first few months through trade shops and showrooms.
This document provides information about SK-II's case study and marketing strategy in Thailand. It targets women ages 20-50 with a disposable income between 20,000-200,000 THB. SK-II is perceived as a high-quality, premium brand known for whitening skin, which aligns with Asian beauty standards. It launched in Thailand in 2003 and gained popularity through brand ambassadors and social events. SK-II's success is attributed to its signature pitera ingredient, appealing to Thailand's preference for fair skin, and heavy advertising investments.
Colgate-Palmolive Company: The Precision Toothbrush Case StudyUttaravalli Abhinav
Colgate-Palmolive developed a new toothbrush called Precision to provide better plaque removal than competitors. The Precision product manager considered whether to position it as a niche or mainstream product. Financial analysis showed greater profits from niche positioning in year 1 transitioning to mainstream in year 2. This minimized revenue losses from cannibalizing existing products. Testing found naming it "Precision" rather than "Colgate Precision" reduced cannibalization. The launch communication strategy included consumer promotions, emphasizing Precision's plaque removal, and sampling to overcome perceptions of its unusual brush head design. Dentist sampling further supported the niche launch approach.
Blue Ocean Strategy, How to Create Blue Ocean, Four Factors of Blue Ocean Strategy, Value Innovation, Cirque Du Soleil, Ford Model T, Structuralist view, Re-constructionist view, Blue Ocean Vs Red Ocean,
The document provides an analysis of Longchamp and its iconic Le Pliage bag. It begins with background on Longchamp's history and operations. A SWOT analysis is then given for Longchamp and its competitors Louis Vuitton, Michael Kors, and Coach. An external analysis using Porter's 5 Forces is also presented. Financial information for Longchamp and competitors is reviewed. Recommendations are made to manage Le Pliage's status through customization and a men's line. Improving the customer experience through retail changes is also suggested. Implementation strategies are outlined for the recommendations.
The document discusses Castrol India's plans to expand sales of its MCO 4T motorcycle oil in India. It notes that currently Castrol supplies only 2.5 million liters of MCO 4T per year, far less than market demand. It also analyzed distribution channels and market potential forecasts, finding that the non-franchised workshop segment has the highest growth potential. The document concludes by outlining Castrol's current vs. future projected market shares across different sales channels as it works to expand MCO 4T supply to meet more of the growing demand in India.
1) The document analyzes the fuel station forecasting and inventory management practices of Agarwal Automobiles, an authorized fuel station in India.
2) It identifies weaknesses in the current approach, which does not use formal analytical techniques for ordering and inventory policies.
3) Recommendations include developing a forecasting model and inventory management system to increase efficiency and profits.
The document discusses the concepts of blue ocean strategy from the book by W. Chan Kim and Renee Mauborgne. It provides details on:
1. The difference between red ocean and blue ocean strategies, where red oceans refer to competing in existing markets and blue oceans create new market space.
2. The core principles of blue ocean strategy including reconstructing market boundaries, reaching beyond existing demand, and getting the strategic sequence right by focusing on value innovation first.
3. An example of a double degree MBA-JD program between De La Salle University and Far Eastern University that created a new blue ocean by eliminating unnecessary subjects and reducing time/costs to complete both degrees.
This case study is a great example of how Companies uses Strategic Management as the principle while forming any strategy for their business. It also showed how Apple, Kellogg's & Skoda used strategic management priciples like aims & objectives, planning & organizing, communication, different matrixes (BCG, GE9) to overcome all the hurdles and reach new heights.
Preserve the Luxury or Extend the BrandSameer Mathur
This case study examines the debate around whether the famous Château de Vallois wine estate in Bordeaux, France should preserve its luxury brand or extend into a lower-priced branded wine market. The estate has been family-owned for generations and is known for its high-quality, expensive Grand Vin wine. However, Claire, one of the owners, wants to introduce a lower-priced branded wine to attract younger consumers. The estate manager François argues they should preserve their luxury reputation and not risk damaging relations with their distributors. They also lack the resources and expertise for a new branded wine business. Both sides present arguments around the costs, benefits and risks of entering the new market segment.
Ray-Ban sunglasses were created in 1937 and originally made for pilots protection. In 1999, Bausch & Lomb sold Ray-Ban to Luxottica Group for $1.2 billion. Ray-Ban offers a variety of styles from different decades with Aviators and Wayfarers as top sellers. A S.W.O.T. analysis shows Ray-Ban's strengths are its long-standing brand recognition and quality, while weaknesses include high cost. Opportunities exist in brand expansion and awareness of protective lenses, while threats include cheaper imitation sunglasses and economic downturns reducing luxury purchases. The target market is men and women aged 18-34 who value active lifestyles and individual self-expression
Kanpur Confectionaries Private Limited (KCPL) is a biscuit manufacturing company that was once successful but is now struggling with increased competition and underproduction. It is considering various options to return to profitability, including accepting a contract manufacturing offer from a competitor or focusing on supplying canteens. The best option is determined to be focusing on canteens as it satisfies the company's objectives of eliminating losses, maintaining brand identity, and adhering to family principles, while also providing opportunity for growth. An action plan is outlined to target premier institutes and increase KCPL's low market share of canteen demand.
This document discusses various ocean strategies including red, blue, purple and green ocean strategies. It summarizes the key aspects of each strategy:
1) Red ocean strategies involve cutthroat competition in existing industries while blue ocean strategies create new market space and make competition irrelevant.
2) Purple ocean strategies recognize that blue ocean strategies may eventually become red as competition emerges, so both innovative and competitive strategies are needed long-term.
3) Green ocean strategies focus on maximizing internal resources and commitments rather than copying competitors, staying closer to shore for less risk.
Blue green red and purple ocean strategySajna Fathima
The document discusses various ocean strategies including blue ocean strategy, red ocean strategy, purple ocean strategy, and green ocean strategy. Blue ocean strategy focuses on creating new market space rather than competing, while red ocean strategy involves competing head-to-head in existing markets. Purple ocean strategy acknowledges that blue oceans will eventually become red as competition increases, so both innovative and competitive strategies are needed. Green ocean strategy focuses on maximizing internal resources rather than copying competitors or pursuing risky growth.
This document summarizes the key concepts from the book "Blue Ocean Strategy" by W. Chan Kim and Renée Mauborgne. It describes blue ocean strategy as creating uncontested market space ("blue oceans") to make competition irrelevant. Companies can succeed not by battling competitors but by creating new demand through value innovation. Examples provided include Cirque du Soleil blending circus and performances to create a new market. The document also outlines criticisms that finding completely uncontested markets is difficult and marketing execution is underemphasized in the blue ocean strategy approach.
This document summarizes a webinar about Blue Ocean Strategy presented by the Harvard Business School Club of Washington DC. The webinar discussed how Blue Ocean Strategy allows entrepreneurs to create new market space without competition by modifying their business model, product/service offering, target market, and strategy implementation. Specific tools from Blue Ocean Strategy discussed include the Four Actions Framework, ERRC Grid, Strategy Canvas, and focusing on non-customers to unlock new demand. The presenters aimed to help university startup competition participants apply these Blue Ocean Strategy concepts and tools to their ventures.
Blue ocean strategy involves creating new market space and making competitors irrelevant by exploring uncontested markets. It focuses on value innovation to create products or services that are superior to existing offerings. The key principles of blue ocean strategy are reconstructing market boundaries, focusing on the big picture rather than numbers, going beyond existing demand, and getting the strategic sequence right. Blue ocean strategy aims to create future demand and customers in a market where competition is currently non-existent.
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 document discusses the concepts of red oceans and blue oceans in business strategy. Red oceans represent existing industries that are crowded with competition, while blue oceans represent new market spaces that are currently unknown or nonexistent. The key to creating blue oceans is making strategic moves that increase value in new ways, such as differentiating a product or service unlike anything customers have seen before. Successful blue ocean strategies can create brand loyalty and barriers to imitation that allow companies to expand their new markets for decades to come.
Value innovation creates favorable impacts on both cost structure and value proposition to buyers. It reduces costs by eliminating unnecessary industry factors and lifts buyer value by creating new elements the industry has never offered before. Over time, costs are reduced further through scale economies generated by superior value. Red ocean strategy competes in existing market space while blue ocean strategy creates uncontested market space to make competition irrelevant. The six principles of blue ocean strategy are reconstructing market boundaries, focusing on the big picture, reaching beyond existing demand, getting the strategic sequence right, overcoming organizational hurdles, and building execution into strategy.
The document discusses blue ocean strategy and provides several key concepts:
1. It compares red ocean strategy, which focuses on competition, to blue ocean strategy which creates new market space and makes competition irrelevant.
2. Value innovation, pursuing differentiation and low cost simultaneously to create value for buyers and the company, is the cornerstone of blue ocean strategy.
3. The strategy canvas tool is used to analyze current industry factors and identify which to eliminate, reduce, raise, and create to shift to an uncontested blue ocean.
4. Pioneer-migrator-settler maps are used to plot current and planned business offerings to identify blue ocean strategic moves as pioneers in new markets.
In this presentation, we will introduce the concept of “Blue Ocean Strategy”, to help you understand and gain a strong foothold in online competitive market place.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
Blue Ocean Strategy provides a framework for creating new market space and making competition irrelevant. It is based on over 150 case studies spanning 100 years. The framework involves reconstructing market boundaries, focusing on the big picture rather than numbers, reaching beyond existing demand, and getting the strategic sequence right. Key tools include the strategy canvas for analyzing competitive factors and the ERRC grid for increasing customer value through eliminating, reducing, raising, and creating factors. While the tools offer value, executing blue ocean strategies within existing companies faces significant organizational hurdles.
The document discusses blue ocean strategy and how to create uncontested markets. It introduces value innovation as a new way of thinking that results in creating a blue ocean and breaking from competition. It presents the four actions framework to break trade-offs between differentiation and low cost by answering four questions about eliminating, reducing, raising, and creating new factors. Finally, it lists focus, divergence, and a compelling tagline as key characteristics of blue ocean strategy.
Unit 8 Red blue purple ocean strategy.ppt.pptxSidGhase
This document discusses different ocean strategies for organizational development and sustainability. It describes red ocean strategy, where competition is intense within existing market boundaries. Examples include the smartphone industry. Blue ocean strategy creates new market space by offering innovative products/services that make competition irrelevant. Purple ocean strategy combines strengths of red and blue by introducing unique innovations in existing markets to disrupt competition.
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.
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.
The document summarizes the key concepts from the book Blue Ocean Strategy, which discusses how companies can create new market space and make competition irrelevant. It outlines the difference between red and blue ocean strategies, and tools like the strategy canvas and four action framework. Examples are given of companies like Cirque du Soleil and Southwest Airlines that created blue oceans. Principles for formulating a blue ocean strategy include reconstructing market boundaries and focusing on the big picture rather than numbers. Overcoming organizational hurdles is important for execution.
Blue ocean strategy refers to creating a new market space where there is little or no competition. It aims to capture new demand by introducing products with superior features that make competition irrelevant. The key aspects of blue ocean strategy are to create uncontested market space, make the competition irrelevant, capture new demand, and break the value-cost tradeoff. In contrast, red ocean strategy focuses on competing in existing markets to beat competition and exploit existing demand through a value-cost tradeoff.
Blue Ocean Strategy argues that lasting business success comes not from competing head-to-head in existing industries, but from creating "blue oceans" of untapped new market space. It provides a systematic four-step process to reconstruct market boundaries so that competition becomes irrelevant. The strategy is based on a decade of research analyzing over 150 strategic moves across 30 industries, and offers tools to help companies differentiate, lower costs, and create uncontested market space for profitable growth.
This document defines and compares blue ocean and red ocean strategies. Blue ocean strategy involves creating new, uncontested market space through value innovation and reconstructing industry boundaries. It aims to create new demand and customers. Advantages include high profits in a new market but it can become red over time. Red ocean strategy involves competing in existing markets through low cost or differentiation. The market is established but competition is fierce with low growth opportunities. Overall, blue ocean focuses on creating new markets while red ocean competes within existing industry boundaries.
National Foods is a Pakistani food company that produces over 110 products across 13 categories. It was founded in McCormick, USA. The company uses various analytical frameworks like PESTEL analysis, Porter's Five Forces, and SWOT analysis to evaluate its macroenvironment, microenvironment, and competitive position. National Foods targets various consumer segments in Pakistan and abroad based on age. It employs integrated marketing strategies including advertising, personal selling, sales promotion, and public relations.
The slides portrays a research conducted, which enlightens the unique perspectives of two distinctive organizations (Schlumberger and Meezan Bank) w.r.t conflict management and resolution. On that note, primary research is undertaken to elicit the responses of eminent job holders of either organizations as to conflict management and resolution.
Internationalization of shahnawaz limitedMuhammad Saad
The slides endeavor to internationalize a very lucrative Pakistani organization towards Bangladesh. It comprises of all the steps which an organization must go through on its way towards internationalization from a developing nation like Pakistan.
The slides present a Entrepreneurial Business Plan amidst the capital city of Pakistan. It consists of all the ins and out of establishing the business alongside with its pro forma financial statements per ante.
The slides guide the rationales behind the sluggishness or laid-back nature of job holders; it invokes a study of a famous author as as to substantiate its claims.
Slides attempts to solve the dynacorp case study; it contains many subtle aspects that have a strong bearing in understanding leadership under contemporary conditions.
The Body Shop operates over 2,500 stores worldwide selling cosmetics and body care products. It was founded in 1976 and is now part owned by L'Oreal. The Body Shop started operations in Pakistan in 2006 and operates in four major cities. It uses natural ingredients and is against animal testing. To increase sales in Pakistan, the Body Shop should launch TV advertisements, educate customers on product uses, expand to more cities, offer marketing campaigns and discounts to attract a broader customer base. Feedback on this summary is welcome.
Google Ads Vs Social Media Ads-A comparative analysisakashrawdot
Explore the differences, advantages, and strategies of using Google Ads vs Social Media Ads for online advertising. This presentation will provide insights into how each platform operates, their unique features, and how they can be leveraged to achieve marketing goals.
Build marketing products across the customer journey to grow your business and build a relationship with your customer. For example you can build graders, calculators, quizzes, recommendations, chatbots or AR apps. Things like Hubspot's free marketing grader, Moz's site analyzer, VenturePact's mobile app cost calculator, new york times's dialect quiz, Ikea's AR app, L'Oreal's AR app and Nike's fitness apps. All of these examples are free tools that help drive engagement with your brand, build an audience and generate leads for your core business by adding value to a customer during a micro-moment.
Key Takeaways:
Learn how to use specific GPTs to help you Learn how to build your own marketing tools
Generate marketing ideas for your business How to think through and use AI in marketing
How AI changes the marketing game
Unlock the secrets to enhancing your digital presence with our masterclass on mastering online visibility. Learn actionable strategies to boost your brand, optimize your social media, and leverage SEO. Transform your online footprint into a powerful tool for growth and engagement.
Key Takeaways:
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Lily Ray - Optimize the Forest, Not the Trees: Move Beyond SEO Checklist - Mo...Amsive
Lily Ray, Vice President of SEO Strategy & Research at Amsive, explores optimizing strategies for sustainable growth and explores the impact of AI on the SEO landscape.
Conferences like DigiMarCon provide ample opportunities to improve our own marketing programs by learning from others. But just because everyone is jumping on board with the latest idea/tool/metric doesn’t mean it works – or does it? This session will examine the value of today’s hottest digital marketing topics – including AI, paid ads, and social metrics – and the truth about what these shiny objects might be distracting you from.
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Mastering Local SEO for Service Businesses in the AI Era"" is tailored specifically for local service providers like plumbers, dentists, and others seeking to dominate their local search landscape. This session delves into leveraging AI advancements to enhance your online visibility and search rankings through the Content Factory model, designed for creating high-impact, SEO-driven content. Discover the Dollar-a-Day advertising strategy, a cost-effective approach to boost your local SEO efforts and attract more customers with minimal investment. Gain practical insights on optimizing your online presence to meet the specific needs of local service seekers, ensuring your business not only appears but stands out in local searches. This concise, action-oriented workshop is your roadmap to navigating the complexities of digital marketing in the AI age, driving more leads, conversions, and ultimately, success for your local service business.
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In the face of the news of Google beginning to remove cookies from Chrome (30m users at the time of writing), there’s no longer time for marketers to throw their hands up and say “I didn’t know” or “They won’t go through with it”. Reality check - it has already begun - the time to take action is now. The good news is that there are solutions available and ready for adoption… but for many the race to catch up to the modern internet risks being a messy, confusing scramble to get back to "normal"
This session will aim to comprehensively review the current state of artificial intelligence techniques for emotional recognition and their potential applications in optimizing digital advertising strategies. Key studies developing AI models for multimodal emotion recognition from videos, images, and neurophysiological signals were analyzed to build content for this session. The session delves deeper into the current challenges, opportunities to help realize the full benefits of emotion AI for personalized digital marketing.
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The Strategic Impact of Storytelling in the Age of AI
In the grand tapestry of marketing, where algorithms analyze data and artificial intelligence predicts trends, one essential thread remains constant — the timeless art of storytelling. As we stand on the precipice of a new era driven by AI, join me in unraveling the narrative alchemy that transforms brands from mere entities into captivating tales that resonate across the digital landscape. In this exploration, we will discover how, in the face of advancing technology, the human touch of a well-crafted story becomes not just a marketing tool but the very essence that breathes life into brands and forges lasting connections with our audience.
The digital marketing industry is changing faster than ever and those who don’t adapt with the times are losing market share. Where should marketers be focusing their efforts? What strategies are the experts seeing get the best results? Get up-to-speed with the latest industry insights, trends and predictions for the future in this panel discussion with some leading digital marketing experts.
Dive deep into the cutting-edge strategies we're employing to revolutionize our web presence in the age of AI-driven search. As Gen Z reshapes the digital realm, discover how we can bridge the generational divide. Unlock the synergistic power of PPC, social media, and SEO, driving unparalleled revenues for our projects.
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Myself Janani Digital marketing consultant located in coimbatore I offer all kinds of digital marketing services for your business requirements such as SEO SMO SMM SMO CAMPAIGNS content writing web design for all your business needs with affordable cost
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With Regards
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As 2023 proved, the next few years may be shaped by market volatility and artificial intelligence services such as OpenAI's ChatGPT and Perplexity.ai. Your brand will increasingly compete for attention with Google, Apple, OpenAI, and Amazon, and customers will expect a hyper-relevant and individualized experience from every business at any moment. New state-legislated data privacy laws and several FTC rules may challenge marketers to deliver contextually relevant customer experiences, much less reach unknown prospective buyers. Are you ready?Let's discuss the critical need for data governance and applied AI for your business rather than relying on public AI models. As AI permeates society and all industries, learn how to be future-ready, compliant, and confidentlyscaling growth.
Key Takeaways:
Primary Learning Objective
1: Grasp when artificial general intelligence (""AGI"") will arrive, and how your brand can navigate the consequences. Primary Learning Objective
2: Gain an accurate analysis of the continuously developing customer journey and business intelligence. Primary Learning Objective
3: Grow revenue at lower costs with more efficient marketing and business operations.
2. Introduction:
• 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.
3. New Market Space
• The only way to beat the competition is to stop trying to beat
the competition.
• Two sorts of oceans: Red oceans and Blue oceans.
• However, there is little practical guidance on how to create
them.
• Creating blue oceans has remained wishful thinking that is
seen as too risky for managers to pursue as strategy.
4. The Continuing Creation of
Blue Oceans
• Look back one hundred years and ask yourself, How many of
today’s industries were then unknown?
• In blue oceans, competition is irrelevant because the rules of
the game are waiting to be set.
• To seize new profit and growth opportunities, they also need
to create blue oceans.
• The reality is that industries never stand still. They
continuously evolve.
5.
6. The Rising Imperative of
Creating Blue Oceans
• Accelerated technological advances have substantially
improved industrial productivity and have allowed suppliers to
produce an unprecedented array of products and services.
• The trend toward globalization
• Global competition intensifies
• Accelerated commoditization of products and services,
increasing price wars, and shrinking profit margins.
7. From Company and Industry to
Strategic Move
• The business literature typically uses the company as the basic
unit of analysis.
• It appears, then, that neither the company nor the industry is
the best unit of analysis in studying the roots of profitable
growth.
• The study shows that the Strategic move, and not the
company or the industry, is the right unit of analysis for
explaining the creation of blue oceans and sustained high
performance.
8. What is strategic move?
• A strategic move is the set of managerial actions and decisions
involved in making a major market-creating business offering.
9. Value Innovation: The
Cornerstone of Blue Ocean
Strategy
• The creators of blue oceans, surprisingly, didn’t use the
competition as their benchmark.
• Instead, they followed a different strategic logic that we call
value innovation.
• Value innovation places equal emphasis on value and
innovation.
• Value innovation occurs only when companies align innovation
with utility, price, and cost positions.
10. Continues…..
• Value innovation is a new way of thinking about and executing
strategy that results in the creation of a blue ocean and a break from
the competition.
• It defies one of the most commonly accepted dogmas of
competition-based strategy the value-cost trade-off.
• It seeks to create blue oceans pursue differentiation and low cost
simultaneously.
• Return to the example of Cirque du Soleil.
• creating a circus with even greater fun and thrills.
• This led to a whole new circus concept that broke the value-cost
trade-off.
11.
12. Continues……..
• Cirque du Soleil has dramatically increased demand.
• The creation of blue oceans is about driving costs down while
simultaneously driving value up for buyers.
• Blue ocean strategy integrates the range of a firm’s functional
and operational activities.
• Value innovation requires companies to orient the whole
system toward achieving a leap in value for both buyers and
themselves.
13.
14. Formulating and Executing
Blue Ocean Strategy
• How to succeed in blue oceans?
• How can companies systematically maximize the opportunities
while simultaneously minimizing the risks of formulating and
executing blue ocean strategy?
15.
16. Analytical Tool and
Frameworks
• Effective blue ocean strategy should be about risk minimization and
not risk taking.
• The tools and frameworks are used in the six principles of
formulating and executing blue ocean strategy.
• How do you break out of this red ocean of bloody competition to
make the competition irrelevant?
• How do you open up and capture a blue ocean of uncontested
market space?
• To address these questions, we turn to the strategy canvas, an
analytic framework that is central to value innovation and the creation
blue oceans.
17. The Strategy Canvas
• The strategy canvas is both a diagnostic and an action
framework for building a compelling blue ocean strategy.
• The strategy canvas is both a diagnostic and an action
framework for building a compelling blue ocean strategy.
• 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
18.
19. Continues….
• The value curve, the basic component of the strategy canvas,
is a graphic depiction of a company’s relative performance
across its industry’s factors of competition.
• your strategic focus from competitors to alternatives, and
from customers to noncustomers of the industry.
20. The Four Actions Framework
• To reconstruct buyer value elements in crafting a new value curve,
we have developed the four actions framework.
• To break the trade-off between differentiation and low cost and to
create a new value curve, there are four key questions to challenge
an industry’s strategic logic and business model.
• Which of the factors that the industry takes for granted
should be eliminated?
• Which factors should be reduced well below the industry’s
standard?
• Which factors should be raised well above the industry’s
standard?
• Which factors should be created that the industry has never
offered?
21.
22. • Casella Wines created [yellow tail], a wine whose strategic
profile broke from the competition and created a blue ocean.
• Casella created a social drink accessible to everyone: beer
drinkers, cocktail drinkers, and other drinkers of non wine
beverages.
• In the space of two years, the fun, social drink [yellow tail]
emerged as the fastest growing brand in the histories of both
the Australian and the U.S. wine industries and the number
one imported wine into the United States, surpassing the
wines of France and Italy.
23.
24.
25.
26. Three Characteristics of a Good
Strategy
• the company should have three complementary qualities:
focus, divergence, and a compelling tagline.
• focus; the company does not diffuse its efforts across all key
factors of competition.
• The shape of its value curve diverges from the other players’, a
result of not benchmarking competitors but instead looking
across alternatives.
• The tagline of the company is clear: a fun and simple wine to
be enjoyed every day.
27. Southwest Airlines (Blue Ocean)
• Southwest Airlines created a blue ocean by breaking the
trade-offs customers had to make between the speed of
airplanes and the economy and flexibility of car transport. T
• To achieve this, Southwest offered high-speed transport with
frequent and flexible departures at prices attractive to the
mass of buyers.
• The value curve of Southwest Airlines differs distinctively from
those of its competitors in the strategy canvas.
28.
29. Continues………
• Company emphasizes only three factors: friendly service,
speed, and frequent point-to-point departures.
• By contrast, Southwest’s traditional competitors invest in all
the airline industry’s competitive factors, making it much
more difficult for them to match Southwest’s prices.
• By applying the four actions of eliminating, reducing,
raising, and creating, they differentiate their profiles from the
industry’s average profile.
• A good tagline must not only deliver a clear message but also
advertise an offering truthfully, or else customers will lose
trust and interest. In
32. Reconstruct Market
Boundaries
• THE F I R ST PRI NCI PLE of blue ocean strategy is to
reconstruct market boundaries to break from the competition
and create blue oceans.
• They found six basic approaches to remaking market
boundaries. They call this the six paths framework.
• These paths challenge the six fundamental assumptions
underlying many companies’ strategies.
34. Continues….
• The more that companies share this conventional wisdom
• about how they compete, the greater the competitive
convergence among them.
• To break out of red oceans, companies must break out of the
accepted boundaries that define how they compete.
• They need to look across alternative industries, across
strategic groups, across buyer groups.
• This gives companies keen insight into how to reconstruct
• market realities to open up blue oceans.
35. Path 1: Look Across Alternative
Industries
• Not only with the other firms in its own industry but also with
companies in those other industries that produce alternative
products or services.
• Rarely do sellers think consciously about how their customers make
trade-offs across alternative industries.
• E.g NetJets reconstructed market boundaries to create
• this blue ocean by looking across alternative industries
• NetJets offers its customers one-sixteenth ownership of an
aircraft to be shared with fifteen other customers, each one entitled
to fifty hours of flight time per year.
36.
37. Continues…..
• NTT DoCoMo broke out of this red ocean of bloody
competition by creating a blue ocean of wireless transmission
not only of voice but also of text, data, and pictures.
• Its user friendly interface has one simple button, the i-
mode button
38. Path 2: Look Across Strategic
Groups Within Industries
• The term refers to a group of companies within an industry
• that pursue a similar strategy.
• Strategic groups can generally be ranked in a rough
hierarchical order built on two dimensions: price and
performance.
• The key is to break out of this narrow tunnel vision by
understanding which factors determine customers’ decisions
to trade up or down from one group to another
39. Curves:
• Consider Curves, the Texas-based women’s fitness company.
• Since franchising began in 1995.
• The growth was triggered almost entirely through word of
mouth and buddy referrals.
• unlocking a huge untapped market, a veritable blue ocean of
women struggling and failing to keep in shape through sound
fitness.
• Curves has eliminated all the aspects of the traditional
• health club that are of little interest to the broad mass of
• women.
40.
41. Path 3: Look Across the Chain
of Buyers
• The purchasers who pay for the product or service may differ
• from the actual users, and in some cases there are important
influencers as well.
• Individual companies in an industry often target different
customer.
• Challenging an industry’s conventional wisdom about which
• buyer group to target can lead to the discovery of new blue
ocean.
42. Path 4: Look Across Complementary
Product and Service Offerings
• Untapped value is often hidden in complementary products
and services.
• The key is to define the total solution buyers seek when
• they choose a product or service
43. Path 5: Look Across Functional or
Emotional Appeal to Buyers
• Competition in an industry tends to converge
• When companies are willing to challenge the functional emotional
orientation of their industry, they often find new market space.
• Two well-known examples are Swatch, which transformed the
• functionally driven budget watch industry into an emotionally
• driven fashion statement
• The Body Shop, which did the reverse,
• transforming the emotionally driven industry of cosmetics into a
• functional, no-nonsense cosmetics house.
44. Path 6: Look Across Time
• All industries are subject to external trends that affect their
businesses over time.
• Looking at these trends with the right perspective can show
you how to create blue ocean opportunities.
• Most companies adapt incrementally and somewhat passively
as events unfold.
47. Focus on the Big Picture,
Not the Numbers
• How do you align your strategic planning process to focus on
the big picture and apply these ideas in drawing your
company’s strategy canvas to arrive at a blue ocean strategy?
• This principle is key to mitigating the planning risk of investing
lots of effort and lots of time but delivering only tactical red
ocean moves.
• building a company’s strategic planning process around a
• strategy canvas,
• focus their main attention on the big picture rather than
becoming immersed in numbers and jargon and getting
caught up in operational details
48.
49. Step 1: Visual Awakening
• A common mistake is to discuss changes in strategy before
resolving differences of opinion about the current state of
play.
• Executives are often reluctant to accept the need for
• Change
• to draw the value curve of their company’s strategy brings
home the need for change.
50.
51. Step 2: Visual Exploration
• The next step is to send a team into the field, putting
managers face-to-face with what they must make sense of
• A company should never outsource its eyes. There is simply no
• substitute for seeing for yourself.
52. Step 3: Visual Strategy Fair
• After two weeks of drawing and redrawing, the teams
presented their strategy canvases at what we call a visual
strategy fair.
• Attendees included senior corporate executives but consisted
mainly of representatives of EFS’s external constituencies
• Managers had to rely on the originality and clarity of their
curves and their pitches.
53.
54.
55. Step 4: Visual Communication
• After the future strategy is set, the last step is to communicate
it in a way that can be easily understood by any employee.
• one-page picture showing its new and old strategic profiles
• so that every employee could see where the company stood
and where it had to focus its efforts to create a compelling
future.
56. Pioneer-Migrator-Settler (PMS)
Map
• A company’s pioneers are the businesses that offer
unprecedented value.
• These are your blue ocean strategists, and they are the most
powerful sources of profitable growth.
• The potential of migrators lies somewhere in between.
• These businesses offer improved value, but not innovative
value.
• settlers are defined as me-too businesses,
57.
58. Overcoming the Limitations
of Strategic Planning
• strategic planning should be more about collective wisdom
• building than top-down or bottom-up planning.
• it should be more about building the big picture than about
• number-crunching exercises.
• and it should be more motivational, invoking willing
commitment, than bargaining-driven, producing negotiated
commitment
60. Reach Beyond Existing
Demand
• How do you maximize the size of the blue ocean you are creating?
• Instead of concentrating on customers, they need to look to
noncustomers
• Think of Callaway Golf.
• The answer was Big Bertha, a golf club with a large head that made
it far easier to hit the golf ball.
• To reach beyond existing demand, think noncustomers before
customers; commonalities before differences; and de segmentation
before pursuing finer segmentation.
61. The Three Tiers of
Noncustomers
• There are three tiers of noncustomers that can be
transformed into customers.
• The first tier of noncustomers is closest to your market. They
sit on the edge of the market.
• The second tier of noncustomers is people who refuse to use
• your industry’s offerings.
• The third tier of noncustomers is farthest from your
market.
62.
63. First-Tier Noncustomers
• These soon-to-be noncustomers are those who minimally use
the current market offerings to get by as they search for
something better.
• Consider how Pret A Manger, a British fast-food chain
• tapping into the huge latent demand of first-tier
noncustomers.
• It offers restaurant quality sandwiches made fresh every day
from only the finest ingredients, and it makes the food
available at a speed that is faster than that of restaurants and
even fast food
64. Second-Tier Noncustomers
• They find the offerings unacceptable or beyond their means.
• Harboring within refusing noncustomers, however, is an ocean
of untapped demand waiting to be released.
• Consider how JCDecaux, a vendor of French outdoor
advertising space, pulled the mass of refusing noncustomers
into its market.
65. Third-Tier Noncustomers
• Typically, these unexplored noncustomers have not been
targeted or thought of as potential customers by any player in
the industry.
• It would drive many companies crazy to know how many third
tier noncustomers they are forfeiting.
• tooth whitening was a service provided exclusively by dentists
and not by oral care consumer-product companies.
• Oral companies they had the capability to deliver safe, high-
quality, low-cost tooth whitening solutions, and the market
exploded.
66. Go for the Biggest Catchment
• There is no hard-and-fast rule to suggest which tier of
noncustomers you should focus on and when.
• you should focus on the tier that represents the biggest
catchment at the time.
68. Get the Strategic Sequence
Right
• Get the Strategic Sequence Right to discover possible
blue oceans.
• the strategic sequence of fleshing out and validating blue
ocean ideas to ensure their commercial viability.
69.
70. Testing for Exceptional Utility
• Yet many companies fail to deliver exceptional value because
• they are obsessed by the novelty of their product or service,
• Consider Philips’ CD-i, an engineering marvel that failed to
offer people a compelling reason to buy it.
• Yet it did so many different tasks that people could not
understand how to use it.
71.
72.
73. From Exceptional Utility to
Strategic Pricing
• To secure a strong revenue stream for your offering, you must
set the right strategic price.
• It is increasingly important, however, to know from the start
what price will quickly capture the mass of target buyers.
• First, companies are discovering that volume generates higher
returns than it used to.
• A second reason is that to a buyer, the value of a product or
service may be closely tied to the total number of people
using it.
76. Overcome Key
Organizational Hurdles
• ONCE A COMPANY HAS DEVELOPED a blue ocean strategy with a
profitable business model, it must execute it.
• tough time translating thought into action whether in red or blue
oceans.
• They face four hurdles: One is cognitive: waking employees up to the
need for a strategic shift.
• The second hurdle is limited resources.
• Third is motivation. How do you motivate key players to move fast
and tenaciously to carry out a break from the status quo?
• The final hurdle is politics.
77. Tipping Point Leadership in
Action
• Tipping point leadership allows you to overcome these four
hurdles fast and at low cost while winning employees’ backing
in executing a break from the status quo.
• Tipping point leadership builds on the rarely exploited
corporate reality that in every organization, there are people,
acts, and activities that exercise a disproportionate influence
on performance.
78.
79.
80. Tipping Point Leadership
• Break Through the Cognitive Hurdle
• Meet with Disgruntled Customers
• Jump the Resource Hurdle’
• Redistribute Resources to Your Hot Spots
• Engage in Horse Trading
• Jump the Motivational Hurdle
• Zoom in on Kingpins
• Atomize to Get the Organization to Change Itself
82. Build Execution into Strategy
• A company is everyone from the top to the front lines.
• And it is only when all the members of an organization are
aligned around a strategy and support it,
• Overcoming the organizational hurdles to strategy execution is
an important step toward that end.
• To build people’s trust and commitment deep in the ranks and
inspire their voluntary cooperation, companies need to build
execution into strategy from the start.
83.
84. The Three E Principles of Fair
Process
• Engagement means involving individuals in the strategic
decisions that affect them by asking for their input
• Explanation means that everyone involved and affected
should understand why final strategic decisions are made as
they are.
• Expectation clarity requires that after a strategy is set,
managers state clearly the new rules of the game
85.
86. Conclusion: The Sustainability and
Renewal of Blue Ocean Strategy
• CREATING B LUE OCEANS is not a static achievement but a
dynamic process.
• Once a company creates a blue ocean and its powerful
performance consequences are known, sooner or later
imitators appear on the horizon.
• In this concluding chapter, they address the issues
• of the sustainability and renewal of blue ocean strategy.
Hewlett-
Packard in 2001 and ceased to be an independent company. As a result,
many people might judge the company as unsuccessful. This
does not, however, invalidate the blue ocean strategic moves that
Compaq made in creating the server industry. These strategic
moves not only were a part of the company’s powerful comeback in
the mid-1990s but also unlocked a new multibillion-dollar market
space in computing.
Customers get the convenience of a
private jet at the price of a commercial airline ticket
The company eliminated or reduced everything else. Its userfriendly
interface has one simple button, the i-mode button (i standing
for interactive, Internet, information, and the English pronoun
I), which users press to give them immediate access to the few killer
apps of the Internet.
European Financial Services (EFS) is one
of the companies that adopted this process to develop a strategy
that breaks away from the competition. The resulting EFS strategy
yielded a 30 percent revenue boost in its initial year.
To achieve this, companies should challenge two conventional
strategy practices. One is the focus on existing customers. The
other is the drive for finer segmentation to accommodate buyer differences.
To maximize the size of their blue oceans, companies need to
take a reverse course. Instead of concentrating on customers, they
need to look to noncustomers.
By looking to why people shied away from golf, it found one key
commonality uniting the mass of noncustomers: Hitting the golf
ball was perceived as too difficult.
They are waiting
to jump ship and leave the industry as soon as the opportunity
presents itself.
These are buyers who have seen your industry’s
offerings as an option to fulfill their needs but have voted
against them.
The third tier of noncustomers is farthest from your market.
They are noncustomers who have never thought of your market’s
offerings 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.