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.
Did Paul Haggis Ever Win an Oscar for Best Filmmaker
Blue Ocean Strategy - Summary and Examples
1. Blue Ocean Strategy
How to Create Uncontested Market Space
and Make the Competition Irrelevant
Facilitators : Yip Khai Biau (ymike27@hotmail.com)
& Lieu Yoke Sun
Group/Presentation Title
Agilent Restricted
Date ##, 200X
2. Blue Ocean Strategy (BOS)
Introduction to BOS
BOS Tools : Strategy Canvas & E.R.R.C.
Awakening : As-Is Strategy Canvas
Exploration : Reconstruct Market
Boundaries
Strategizing : To-Be Strategy Canvas
Actualization : Identify actions to actualize
the strategies
Conclusion
Facilitators : Yip Khai Biau (ymike27@hotmail.com)
& Lieu Yoke Sun
All Rights Reserved – KB Yip/YS Lieu Page : 2
3. Objectives
Develop understanding of Blue Ocean Tool Sets and how
to apply them effectively
Strategy Canvas
ERRC
Perform As-Is Analysis to Compare Current Strategy of XYZ
vs Competitors
Explore Pathways to Breakaway from Market Boundaries to
look for Bigger Playing Field
Brainstorm and Agree on the To-Be Strategy for XYZ
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4. Introduction to Blue Ocean Strategy
History & Background
Defining Red & Blue
Ocean
Six Principles of BOS
Reach Beyond Existing
Demand
Value Innovation
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5. History & Background
• Authored by W. Chan Kim and Renee Mauborgne in
2005.
• Based on a study of 150 strategic moves spanning
more than 100 years and 30 industries.
• BOS is the simultaneous pursuit of differentiation and
low cost.
• The aim of BOS is not to out-perform the competition
in the existing industry, but to create new market
space or a blue ocean, thereby making the
competition irrelevant.
• BOS offers systematic and reproducible
methodologies and processes in pursuit of innovation
by both new and existing firms.
• BOS frameworks and tools are designed to be visual
in order to not only effectively build the collective
wisdom of the company but also to effectively execute
through easy communication.
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6. Defining Red and Blue Ocean
What’s Red, What’s Blue?
Red Ocean Strategy Blue Ocean Strategy
•• Compete in existing market space
Compete in existing market space •• Create uncontested market space
Create uncontested market space
•• Beat the competition
Beat the competition •• Make the competition irrelevant
Make the competition irrelevant
•• Exploit existing demand
Exploit existing demand •• Create & capture new demand
Create & capture new demand
•• Make the value-cost trade off
Make the value-cost trade off •• Break the value- cost trade off
Break the value- cost trade off
•• Align strategy choice of
Align strategy choice of •• Simultaneous pursuit strategy of
Simultaneous pursuit strategy of
differentiation or low cost
differentiation or low cost differentiation and low cost
differentiation and low cost
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7. Examples of Red and Blue Ocean
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8. Six Principles of Blue Ocean Strategy
Formulation Principles Execution Principles
1. Reach beyond existing 5. Overcome key
demand organizational
2. Reconstruct market hurdles
boundaries 6. Build execution into
3. Focus on the big picture, strategy
not the numbers
4. Get the strategic
sequence right
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9. Reach Beyond Existing Demand
First Tier: “Soon-to-be” non-
customers who are on the edge of
your market, waiting to jump ship
Third
Tier
Second
First Tier Second Tier: “Refusing non-
cean
Tier customers who consciously
Yourlu
B eO choose against your market.
Market
Third Tier: “Unexplored” non
customers who are in markets
distant from yours.
Blue Ocean – Go for the Largest Catchment of Non-Customers
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10. Example – [yellow tail]
Traditional Wine : [yellow tail] :
• An elite, refined image in packaging with heavy • No jargon.Simple and nontraditional label.
use of wine terminology. • Aging is not important.
• Aging quality. • Vibrant and fun.
• Prestige of a vineyard and its legacy. • Sweeter and easier to drink.
• Complexity and sophistication of a wine’s taste, • Only one Red (Shiraz) and one White
such as tannins and oak. (Chardonnay).
• A diverse range of wines to cover all varieties
of grapes & consumer preferences
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11. Example – [yellow tail]
Tier 3 – Anyone that drinks water
Tier 1 – Wine drinker market [yellow tail] did not focus
on the wine market only
Third Third
Tier
Tier Second
Second
First Tier First Tier
Tier Tier
Your
Red Your
Market
Wine Market
X
[yellow tail] created a Blue
Ocean by making its wine
Tier 2 – “Easier to drink” market, eg.,
beer, cocktails, soft-drink
more appealing to the
bigger population
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12. Reach Beyond Existing Demand
Entertainment
Entertainment
Theater
Performance Theater
Performance
Circus
Circus
Circus
Circus
X
X
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13. Example – [Nintendo]
Electronic Game Nintendo Wii
Industry Nintendo created a Blue Ocean by
reducing the complexity, add the
ease of use and fun!
Everyone Everyone
Girls Else Girls Else
Other Other
Males Males
Young Young
Antisocial Antisocial
Males Males
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14. Value Innovation – The Cornerstone of BOS
Value innovation places equal emphasis on value and innovation.
Value innovation is a new way of thinking about and executing strategy that
results in the creation of a blue ocean.
The creation of blue oceans is about driving costs down while simultaneously
driving value up for buyers.
Cost Cost Saving – Eliminate &
Reduce Competing Factors
Value
Innovation
Buyer Value Lifted – Raise
Buyer Value
& Create New Elements Back
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15. Blue Ocean Strategy Tools
Strategy Canvas
Eliminate-Reduce-Raise-Create
(ERRC) Grid
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16. What is Strategy Canvas?
Degree of which each competitor Value Curves
offers/invests in each factor
High
Competitor 1 Factors that
the industry
Offering Level
Competitor 2 competes &
Mid
invests, also
potential
Your Company
areas where
customer
Low
Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7 Factor 8 value could be
Competing Factors created.
Graphical Representation of Strategy
+
Big Picture View
+
Landscape Scanning
+
Relative Positioning vs. Competitors
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17. 4 Actions Framework
Strategically
Reduce Cost
Reduce
Which factors should be
reduced well below the
industry's standard?
Eliminate Raise
A New
A New
Which of the factors that Which factors should be
the industry takes for
Value
Value raised well above the
granted should be Curve
Curve industry's
eliminated?
Strategically
Create Invest in
Which factors should be
created that the industry
has never offered?
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18. Eliminate-Reduce-Raise-Create
(ERRC) Grid
Eliminate Raise
Reduce Create
Back
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19. Formulating Blue Ocean Strategy
75 mins 120 mins 120 mins
Exploration : Strategizing :
Awakening :
Reconstruct Market To-Be Strategy
As-Is Analysis
Boundaries Canvas
Activity 1 (45 min) Activity 3 (90 min) Activity 5 (90 min)
• Split into 3 Groups • Split into 3 Groups • Split into 3 Groups
• Review As-Is Strategy • Use 6 Paths Framework, • Use ERRC to construct the
Canvas (30 min) reconstruct market Desired Value Curve (60
boundaries & identify
• Presentation (5 min each, mins)
Divergent Factors (60 min)
15 min total) • Presentation (10 min each,
• Presentation (10 min each, 30 mins total)
Activity 2 (30 min) 30 min total)
• Agree to ONE As-Is Activity 4 (30 min) Activity 6 (30 min)
Strategy Canvas
• Agree to Top 3-5 Divergent • Agree to ONE To-Be
Factors Strategy Canvas
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20. Activity 1 & 2 : As-Is Analysis
Review XYZ As-Is Strategy Canvas
High 4.5
4
Offering Level
3.5
3
Mid 2.5
2
1.5 Competitors
1 XYZ
0.5
Low 0
s on h rs
es iti ge at to ie
s ng re
n a P li t di ltu
ve gn nk er li t
a
ac
i
an u
titi co Li re ci F Br /C
pe lR
e
st
ry C
a Fa y le
st
om na du & fe
C io In m Li
e ut ra
Fe tit og
In
s Pr Competing Factors
Back
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21. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
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22. Across Alternative Industries
BOS Example –
Alternatives include products or services that have different functions and
forms but the same purpose.
Commercial Corporate Corporate
Airline Jet Commercial
Airlines Jet
• Pay per use • Less Travel
Time
Good • No
Maintenance • Less Hassle
• P2P
1/16 Ownership Smaller
50 hrs/yr
@ $375k Airplanes,
• Not P2P
Airport,
• High Travel
Bad • High Cost Less Staff
Time
• Security
Concern Point-to-point, Faster,
Less Hassle, Increase Productivity
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23. Strategy Canvas - NetJets
Eliminate Raise
• Speed of travel time
• Ease of travel
• Flexibility and Reliability
• In flight service
Reduce Create
• Price
• Need for customers to
manage aircraft
• Deadhead costs
High
Private Jet
NetJets' Value
Curve
Com m ercial Airlines
Low Price Need for Deadhead Speed of total Ease of travel Flexibility and In- flight service
customer's to costs travel time reliability
manage aircraft
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24. Across Alternative Industries
BOS Example –
Conventional Airline Coach
Across
Alternative
Industries Slow
Cheap
Point to Point
Fast
Expensive
Better Services Now Everyone Can Fly!
Flight Connections
Price of Coach &
Speed of Flight
P2P Direct Flight
No Frill – User Pay
Budget Travel
Package
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25. Strategy Canvas - Air Asia
Eliminate Raise
Price Competition • Quality of Safety
Seat Selection • Point to Point Direct
Free Food & Beverages Flight
Air Ticket
VIP Lounge
Flight Connection
Reduce Create
Air Fare • Web Registration
Capital • Express Boarding
Stopover time • Budget Hotel
Staffing (ground and
air)
High
Air Asia
Offering Level
Other Local Airline
Land Transportation
Low
e p n y et ge on
l e g
et
y F g dg ote
l
ic m ct pl ck it a m fin ct Re oa r
Pr Co ele up Ti un tC ap Ti af S af ire b H
e S r Lo h C
ve
r St D e B
ge
t
ic t S od Ai P Fl
ig P W ss
Pr S ea F o VI opo P2 re ud
B
St Xp
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26. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
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27. Across Strategic Groups
BOS Example –
Strategic Groups –Groups of companies within an industry that pursue a similar
strategy.
E.g., Automobiles – Luxury (Mercedes, BMW), Economical (Toyota, Proton).
Traditional Home
Health Club Exercise Traditional
Health Club
Womanly
Fun
• Full range • Low Cost
exercise and
• Privacy >10k
Good sporting
options Easy to Use Outlets &
Machine > 4M
members
• Expensive. (as of
Peer Oct,
• Not easily
accessible. Support
Bad • Low 2006)
• Complicated. motivation
• Lack of
Privacy Affordable
Home Exercise
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28. Strategy Canvas - Curves
Eliminate Raise
• Non threatening same
sex environment
Reduce Create
Price • Womanly fun
Amenities atmosphere
Workout equipment
Availability of Instructors
High
Curve s
Hom e Exercise Program
Traditional Health Clubs
Low Price Amenit ies Workout Workout Time A vailabilt y of Environment Nonthreatening Convenience Womenly fun
Equipment instructors encouraging same- sex at mosphere
discipline and environment
motivation in
exercise
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29. Across Strategic Groups
BOS Example – OldTown
Expensive
Hygienic
Good Ambience &
Relaxing Environment
Rightly Priced
Economical Hygienic
Less Hygienic Better Environment
Less Appealing Environment Emotional Appeal
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30. Across Strategic Groups
BOS Example – Tune Hotel
4/5 Stars Hotels
Nice Sleep!
Hot Shower!
Luxury
Expensive
Service
Facilities
Backpacker Hostels
No Frill
Cheap - Pay For What You Use!
Optional Add-ons:
Cheap Limited service, basic
Sleep & Go Low on price, high on personality
Walk in
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31. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
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32. Across Chain of Buyers
BOS Example –
There is a chain of ‘buyers’ who are directly or indirectly involved in the buying
decision.
Purchasers – pay for the product or service
Users – use the product or service
Influencers – influence the decision in the purchase
Corporate
Jet
Example : Novo Nordick - from insulin producer to a diabetes care company
Traditionally Now
Prescribe Request
Better Better Easy No
Medicine Pricing To Use Unpleasant
Feeling
Insulin
Industry
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33. Across Chain of Buyers
BOS Example – Nintendo Wii
Everyone is a gamer!
Everyone can play!
Reduced Graphics Nintendo outsold Sony and
Microsoft 6:1. Can’t keep
product on shelves!
Family Fun
Wii Fit
Increased motion control
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34. Strategy Canvas : Nintendo Wii
Eliminate Raise
• Complexity • Game Library
• Movie • Ease of Use
Reduce Create
Price • Interaction/Group Fun
Graphics • Magic Wand
Physics
Online Pay
High
Nintendo Wii
Gam e Industry
e s s y i ty ie ry se Fu
n d
Low ic ic ic Pa ex ov ra an
Pr ph ys e pl M ib fU up W
ra Ph nl
in
om
L o
ro ic
G e se G ag
O C am Ea n/ M
G tio
c
ra
te
In
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35. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
All Rights Reserved – KB Yip/YS Lieu Page : 35
36. Across Complementary Products & Services
BOS Example – NABI
Define the total solution buyers seek when they choose a product or service.
Think about what happens before, during, and after your product is used.
Corporate
Example : Jet
Traditional : Buses made from Steel
• Less Space
• Low Initial Price • More Fuel • High •High
Supplementa Maintenanc
Purchase Delivery Use Disposal
ry e
• High Initial Price • More Space • Low • Low
• Less Fuel
NABI : Buses made from Fibre Glass
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37. Strategy Canvas - NABI
Eliminate Raise
• Environmental
friendliness
Reduce Create
Corrosion • Aesthetic design
Maintenance cost • Customer friendliness
Fuel consumption
High
NABI
Average U.S Transit Bus
Low
Initial purchase Corrosion Maintenance Fuel Environmental Aesthetic Customer
price cost consumption friendliness design friendliness
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38. Across Complementary Products and Services
BOS Example: Operated 798 stores in all 50 U.S. states
and the District of Columbia, as well as
Purchasing stores in Australia and Canada
Process
Before During After
Book Selection Customer Enquiry Go to Coffee Shop
Sit Down Paying Read the Book
Browse Through Book Signing
Selection Buy DVD, Games, Gift
Attend an event
Carrying bag
Immediate Enjoyment!
Book Selection
Event : Story Telling for Kids DVD & Games
Book Signing
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39. Across Complementary Products and Services
BOS Example -
• Largest EMS (Electronics Manufacturing
Services) in the World.
• Ranked 132 at Fortune Global with $51B
revenue, higher than Intel (188), Motorola
(200), Flextronics (292).
• Employs 550,000 employees worldwide
with design centers/factories at >10
countries.
• Make Apple Mac/iPod/iPhone, Intel
motherboards, Dell, HP, Sony PlayStation,
Nintendo Wii, Microsoft Xbox, cell phones
for Nokia/Samsung/Motorola/LG/Sony-
Ericsson.
• Shenzhen facility at Longhua
• Covers about a square mile.
• Has its own fire brigade, hospital,
swimming pool, restaurants, banks,
supermarkets, internet cafe.
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40. BOS Example - Foxconn
Repair &
Servicing
Repair &
Servicing
Logistics &
Distribution
Conventional
Distribution EMS
Mass
Production
Logistics
Mass
Production VI Part
Sourcing &
Production
Inventory
Prototyping Control
Prototyping
Sourcing
Design
Design
Vertical Integration
(VI) Model
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41. Strategy Canvas - Foxconn
High
Foxconn
Othe r EM Se s
Low
e ss g y ss er
y li ty t io
n
e
en olo oc e l iv ua ra
iv hn Pr Q g
ti t ec
D
n te
pe T a lI
m
Co r ti c
st Ve
Co
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42. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
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43. Across Functional or Emotional Appeal
BOS Example – QB House
Some industries compete principally on price and function - their appeal is
rational.
Other industries compete largely on feelings - their appeal is emotional.
• Simple • Pricey
• Low Cost • Extras
• Low Price • Feelings
Functional Emotional
Traditional Hair
Saloon
• Hot Towels
QB House
Rev • Message
• Emotional Service -> None
• Tea/Coffee
• Hair Wash -> Air Wash
• Special Hair /Skin
• $9 Treatments
1996 2003 • $27 - $45
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44. Across Functional or Emotional Appeal
BOS Example –
Institute / College
Across High Fee
Multiple
WW Recognized
Pathways
Certification
Low Fee Strategic Branches in UK, Africa
& China
Group
Low Recognition of • Functional ->
Collaboration w other
Universities
Education Quality Emotional 6000 students from 90 countries
Open Education Vibrant, multicultural and international
Conventional System
Education System
Free & Creative
Many Environmental Environment
Constraints Diverse Student Base Academic Exchange
Local Market Fun Learning
Exposure
Global Classroom Encourage
Entrepreneurship
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45. Strategy Canvas - LimKokWeng
Eliminate Raise
Foreign Cert • Globalization
Competition
Superiority
• Asian Culture
Environmental
Constraints • Creative Thinking
• Flexibility Culture
• Exposure
• Entrepreneurship
Reduce Create
Student Unconventional
Constraints Teaching Method
Fee Competition Ecosystem
High
Lim Kok Weng
Private Colleges
Low
n
on
d
re
ts
g
y
p
ts
m
re
re
es
io
ho
rit
kin
hi
in
tu
in
titi
te
ti t
su
tu
io
Fe
et
ra
rs
ul
ra
pe
in
ys
pe
ul
er
po
eu
M
st
C
st
Th
C
os
om
up
om
on
Ex
en
ty
on
g
n
Ec
in
e
tS
i li
lC
C
ia
C
tC
pr
iv
ch
ib
As
er
n
at
t re
e
ta
ex
en
ea
io
Fe
re
C
en
En
at
Fl
ud
lT
C
n
nm
l iz
ig
St
na
ba
re
ro
io
Fo
lo
vi
nt
G
En
ve
on
nc
U
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46. Reconstruct Market Boundaries
There are 6 pathways to reconstruct the market boundaries
Across Alternate Industry
Across Strategic Groups
Across Buyer Groups
Blue
Red
Across Complementary Scope of Ocean
Ocean
Products & Services
Across Functional Emotional
Orientation
Across Time
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47. Across Time
BOS Example – iTune
Apple launched Apple teamed up with
iTunes online major Music & Picture
music store Companies
Sell Individual song /
entire album
30 sec free listening
Strategically price
Napster started
> 2 billion illegally
music flies were being
online music file
traded every month
sharing service
iTunes had sold >
1999 2003 4 billion songs 2008
20 million songs
on Dec 25, 2007
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48. Across Time
BOS Example :
A video sharing website
for upload, view and share
video clips
User can post video
'responses' and subscribe
to content feeds
Created in mid-February
2005 by three former
PayPal employees
Uses Adobe Flash
technology to display a
wide variety of user-
generated video content
Acquired by Google in Nov
2006 for $1.6B
As of Apr 2008, hosting 83.4 million videos and 3.75 million user channels
> 100 million videos were being watched every day
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49. Strategy Canvas - YouTube
Eliminate Raise
• Need for HTML • Web space allotted
know-how per user
• Hassle of
undergoing
numerous steps
• Fees
Reduce Create
Uploading / • Ease of Use
downloading time technology
• FLV technology
• Ready-made website
• Social networking
• Video tags & Search
High
YouTube
Ordinary Webhosting
Low
ow sl
e es
e er gy te gy ng ch
ti m us lo si lo ki ar
-h as Fe eb no or
w H oa
d
pe
r no w w se
kn
o
nl d ch e ch et &
w te te ad te N gs
L
do at se -m
V al ta
TM d/ oc f- u FL ci
H oa al
l dy So de
a
r -o ea
fo pl ce
s Vi
d U
pa Ea R
ee
N e bs
W
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50. Look across Time
Weird Science
Climate Change Future of the
Individual
Longevity
Medicine Innovation
Ten Trends Economy
of
the Extreme
Fueling the
Future
Next Workforce
Future
Securing the
Globalization Future
US- China Future
From the Book “Extreme Future”
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51. From Head-to-Head Competition to Blue Ocean Creation
Head-To-Head Competition Blue Ocean Creation
Looks across alternative
Industry Focuses on rivals within its industry
industries
Focuses on competitive position within Looks across strategic groups
Strategic Group
strategic group within industries
Focuses on better serving the buyer Redefines the industry buyer
Buyer Group
group group
Focuses on maximizing the value of
Scope of Product or Looks across to complementary
product and service offerings within
Service Offering and service offerings
the bounds of its industry
Focuses on improving price Rethinks the functional-
Functional-Emotional
Functional-
performance within the functional - emotional orientation of its
Orientation
emotional orientation of its industry industry
Focuses on adapting to external trends Participates in shaping external
Time
as they occur trends over time
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52. Across Multiple Pathways
BOS Example – NV Multi Corporation
Traditional Graveyard NV Multi Corporation
Total Peace of Mind
Economical Expensive
Unpleasant Environment Pleasant Environment
Pollution 1 Stop Service
No Maintenance After Sales Service
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53. Across Multiple Pathways
BOS Example – NV Multi Corporation
Complementary
Prayer Service
Service Team
Products & Services
Professional Band White Ladies
A Service Respect For Woman
• Notifying Friend &
Across Buyer Functional Relatives
• Thank You Cards
Groups to Emotional • Memory Lane
• Video & Slideshow
Across
Alternative
Industries
• Buyer -> User & User -> Buyer
• Pet Memorial Garden • Bereavement
• VIP Memorial Garden Product
• Insurance Protection
• Capital Gain
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54. Strategy Canvas - NV Multi Corporation
Eliminate Raise
• Price Competition • Well Layout
• Fear Cemetery
• Taboos • Staff Appearance
• Pre-arranged
• One Stop Funeral
Services
Reduce Create
Sophisticated • White Angels
Process • Luxury Cemetery
Pollution
• Customizable
Burial Plots
• Care Plan
High
NV Multi
Private Cem etary
Public Cemetery
Low
s
on
n
y
an
s
ar
ot
ed
y
e
ss
os
ls
ce
t io
er
ic e
er
ic
ge
titi
Fe
Pl
e
pl
bo
ng
et
et
n
Pr
l lu
oc
rv
pe
An
ra
m
ial
re
Ta
m
ra
Po
Se
Pr
ea
Ce
Ca
m
Ce
r
ar
te
Bu
Co
pp
d
e-
al
hi
te
t
ry
ou
er
e
Pr
fA
W
ic a
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xu
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ay
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ic
af
iz a
Fu
Lu
is t
Pr
lL
St
om
ph
p
el
o
So
W
st
St
Cu
ne
O
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55. Activity 3 & 4 : Reconstruct Market Boundaries
Identify Divergent Factors
High 4.5
4 Competitors
Offering Level
3.5
3
Mid 2.5
2
1.5
1 XYZ
0.5
Low
0
h
n
ss
e
s
ng
es
re
10
11
9
at
ti o
ag
or
ne
or
tu
rP
i ti
di
ni
at
or
or
nk
ul
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ct
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an
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li t
ee
ct
ct
Fa
C
Li
Fa
ci
Br
Fa
Fa
tit
ec
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ar
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ry
pe
yl
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C
st
st
om
du
&
na
fe
m
In
C
Li
ti o
ra
e
itu
og
Fe
st
Competing Factors
Pr
In
Identify the
Divergent Factors
that Differentiate XYZ
from Competitors
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56. Activity 3 & 4 : Reconstruct Market Boundaries
Identify Divergent Factors
Sub-Group :
Divergent Factor Description
Note : Each sub-group must determine at least ONE Divergent Factor.
Back
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57. Activity 5 & 6 : To-Be Strategy Canvas
Construct Desired Value Curve for XYZ
Eliminate Create
Divergent Factors
X=
Y=
Z=
Reduce Raise
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58. Activity 5 & 6 : To-Be Strategy Canvas
Construct Desired Value Curve for XYZ
Eliminate Create
Competencies Divergent Factors
X=
Y=
Z=
Reduce Raise
Technology Quality
Process
Talent New Value
Curve
High Existing Value
Curve
Mid
Low
Fee Institutional Industrial Program Facilitators Facilities Lifestyle/ X Y Z
Competencies Recognition Linkage & Career Path Culture
All Rights Reserved – KB Yip/YS Lieu Page : 58
59. Three Characteristics of a Good Strategy
1. Focus
2. Divergence
Now Everyone Can Fly!
3. Compelling Tagline
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60. Barriers to Imitation
Does not Make Sense Brand Image Conflicts Economies of Scale
based on Conventional
Chanel, CD, etc could not imitate High volume generated by a
Strategic Logic
Body Shop as it would signal an value innovation leads to rapid
NBC, CBS and ABC rediculed invalidation of their current cost advantages
the idea of 24x7 real time news business models
without star broadcasters
Political, Operational and 1st to Market Natural Monopoly
Cultural Changes
When a company offers a leap in Size of market does not make
Major revisions in routing planes, value, it rapidly earns brand buzz sense to support another player
retraining, changing and a loyal following in the
marketing/pricing/culture. Took marketplace
MAS 6 years to come up Firefly Back
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61. Conclusion:
Focus on the Big Picture, not the Numbers
Awakening Exploration Strategy Fair Communication
Compare your Draw your To Be Distribute your
Go into the field to
business with your Strategy Canvas before- and-after
explore the six
competitors' by based on insights strategic profiles on
paths to creating
drawing your As Is from field one page for easy
blue oceans
Strategy Canvas observations comparison
Get feedback on Support only those
Observe the
alternative strategy projects and
distinctive
See where your canvases from operational moves
advantages of
strategy needs to customers, that allow your
alternative
change competitors’ company close the
products and
customers and non gaps to actualize
services
customers the new strategy
See which factors
Use feedback to
you should
build the best 'to be'
eliminate, create or
future strategy
change
Back
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62. Get the Strategic Sequence Right
Red Ocean
Sequence Cost Price Utility Adoption
Buyer Adoption Commercially
Price Cost Viable
Utility Hurdles Blue Ocean Idea
Is there Is your price Can you attain What are
exceptional buyer easily accessible your cost target to adoption hurdles
utility in your to the mass of profit at your in actualizing
business idea? buyers? strategic price? your business
idea? Are you
addressing them
up front?
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