This document discusses the concept of "blue ocean strategy", which involves creating new market space by exploring opportunities outside existing industry boundaries to render competition irrelevant. It outlines key principles of blue ocean strategy, including reconstructing market boundaries, focusing on the big picture rather than numbers, reaching beyond existing demand, and getting the strategic sequence right. The document also notes risks to consider in both formulating and executing a blue ocean strategy.

1. blue ocean strategy ®
Go where profits and growth are –
and where the competition isn’t
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2. Researching the history of
blue ocean creation
•Data: 150 strategic moves, more than 30
industries, over 100 years (1800‐2000)
• Variables considered: industrial,
organizational and strategic
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3. Red versus blue
Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value‐cost trade‐off Break the value‐cost trade‐off
Align the whole system of a Align the whole system of a
company’s activities with its strategic company’s activities in pursuit of
choice of differentiation or low cost differentiation and low cost
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4. Six paths to
blue ocean strategy
Industry
Strategic group
From
Buyer group To Creating
Competing
Across
Within Scope of product or service offering
Functional‐emotional
orientation of an industry
Time
The six conventional boundaries of competition
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5. Strategy canvas of [yellow tail]
High
Premium wines
[yellow tail]
Budget wines
Low
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6. Four actions framework
Reduce
Which factors should
be reduced well below
the industry’s
standard?
Eliminate Create
Which of factors that A New Which factors should
the industry takes for Value be created that the
granted should be industry has never
eliminated? Curve
offered?
Raise
Which factors should
be raised well above
the industry’s
standard?
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7. Minimizing risks & maximizing opportunities in
formulation & executing blue ocean creation
Formulation Principles Formulation Risks
Reconstruct market boundaries Search Risk
Focus on the big picture, not the numbers Planning Risk
Reach beyond existing demand Scale Risk
Get the strategic sequence right Business Model Risk
Execution Principles Execution Risks
Overcome key organizational hurdles Organizational Risk
Build execution into strategy Management Risk
www.blueoceanstrategy.com © Kim & Mauborgne

8. blue ocean strategy ®
How to create uncontested market space and
make the competition irrelevant.
www.blueoceanstrategy.com © Kim & Mauborgne