Blue Ocean Strategy

Slide 1: 

armolla@energypac-bd.com Blue Ocean Strategy

Contents : 

armolla@energypac-bd.com Contents Blue Ocean Vs. Read Ocean Strategy Blue Ocean Strategy Tools Strategy Canvas Four Action Framework Six Principles of Blue Ocean Strategy Formulating Blue Ocean Strategy Executing Blue Ocean Strategy

Blue Ocean Vs. Read Ocean Strategy : 

armolla@energypac-bd.com Blue Ocean Vs. Read Ocean Strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade off Align the whole system of a firm's activities with its strategic choice of differentiation and low cost Compete in existing market space Beat the competition Exploit existing demand Make the value-cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost Blue Ocean Strategy Red Ocean Strategy

2. Blue Ocean Strategy Tools : 

armolla@energypac-bd.com 2. Blue Ocean Strategy Tools A diagnostic tool for building a compelling blue ocean strategy It captures the current state of play in the known market space Allow you to understand: - where the competition is currently investing - the factors the industry currently competes on it products, service and delivery - what customers receive from existing competitive offerings of the market Strategy Canvas

3. Strategy Canvas Four Action Framework : 

armolla@energypac-bd.com 3. Strategy Canvas Four Action Framework Eliminate Reduce Raise Create

3. Strategy Canvas Four Action Framework : 

armolla@energypac-bd.com 3. Strategy Canvas Four Action Framework Eliminate Reduce Raise Create 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?

3. Strategy Canvas Four Action Framework : 

armolla@energypac-bd.com 3. Strategy Canvas Four Action Framework Eliminate Reduce Raise Create The Case of Cirque du Soleil (A Circus Company)

4. Six Principles of Blue Ocean Startegy : 

armolla@energypac-bd.com 4. Six Principles of Blue Ocean Startegy 1. Reconstruct market boundaries 2. Focus on the big picture, not the numbers 3. Reach beyond existing demand 4. Get the strategic sequence right Overcome key organizational hurdles 2. Build execution into strategy Formulation Principles Execution Principles

Slide 9: 

armolla@energypac-bd.com Formulating Blue Ocean Strategy

1. Reconstruct Market Boundaries : 

armolla@energypac-bd.com 1. Reconstruct Market Boundaries Focus on rivals within industry Focuses on competitive position within strategic group Focuses on better serving the buyer group Focuses on maximizing the value of product or service offerings within the bounds of its industry Focuses on adapting to external trends as they occur Looks across alternative industries Looks across strategic group within industry Redefines the industry buyer group Looks across to complementary products and service offerings Participates in shaping external trends over time Head-to-Head Strategy Blue Ocean Strategy

2. Focus on the Big Picture, not the Numbers : 

armolla@energypac-bd.com 2. Focus on the Big Picture, not the Numbers Focus on the Big Picture, not the Numbers The Four Steps of Visualizing Strategy Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication

2. Focus on the Big Picture, not the Numbers : 

armolla@energypac-bd.com 2. Focus on the Big Picture, not the Numbers Visual Awakening Compare your business with your competitor’s by drawing your “as is” strategy canvas See where your strategy needs to change

2. Focus on the Big Picture, not the Numbers : 

armolla@energypac-bd.com 2. Focus on the Big Picture, not the Numbers Visual Exploration Go to the field to explore the six paths to creating blue oceans Observe the distinctive advantages of alternative products and services See which factors you should eliminate, create, or change

2. Focus on the Big Picture, not the Numbers : 

armolla@energypac-bd.com 2. Focus on the Big Picture, not the Numbers Visual Strategy Fair Draw your “to be” strategy canvas based on insights from field observations Get feedback on alternative strategy canvases from customers, competitor’s customers, and noncustomers Use feedback to build the best “to be” future strategy

2. Focus on the Big Picture, not the Numbers : 

armolla@energypac-bd.com 2. Focus on the Big Picture, not the Numbers Visual Communication Distribute your before-and-after strategic profiles on one page for easy comparison Support only those projects and operational moves that allow your company to close the gap to actualize the new strategy

3. Reach Beyond Existing Demand : 

armolla@energypac-bd.com 3. Reach Beyond Existing Demand The Three Tire of Non- Customers First tier: “Soon to be” non- customers who are the edge of your market, waiting to jump ship Second tier: “Refusing” non- customers who consciously choose against your market Third tier: “Unexplored” non- customers who are in markets distant from yours

4. Get the Strategic Sequence Right : 

armolla@energypac-bd.com 4. Get the Strategic Sequence Right The Sequence of Blue Ocean Strategy Buyer Utility Is there exceptional buyer utility on your business idea? Price Is your price easily accessible to the mass of buyers? Cost Can you attain your cost target to profit at your strategic price? Adoption What are the adoption hurdles in actualizing business idea? A commercially viable blue ocean idea

Slide 18: 

armolla@energypac-bd.com Executing Blue Ocean Strategy

5. Overcome Key Organizational Hurdles : 

armolla@energypac-bd.com 5. Overcome Key Organizational Hurdles Cognitive Hurdle Motivational Hurdle Resource Hurdle Political Hurdle Overcome Key Organizational Hurdles

5. Overcome Key Organizational Hurdles : 

armolla@energypac-bd.com Cognitive Hurdle (status quo) Ride the “Electric Sewer” Meet with Disgruntled Customers 5. Overcome Key Organizational Hurdles Resource Hurdle Redistribute your resources to your hot spots Redirect your resources from your cold spots Engage in horse trading

5. Overcome Key Organizational Hurdles : 

armolla@energypac-bd.com Motivational Hurdle Zoom in on Kingpins (key influencers) Place Kingpins on a fishbowl Atomize to get the organization to change itself 5. Overcome Key Organizational Hurdles Political Hurdle Secure a consigliere on your top management team Leverage your angels and silence your devils

5. Build Execution Into Strategy : 

armolla@energypac-bd.com 5. Build Execution Into Strategy Fair Process of Strategy Strategy Formulation Process Fair Process- Engagement, Explanation, Expectation clarity Attitude Trust and Commitment- “I feel my option counts” Behavior Voluntary Cooperation- “ I will go beyond the call of duty” Strategy Execution Exceeds Expectation- self initiated

Slide 23: 

armolla@energypac-bd.com End of Material