Slide 1:Blue Ocean Strategy


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Slide 3:Contents Blue Ocean Vs. Red Ocean Strategy Blue Ocean Strategy Tools Strategy Canvas and Four Action Framework Six Principles of Blue Ocean Strategy Formulating Blue Ocean Strategy Executing Blue Ocean Strategy


Slide 4:Blue Ocean Vs. Red Ocean Strategy


Slide 5:Blue Ocean vs. Red Ocean Strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Compete in existing market space Beat the competition Exploit existing demand Blue Ocean Strategy Red Ocean Strategy


Slide 6:Blue Ocean vs. Red Ocean Strategy Break the value- cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation and low cost 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


Slide 7:Blue Ocean Strategy Tools Strategy Canvas 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 in product, service and delivery what customers receive from existing competitive offerings on the market


Slide 8:Four Action Framework Eliminate Reduce Raise Create


Slide 9: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 created that the industry has never offered? Which factors should be raised well above the industry’s standard?


Slide 10:Four Action Framework The Case of Cirque du Soleil (A Circus Company) Theme Refined environment Multiple productions Artistic music and dance Eliminate Reduce Raise Create Star performers Animal shows Aisle concession sales Multiple show arenas Fun and humor Thrill and danger Unique venue


Slide 11:Six Principles of Blue Ocean Strategy Reconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Overcome key organizational hurdles Build execution into strategy Formulation Principles Execution Principles


Slide 12:Formulating Blue Ocean Strategy


Slide 13:1. Reconstruct Market Boundaries Focus on rivals within industry Focuses on competitive position within strategic group Focuses on better serving the buyer group Head-to-Head Strategy Blue Ocean Strategy Looks across alternative industries Looks across strategic group within industry Redefines the industry buyer group


Slide 14:1. Reconstruct Market Boundaries 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 Head-to-Head Strategy Blue Ocean Strategy Looks across to complementary product and service offerings Participates in shaping external trends over time


Slide 15:2. 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


Slide 16:2. Focus on the Big Picture, not the Numbers Visual Awakening Compare your business with your competitors’ by drawing your “as is” strategy canvas See where your strategy needs to change


Slide 17:2. 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


Slide 18:2. 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, competitors’ customers, and noncustomers Use feedback to build the best “to be” future strategy


Slide 19:2. 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


Slide 20:3. Reach Beyond Existing Demand The Three Tier 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


Slide 21:4. Get The Strategic Sequence Right The Sequence of Blue Ocean Strategy Buyer utility Is there exceptional buyer utility in 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 your business idea? A commercially viable blue ocean idea


Slide 22:Executing Blue Ocean Strategy


Slide 23:5. Overcome Key Organizational Hurdles Overcome Key Organizational Hurdles Cognitive Hurdle Motivational Hurdle Resource Hurdle Political Hurdle


Slide 24:5. Overcome Key Organizational Hurdles Cognitive Hurdle (status quo) Resource Hurdle Ride the “Electric Sewer” Meet with Disgruntled Customers Redistribute resources to your hot spots Redirect resources from your cold spots Engage in horse trading


Slide 25:5. Overcome Key Organizational Hurdles Motivational Hurdle Political Hurdle Zoom in on Kingpins (key influencers) Place kingpins on a fishbowl Atomize to get the organization to change itself Secure a consigliere on your top management team Leverage your angels and silence your devils


Slide 26:5. Build Execution Into Strategy Fair Process of Strategy Strategy Formulation Process Fair Process – Engagement, Explanation, Expectation clarity Attitudes Trust and Commitment – “I feel my opinion counts” Behavior Voluntary Cooperation – “I’ll go beyond the call of duty” Strategy Execution Exceeds Expectation – self initiated


Slide 27:Source of Reference W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy, HBS Publication. You can obtain this excellent book at this link: http://www.amazon.com/Blue-Ocean-Strategy-Uncontested-Competition/dp/1591396190/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1219801926&sr=1-1


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