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BOS Summary

BOS Summary

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Published by Rebecca13179
It is a personal summary for blue ocean strategy.
It is a personal summary for blue ocean strategy.

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Published by: Rebecca13179 on Oct 31, 2009
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09/19/2010

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Red oceans – all the industries in existence today (known market space)Blue oceans – all the industries not in existence today (unknown market space)
Blue Ocean Strategy
 
 
Challenges companies to break out of the red ocean of bloody competition by creatinguncontested market space that makes the competition irrelevant.
 
Defined by untapped market space, demand creation, and the opportunity for highly profitablegrowth.
Value Innovation
 
 
Equal emphasis on value and innovation.
 
Value without innovation tends to focus on
value creation
on an incremental scale, something thatimproves value but is not sufficient to make you stand out in the marketplace
 
Innovation with values tends to be technology-driven, market pioneering, or futuristic, oftenshooting beyond what buyers are ready to accept or pay for
 
Occurs only when companies align innovation with utility, price, and cost position
 
Achieving a leap in value for both buyers and companies themselves.
 
Defies value-cost trade-off 
Red Ocean Versus Blue Ocean Strategy
 
Analytical Tools and Frameworks
 
 
The Strategy Canvas
 
Shows the strategic profile of an industry by depicting very clearly the factors (and possiblefuture factors) that affect competition among industry players.
 
Shows the strategic profile of current and potential competitors, identifying which factors theyinvest in strategically.
 
Shows the company’s value curve depicting how it invests in the factors of competition and howit might invest in them in the future.Value curve
 
Basic component of the strategy canvas
 
A graphic depiction of a company’s relative performance across its industry’s factors of competitionFour action Framework: Eliminate-Reduce-Raise-Create Grid
 
Pushes them to simultaneously pursue differentiation and low cost to break the value-costtrade-off 
 
Immediately flags companies that are focused only on raising and creating and thereby liftingtheir cost structure and often overengineering products and services—a common plight in manycompanies.
 
Easily understood by managers at any level, creating a high level of engagement in itsapplication.
 
Because completing the grid is a challenging task, it drives companies to robustly scrutinize everyfactor the industry competes on, making them discover the range of implicit assumptions theymake unconsciously in competing.
Three Characteristics of a Good Strategy
 
 
Focus
Emphasize on factors that help the company stand apart from the competition.
 
 Divergence
Differentiate company profiles from the industry’s average profile.
 
Compelling Tagline
Deliver clear message truthfully.
Formulating Blue Ocean Strategy
 
 
Reconstruct Market Boundaries
 
Focus on the Big Picture, Not the Numbers
 
Reach Beyond Existing Demand
 
Get the Strategic Sequence Right
 
Path 1: Look Across Alternative Industries
Alternatives include products or services that have different functions and forms but the
same purpose.
 
Path 2: Look Across Strategic Groups Within Industries
The term refers to a group of companies within an industry that pursue a similar strategy.
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 casesthere are important influencers as well.
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 totalsolution buyers seek when they choose a product or service. A simple way to do so is to think about whathappens before, during, and after your product is used.
Path 5: Look Across Functional or Emotional Appeal to Buyers
Some industries compete principally on price and function largely on calculations of utility; their appealis rational. Other industries compete largely on feelings; their appeal is emotional.
Path 6: Look Across Time
Subject to external trends that affect their businesses over time.
The Four Steps of Visualizing Strategy

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