Blue Ocean Strategy

Go where the profits and growth are - and where the competition isn’t

W. Chan Kim & Renée Mauborgne

.

The Strategy Canvas of Cirque du Soleil hi Ringling Brothers Cirque du Soleil offering level Smaller Regional Circus lo Price Animal Shows Star Performers Aisle Concessions Multiple Show Arenas Thrills & Danger Fun & Humor Unique Venue Theme Multiple Productions Artistic Music & Dance © Kim & Mauborgne 2006 Refined Viewing Environment .

The Strategy Canvas of Cirque du Soleil hi Eliminate Ringling Brothers Reduce Raise Create Cirque du Soleil offering level Smaller Regional Circus lo Price Animal Shows Star Performers Aisle Concessions Multiple Show Arenas Thrills & Danger Fun & Humor Unique Venue Theme Multiple Productions Artistic Music & Dance © Kim & Mauborgne 2006 Refined Viewing Environment .

Personal Finance Software Industry hi Quicken Personal Finance Software offering level The Pencil lo Price Ease of Use Optional Features Speed Accuracy © Kim & Mauborgne 2006 .

Red Ocean Versus Blue Ocean Strategy Red Ocean Strategy Compete in existing market space Blue Ocean Strategy Create uncontested market space Beat the competition Make the competition irrelevant Differentiation or low cost Differentiation and low cost Competitive Advantage Value Innovation Segment existing customers Attract noncustomers Exploit existing demand Create and capture new demand © Kim & Mauborgne 2006 .

Substantially Higher Returns from Investments in Blue Oceans Business Launch 86% 14% Revenue Impact 62% 38% Profit Impact Red Oceans Market-Competing Business Launches 39% 61% Blue Oceans Market-Creating Business Launches © Kim & Mauborgne 2006 .

Is there a pattern to blue ocean creation? © Kim & Mauborgne 2006 .

Researching the History of Blue Ocean Creation • Data: 150 blue ocean creations. more than 30 industries. steel manufacturing. • Variables considered: industrial. over 100 years (1880-2000) • hotel. automobile. broadcasting. airline. etc. energy. strategic variables © Kim & Mauborgne 2006 . home construction. cosmetics. organizational. chemicals. software. computer. cinema. retailing.

Innovation Random • Entrepreneur • Entrepreneurial Risk • Trial & Error • Learning from Failures • DNA / Culture • Units for Experimentations (Spin-offs) • Risk Taking or Risk Avoiding Schumpeterian School Value Innovation School © Kim & Mauborgne 2006 Systematic • Pattern • A way of Thinking • Theory • Methodologies • Analytical Frameworks • Opportunity Maximizing & Risk Minimizing .

Minimizing Risks and Maximizing Opportunities in Formulating and Executing Blue Ocean Strategy Formulation Principles Reconstruct market boundaries Focus on the big picture. not the numbers Reach beyond existing demand Get the strategic sequence right Formulation Risks Search Risk Planning Risk Scale Risk Business Model Risk Execution Principles Overcome key organizational hurdles Execution Risks Organizational Risk Build execution into strategy Management Risk © Kim & Mauborgne 2006 .

Sign up to vote on this title
UsefulNot useful