Blue Ocean Strategy

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Contents
1. Blue Ocean Vs. Red Ocean Strategy 2. Blue Ocean Strategy Tools 3. Strategy Canvas and Four ction Fra!ework ". Si# $rinci%les o& Blue Ocean Strategy '. For!ulating Blue Ocean Strategy (. )#ecuting Blue Ocean Strategy
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study Marketing.Blue Ocean Vs. Red Ocean Strategy www.org 3 .

Red Ocean Strategy Blue Ocean Strategy 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 www.org " .study Marketing.Blue Ocean vs.

Red Ocean Strategy Blue Ocean Strategy Red Ocean Strategy • • Break the value cost trade off !lign the whole system of a firm"s activities with its strategic choice of differentiation and low cost • • Make the value cost trade off !lign the whole system of a firm"s activities with its strategic choice of differentiation or low cost www.study Marketing.org ' .Blue Ocean vs.

service and delivery • what customers receive from existing competitive offerings on the market • • www.org ( .Blue Ocean Strategy Tools • Strategy Canvas ! diagnostic tool for building a compelling blue ocean strategy It captures the current state o& %lay in the known market space !llow you to understand # • • where the competition is currently investing the factors the industry currently competes on in product.study Marketing.

org . .Four ction Fra!ework )li!inate Raise Reduce Create www.study Marketing.

study Marketing.Four ction Fra!ework )li!inate Reduce $hich of the factors that the industry takes for granted should be eli!inated.org . $hich factors should be reduced well /elow the industry"s standard% $hich factors should be raised well a/ove the industry"s standard% $hich factors should be created that the industry has never offered% - Raise Create www.

Four ction Fra!ework T1e Case o& Cir2ue du Soleil * Circus Co!%any+ )li!inate • • • • (tar performers !nimal shows !isle concession sales Multiple show arenas • • Reduce )un and humor &hrill and danger Create • • • • &heme 'efined environment Multiple productions !rtistic music and dance • Raise *ni+ue venue www.study Marketing.org 0 .

'each beyond existing demand 0.Build execution into strategy www.org 13 ..study Marketing.. not the numbers /.2vercome key organi3ational hurdles ..1et the strategic se+uence right )#ecution $rinci%les .'econstruct market boundaries ..Si# $rinci%les o& Blue Ocean Strategy For!ulation $rinci%les .)ocus on the big picture.

For!ulating Blue Ocean Strategy www.study Marketing.org 11 .

1. Reconstruct Market Boundaries 4ead5to54ead Strategy Blue Ocean Strategy • • )ocus on rivals within industry )ocuses on competitive position within strategic group • • • 4ooks across alternative industries 4ooks across strategic group within industry 'edefines the industry buyer group • )ocuses on better serving the buyer group www.org 12 .study Marketing.

Reconstruct Market Boundaries 4ead5to54ead Strategy Blue Ocean Strategy • )ocuses on maximi3ing the value of product or service offerings within the bounds of its industry • 4ooks across to complementary product and service offerings • 5articipates in shaping external trends over time • )ocuses on adapting to external trends as they occur www.org 13 .study Marketing.1.

2.study Marketing. not the 6umbers &he )our (teps of 7isuali3ing (trategy • • • • www.org 7isual !wakening 7isual Exploration 7isual (trategy )air 7isual Communication 1" . Focus on t1e Big $icture6 not t1e 7u!/ers )ocus on the Big $icture.

Focus on t1e Big $icture6 not t1e 7u!/ers • Visual wakening Compare your business with your competitors" by drawing your 8as is9 strategy canvas (ee where your strategy needs to change • www.2.org 1' .study Marketing.

org 1( .study Marketing. or change • • www. create.2. Focus on t1e Big $icture6 not t1e 7u!/ers • Visual )#%loration 1o to the field to explore the six paths to creating blue oceans 2bserve the distinctive advantages of alternative products and services (ee which factors you should eliminate.

Focus on t1e Big $icture6 not t1e 7u!/ers Visual Strategy Fair • :raw your 8to be9 strategy canvas based on insights from field observations 1et feedback on alternative strategy canvases from customers.study Marketing.org 1. and noncustomers *se feedback to build the best 8to be9 future strategy • • www. competitors" customers.2. .

Focus on t1e Big $icture6 not t1e 7u!/ers • Visual Co!!unication :istribute your before and after strategic profiles on one page for easy comparison (upport only those pro.study Marketing.org 1- .2.ects and operational moves that allow your company to close the gap to actuali3e the new strategy • www.

ne#%lored: non5 custo!ers who are in markets distant from yours www.ump ship • (econd tier# 9Re&using: non5 custo!ers who consciously choose against your market • &hird tier# 9.3.org 10 T1e T1ree Tier o& 7on5 custo!ers . Reac1 Beyond )#isting 8e!and • )irst tier# 9Soon to /e: non5 custo!ers who are the edge of your market.study Marketing. waiting to .

org 23 . <et T1e Strategic Se2uence Rig1t T1e Se2uence o& Blue Ocean Strategy Buyer utility Is there exceptional buyer utility in your business idea% $rice Is your price easily accessible to the mass of buyers% Cost Can you attain your cost target to profit at your strategic price% do%tion $hat are the adoption hurdles in actuali3ing your business idea% co!!ercially via/le /lue ocean idea www.study Marketing.".

study Marketing.)#ecuting Blue Ocean Strategy www.org 21 .

'.study Marketing.org 22 . Overco!e =ey Organi>ational 4urdles Overco!e =ey Organi>ational 4urdles Cognitive 4urdle Resource 4urdle Motivational 4urdle $olitical 4urdle www.

Overco!e =ey Organi>ational 4urdles Cognitive 4urdle *status 2uo+ • • 'ide the 8Electric (ewer9 Meet with :isgruntled Customers • Resource 4urdle • • www.org 'edistribute resources to your hot spots 'edirect resources from your cold spots Engage in horse trading 23 .'.study Marketing.

org 2" .'. Overco!e =ey Organi>ational 4urdles • Motivational 4urdle • • <oom in on =ingpins >key influencers? 5lace kingpins on a fishbowl !tomi3e to get the organi3ation to change itself • $olitical 4urdle • (ecure a consigliere on your top management team 4everage your angels and silence your devils www.study Marketing.

Build )#ecution ?nto Strategy Fair $rocess o& Strategy (trategy )ormulation 5rocess )air 5rocess @ Engagement.'.org 2' . Explanation. Expectation clarity !ttitudes &rust and Commitment @ 8I feel my opinion counts9 Behavior 7oluntary Cooperation @ 8I"ll go beyond the call of duty9 (trategy Execution Exceeds Expectation @ self initiated www.study Marketing.

BB( 5ublication www.study Marketing.Source o& Re&erence • $.Chan =im and 'enAe Mauborgne. Blue Ocean Strategy.org 2( .

.study Marketing.org 2.)nd o& Material www.

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