2/11/2019

Blue Ocean Strategy – Value

Innovation Logic ERRC
ANJUM FAYYAZ
SDSB, LUMS

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Value Innovation, Strategy Canvas and ERRC
Value innovation logic
Higher value @ higher cost or reasonable value @ lower cost; strategy to choose
between differentiation & low cost
Value innovation; simultaneous pursuit of differentiation & low cost
Strategy Canvas as a Diagnostic Framework
“As Is” strategy canvas; captures current state of play in your context or known
market space
Four key elements of strategy: factors of competition, the offering level buyers
receive across key competing factors, a company’s and its competitor's cost
structure, and their strategic profile
Strategy canvas illustrates how a business competes, who it competes with,
where/if its strategy diverges from the competition

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 2/11/2019

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Value Innovation, Strategy Canvas and ERRC

Strategy Canvas as an Action Framework

“To Be” strategy meets 3 criteria; focus, divergence, compelling tagline; compelling
strategy
Four Action Framework and ERRC Grid
Differentiation and low cost create new value curve; focused, divergent and has
compelling tagline; four key questions:
1. Which of the factors that the industry takes (or you take) for granted should be eliminated?
2. Which factors should be reduced will below the industry’s standards (or your previous
practices)?
3. Which factors should be raised well above the industry’s standards (or behavioral norms)?
4. Which factors should created that the industry has never offered (innovation / creativity)?

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BOS Value Innovation

• Cornerstone of blue ocean strategy; simultaneous pursuit of differentiation & low cost
• Focus on making competition irrelevant; creating a leap of value for buyers & company
• opening up new and uncontested market space
• Value to buyers; offering’s utility minus its price; value to company generated from offering’s price
minus cost; value innovation achieved only when; whole system of utility, price & cost aligned