1.

The Buyer Utility Map is a 6 by 6 matrix which identifies both stages of the buyer experience
and the six utility levers that can be used to develop your messaging and strategy.

The purpose of the buyer Utility Map is to help think about unaddressed pain points in the
industry.  There could be several currently unidentified pain points which will help one to better
prepare his Strategy Canvas. The buyer utility map helps you better understand where your Blue
Ocean opportunities lie or where there are significant problems worth solving (and therefore the
buyer worth paying for).  The map outlines the full range of experiences buyers or users have in
using your industry’s offering.  In so doing, it reveals the problems the industry has failed to
address and therefore where opportunities exist for Blue Oceans.  Most entrepreneurs focus
exclusively on the efficiency and effectiveness of their solution and don’t fully explore other
potential opportunities.

This is a compelling way to determine your Blue Ocean Strategy and helps to make sure that you
are not missing key aspects of your Strategy Canvas and overall Blue Ocean approach.

The Six Utility Levers are:

1. Customer Productivity:  What are the biggest current blocks to productivity for the
users of the product?  Anything to do with efficiency, less time or effort and/or money
spent.
2. Simplicity:  Are there ways to simplify their jobs or their use of the product.  Eliminating
complexity or mental hassle.
3. Convenience:  Are their obstacles to the convenience of the application?  When and
where I want something like 24/7, 365
4. Risk Reduction:  Are their ways to reduce the risk of the purchase or use of the product?
Risks include financial, physical, emotional.
5. Fun and Image: Are their ways to increase the fun in the product or to enhance the
image of the user or the company?  Maybe the look, feel, attitude and style of an offering.
6. Environmental Friendliness: In theory, this is about “green matters”.    

2. Participating in Shaping External Trends is the path 6 of the Blue Ocean Shift
Many of us respond to trends in our industry at the point they are making an impact. In other
words we create reactive strategies, which allow us to adapt to a changing environment. All
industries are subject to external trends that affect their business over time. Instead of adapting
incrementally and somewhat passively, one can gain insights into how the trend(s) will change
value to customers and impact their organization’s business model.

To assess trends across time, three criteria are critical: the trend must be decisive to the business,
irreversible and have a clear trajectory. By knowing what trends have a high probability of
impacting your industry, are irreversible, and evolving in a clear trajectory, you can open up
unprecedented customer utility.

This process helps us create new perspectives. Our thinking becomes more creative. It seems
simple, because it is. However, it’s when we actually start the process of looking across these six
paths we find our assumptions start to break down and simultaneously we awaken to new
perspectives about our organization and its industry. And it’s from this place that innovations
and new opportunities are created.

3. At first glance, this tool is a simple paper sheet with a large leftward square and the rightward
circle. It is a geometrical collage formed by the customer segment canvas and the value
proposition template. Together they are meant to impart an understanding of what features and
functionalities a product should possess to meet the requirements of a particular category of
users.
Canvas structure

The tool can be shaped either of two circles or squares or other geometric patterns.

The circle

Traditionally, the introduction to the canvas starts with the right part responsible for the customer
profile. The circle is cut into three pieces where you have to define tasks and expectations the
customers are going to fulfill, as well as positive and negative experiences associated therewith.
You do not deal with the product now but only with the end user’s challenges.

 Jobs Value proposition canvas customer jobs include different tasks, problems or wish
the customers are intended to deal with, solve or satisfy. By doing so, you refine the
customer segment from the emotional (preferences, popularity), social (reputation, sense
of duty), and functional (practicability) perspective.

 Pains Based on the above, you can identify what negative/frustrating

outcomes/experiences might be associated with the described jobs. Since the perception
of negative experience differs by versatile categories of users, it is better to cover as
many pains as possible.

 Gains It’s the same with positive experiences the customers have. It should be noted that
pains and gains are not polar notions. I.e., gains should include the things that make
customers satisfied or even happy rather than simply being a converse of the pains. They
may be quite existential and free of any extraordinary nature.
The square

Similar to the circle, the product-related section is divided into three parts. They correspond to
the relevant customer profile section. Here, we deal with the product. The focus is made on
features, functionality, and benefits it can offer to not only attract customers but also meet their
requirements from the right part.

 Products & services Here you can mention not only the product itself but also its
versions like premium, standard or anything like that. This field should not be filled with
a list of features your product will possess. Focus on what you can offer to get the
customer jobs done.

 Pain relievers This section of the value proposition model is responsible for the ability of
your product to solve the defined pains. It is not necessary to describe how the pain is
relieved in details. A simple statement of the fact that eliminates the current frustration
with the job to be done will be enough to put here.

 Gain creators This field is like a mirror image of the one above. The value proposition
canvas gain creators should explain your product’s extra value, which it is going to
provide to customers.

4. ERRC GRID
The Eliminate-Reduce-Raise-Create (ERRC) Grid developed by W. Chan Kim and Renée
Mauborgne is a simple matrix like tool that drives companies to focus simultaneously on
eliminating and reducing, as well as raising and creating while unlocking a new blue ocean.

This analytic tool complements the Four Actions Framework. It pushes companies not only to
ask the questions posed in the Four Actions Framework but also to act on all four to create a new
value curve (or strategic profile), which is essential to unlocking a new blue ocean. The grid
gives companies four immediate benefits:

 It pushes them to simultaneously pursue differentiation and low cost to break the value-
cost trade off.
 It immediately flags companies that are focused only on raising and creating, thereby
lifting the cost structure and often over-engineering products and services – a common
plight for many companies.
 It is easily understood by managers at any level, creating a high degree of engagement in
its application.
  Because completing the grid is a challenging task, it drives companies to thoroughly
scrutinize every factor the industry competes on, helping them discover the range of
implicit assumptions they unconsciously make in competing.

5. The fundamental components of design thinking process are as follows:

1. Empathize

The first stage is that Empathize the user. Designing with empathy incorporates doing the
majority of that and going an additional step. It requires really envisioning the experience of
work, learning, and critical thinking from the audient’s point of view. Empathy gaining is often
described as ‘need-finding’ in that you are discovering people’s explicit and implicit needs so
that you can meet those needs through design. A need is a physical, psychological or cultural
requirement of an individual or group that is missing or not met through existing solutions.

2. Define

The second stage is Defined as a problem. Empathize help to define the problem. ?Therefore,
This stage-based on What you have learned about your customers and the context. During this
phase, you’ll want to organize your research using a different lens, maps or frameworks.

 Empathy Map — organize by consumer thinking/feeling, what they’re experiencing and

pains.

 Customer Journey — organize along with how the consumer shops or interacts with the
product.

 Experience Map — organize around consumer doing, thinking and feeling along the
timeline.

 Affinity Map — organized by a common theme or pattern.

 Point Of View — focusses on your insights about your users and their needs.

The phrase “How might we….” is often used to define a perception, which is a statement of the:
user + need + insight
3. Ideate

“Ideation is the mode of the design process in which you concentrate on idea generation.
Mentally it represents a process of ‘going wide’ in terms of concepts and outcomes.

In this third stage Ideate. It is Brainstorming and coming up with the new creative solution. In
this stage, the team should be starting to “think outside the box” to identify the new creative
solution. Ideating is about inventiveness and fun. In the ideation stage, the amount is supported.
Consequently, No thought is too fantastical and nobody’s thoughts are rejected. Brainstorm and
Worst Possible Idea sessions are commonly used to invigorate free speculation and to grow the
issue space.

4. Prototype

After the ideation, then move on to the Prototype Stage. Design thinking is that you won’t have
any answers about the feasibility of your idea until you test it with real users. This is the purpose
of prototyping. 

A prototype can be a sketch, model, or a cardboard box. But depending on your resources, there
are many ways for you to get creative in this step, using found materials or setting creative
limitations on budget. The prototype is built to think and answer questions that get you closer to
your final solution.

5. Test

The final stage of the Design Thinking process is Test. The purpose of testing is to learn what
works and what doesn’t and then iterate. From here, specific teams or directors may further
refine thoughts or even make the last move to choosing a real idea with which to push ahead.
Regardless, it’s basic to team up transparently with customers and end-users. Be that as it may,
in an iterative procedure, the outcomes produced during the testing stage are regularly used to
reclassify at least one issues and advise the comprehension regarding the users, the states of
utilization, how individuals think, act, and believe, and to sympathize.
6. Look across alternative industries is the path 1 of Blue Ocean shift
The first path in formulating the blue ocean strategy is to find the alternative industries to your
industry iIn order to understand this path let us first understand difference between substitute and
alternative:
  Substitutes are products or services that have different forms but offer the same
functionality or core utility.
 Alternatives are products or services that have different functions and forms but the
same purpose.
For example in entertainment industry, the function is to provide entertainment and the purpose
is to relax, rewind, de-stress, experience and fun. The substitutes to this industry are CDs, TV,
stage shows, etc. But the alternatives to this include visiting a mall, library, hobby centre, etc., all
of which serves the same purpose. Thus by focusing on the key factors that lead buyers to trade
across alternative industries and by eliminating or reducing everything else, you can create a blue
ocean of new market space.

For example: In the case of pro-biotic drink Yakult, it competes with health drinks, juice brands,
at the same time it competes with Pharmacy industry. However, both health drinks producers &
pharmacy brands don’t consider Yakult as their competition. Thus Yakult has created a blue
ocean for itself across industries.

7. Channels: A part of Business model canvas

Your communication, distribution, and sales Channels comprise your company's interface with
customers. Your Channels are customer touch points that play an important role in the customer
experience. Your Channels serve several functions, including:

 Raising awareness among customers about a company's products and services

 Helping customers evaluate a company's Value Proposition
 Allowing customers to purchase specific products and services
 Delivering a Value Proposition to customers
 Providing post-purchase customer support
Types of Channels.

 Owned Direct Owned Channels can be an in-house sales force or a Web site, or retail
stores owned or operated by the organization. Owned Channels have higher margins, but
can be costly to put in place and to operate.

 Partner Indirect Partner Channels are indirect and span a whole range of options, such as
wholesale distribution, retail, or partner-owned Web sites. Partner Channels lead to lower
margins, but they allow an organization to expand its reach and benefit from partner
strengths.

8. The top down process consists of :

 Top-down usually encompasses a vast universe of macro variables while bottom-up is

more narrowly focused.
 Top-down investing strategies typically focus on exploiting opportunities that follow
market cycles while bottom-up approaches are more fundamental in nature.
 While top-down and bottom-up can be very distinctly different they are often each used
in all types of financial approaches like checks and balances.
whereas

The bottom-ups process consists of:

 The bottom-up analysis takes a completely different approach. Generally, the bottom-up

approach will focus its analysis on specific characteristics and micro attributes of an
individual stock. In bottom-up investing concentration is on business-by-business or
sector-by-sector fundamentals. This analysis seeks to identify profitable opportunities
through the idiosyncrasies of a company’s attributes and its valuations in comparison to
the market.

 Bottom-up investing begins its research at the company level but does not stop there.
These analyses weigh company fundamentals heavily but also look at the sector and
microeconomic factors as well. As such, bottom-up investing can be somewhat broad
across an entire industry or laser-focused on identifying key attributes.

9. Cost Structure defines all the costs and expenses that your company will incur while
operating your business model. This final step in the process is important, because it will help
your team decides whether to pivot or proceed.
What are the most important costs inherent in our business model? Which Key Resources are
most expensive? Which Key Activities are most expensive?
 IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price value proposition,
maximum automation, extensive outsourcing), Value Driven (focused on value creation,
premium value proposition).

SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, and utilities), Variable costs,
Economies of scale, Economies of scope

There are two main categories of cost structure: value-driven and cost-driven. The focus
of value-driven cost structures is to create more value in the product itself, not necessarily
producing the product at the lowest possible cost. Examples of this would be Prada, Rolex, or
Ritz-Carlton. On the other hand, cost-driven cost structures focus on minimizing the costs of the
product or service as much as possible. Examples would be Wal-Mart and Southwest Airlines.

10. AS IS STRATEGY CANVAS

Chan Kim and Renée Mauborgne’s Strategy Canvas is a central diagnostic tool and an action
framework that graphically captures, in one simple picture, the current strategic landscape and
the future prospects for an organization.

The horizontal axis on the strategy canvas captures the range of factors that an industry competes
on and invests in, while the vertical axis captures the offering level that buyers receive across all
of these key competing factors. A value curve or strategic profile is the graphic depiction of a
company’s relative performance across its industry’s factors of competition.

The strategy canvas allows your organization to see in one simple picture all the factors an
industry competes on and invests in, what buyers receive, and what the strategic profiles of the
major players are. It exposes just how similar the players’ strategies look to buyers and reveals
how they drive the industry toward the red ocean. Importantly, it creates a commonly owned
baseline for change.
11. Rethink the functional-emotional orientation of an industry

Emotional Appeal to buyers refers to the emotional utility a buyer receives in the consumption
or use of a product or service. Competition tends to converge on one of two possible basis of
appeal. ‘What are the extras we offer that add to the cost of our product without enhancing
functionality? By eliminating or reducing these factors, can we create a simpler, functional,
lower-priced, lower-cost offering that would dramatically raise buyers’ value’. These are to be
questioned in blue ocean strategic formulation.
Functional Appeal to buyers refers to the functional utility buyers receive from a business or
product/service based on basic calculations of utility and price. Competition in an industry tends
to converge on one of two possible basis of appeal. What emotional elements can we raise or
create to infuse our commodity products with new life by adding a dose of emotion?
By understanding your industry focus on functionality or emotional appeal, you can either
compete on emotional appeal by stripping functional elements or compete on functionality by
adding emotional elements.

For example: Fast Food producer, Subway uses emotional appeal to trade up its range of
products which usually have more functional appeal rather than emotional. Fast food industry is
driven by price and waiting time which are functional. This industry rarely competes on
emotional appeal

12. A business model is a company's plan for making a profit and it identifies the products or
services the business will sell the target market it has identified, and the expenses it anticipates.
A new business in development has to have a business model, if only in order to
attract investment, help it recruit talent, and motivate management and staff. Established
businesses have to revisit and update their business plans often or they'll fail to anticipate trends
and challenges ahead. Investors need to review and evaluate the business plans of companies that
interest them.

Whereas, Simply by thinking of ourselves as single-person enterprises with “personal business

models.”

For example, we all work for others (Customers), helping them complete the jobs they need to
have done (Provide Value) — and we do so through various mediums (Channels). Of course, we
don't usually use business terms to discuss our work. But that's where the Canvas proves
useful. When we use its structure and language to help us describe what we do, we open the
door to personal and professional innovation.