Blue Ocean Strategy – [yellow tail]

APURV MOGRA –
FT201016
ASHWATH RAM –
FT201022
BHAVYA SRI – FST201029
GARIMA GAUR – FT201035
JENIX R – FT201041
MADHUMITHA S –
FT201048

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 What did yellow tail do, which the existing, incumbent players
were unable to?

• They created a new market space for the non-customers by implementing Blue
Ocean Strategy
• Eliminated the ‘Wine aging’ factor, tannins, oak and taste complexities
• Provided ease of selection by selling two varieties only, removing technical jargons
from box, creating a non-traditional kangaroo on the box
• Facilitated ease of selection by relieving the intimidation of the sales staff by
providing Australian outback clothing
• Manufacturing same bottle shape for both red and white wine thereby reducing
costs
• Created a brand image that resonated with the broader alcoholic beverage
consumers

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 Questions and Implementation of the Four-
Action Framework

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 Why were they successful, while
others not?

• Cost effectiveness of [yellow tail]

• Minimal spending on marketing and advertising
• Less spending on packaging and through minimising warehouse storage costs

• [yellow tail] identified new factors for customers: Easy Drinking, Ease of Selection
and Fun & Adventure and then focused on making these factors as their Value
Proposition.
• Yellow Tail pulled 6 million new customers into the wine market by reconstructing
the market boundaries.
• With the simple fruity sweetness, [yellow tail] reduced or eliminated irrelevant
factors which in turn reduced their working capital and created a faster payback
for the wine produced.
• While the traditional major players targeted at the premium end of the market,
Yellow tail resonated with the general public.

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 What are the key takeaway?
• When the supply exceeds demand, competing for a share of contracting industries will make it
difficult to sustain high performance.
• New profit and new growth opportunities can be created through the Blue Ocean Strategy
• In the blue ocean strategy, market boundaries and industry structure are not given and can be
reconstructed by the actions and beliefs of industry players
• In the Blue Ocean, the strategic aim is to create new rules of the game by breaking the existing
value/cost trade-off
• To increase profitability through the blue ocean strategy, it is important to systematically look
across the established boundaries of competition and reorder the existing elements in different
markets to reconstruct them into a new market space where a new level of demand is
generated
• Creation of blue oceans drives the costs down and the value up for the buyers. This happens
only when the whole system of the company’s utility, price, and cost activities is properly
aligned.
• To shift the strategy canvas of an industry, the company must reorient its focus from
competitors to alternatives and from customers to non-customers of the industries.
• An effective blue ocean strategy has focus, divergence and a compelling tagline.
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