Industry convergence refers to the phenomenon where companies in different industries start to

compete with each other by offering similar products or services. This can occur due to technological
innovations, changes in consumer behavior, or shifts in market dynamics.

One example of industry convergence is the convergence between telecommunications and media
industries. In the past, telecommunications companies focused on providing phone and internet
services, while media companies focused on producing and distributing content such as movies, TV
shows, and music. However, with the rise of streaming services such as Netflix and Hulu,
telecommunications companies began to offer similar services and compete with media companies.
Likewise, media companies began to offer streaming services and compete with telecommunications
companies.

Another example of industry convergence is the convergence between the automotive and technology
industries. With the rise of electric vehicles and autonomous driving technology, traditional automotive
companies are now competing with tech companies such as Tesla, Google, and Apple, which are
developing their own vehicles and autonomous driving technology.

Industry convergence can lead to increased competition, but it can also create new opportunities for
companies to expand their business and reach new customers. Companies that are able to successfully
navigate industry convergence can gain a competitive advantage by offering a wider range of products
and services and staying ahead of changing market trends.

ChatGPT

Sure, here's another example:

Define objectives: Let's say you're launching a new line of premium coffee aimed at young urban
professionals who are willing to pay a premium for high-quality, sustainably sourced coffee. You want
your brand to convey sophistication and refinement, and you're targeting a demographic of coffee
lovers between the ages of 25 and 35.

Generate names: You and your team might spend some time brainstorming potential brand names using
a variety of techniques. For example, you might come up with names like LuxeRoast, ArtisanCafe, or
HeritageBeans.

Screen initial candidates: After generating a list of potential names, you would start to narrow down the
options based on various criteria. For example, you might eliminate any names that are too similar to
existing coffee brands or that don't convey the right tone or personality.

Study candidate names: With a smaller list of potential names, you would conduct more research to see
how each name might perform in the real world. For example, you might survey a group of coffee
drinkers in your target demographic to get feedback on each name's appeal, or you might test how
memorable each name is by having people try to recall them a day or two after hearing them.

Research the final candidates: Once you've identified a few strong contenders, you would conduct more
in-depth research to make sure there are no trademark or legal issues associated with the names. For
example, you might search the U.S. Patent and Trademark Office's database to see if any of your
potential names are already in use by other coffee companies.

Select the final name: After all of this research, you might decide that "LuxeRoast" is the strongest name
for your new coffee brand. It conveys a sense of luxury and sophistication, and it's easy to remember
and pronounce. From there, you would start building your brand around this name, designing packaging,
marketing materials, and in-store displays that reinforce the brand's core values and appeal to your
target audience.
ChatGPT Fe

Value innovation is a central concept in blue ocean strategy, which is a business strategy that seeks to
create new market space by developing and offering innovative products or services that meet the
needs of customers in a unique way. Value innovation is the process of creating a product or service that
offers superior value to customers while also reducing costs.

Pakistan is a country with a growing economy and a diverse population, making it an ideal place to
explore examples of value innovation. Here are some examples of value innovation in Pakistan:

Telenor EasyPaisa: Telenor, a Norwegian telecommunications company, introduced EasyPaisa, a mobile

banking service in Pakistan in 2009. This service allows customers to conduct transactions such as
money transfers, bill payments, and mobile top-ups through their mobile phones. This service has been
particularly successful in Pakistan because it provides a low-cost, convenient and secure way for people
to send and receive money, particularly those who do not have access to traditional banking services.

Careem: Careem is a ride-hailing service that was launched in Pakistan in 2015. The service provides
affordable and reliable transportation to customers in Pakistan’s major cities. Careem has succeeded in
Pakistan because it offers a better value proposition than traditional taxis. The service is more
convenient, reliable, and provides a better customer experience.

Sabzi.pk: Sabzi.pk is an online grocery delivery service that was launched in Pakistan in 2016. The service
allows customers to order groceries online and have them delivered to their doorstep. Sabzi.pk has been
successful because it offers customers a convenient and efficient way to shop for groceries, particularly
those who are busy or have limited access to transportation.

In conclusion, value innovation is an important concept in blue ocean strategy and can lead to the
creation of new market space and the development of successful businesses. The above examples from
Pakistan demonstrate how companies can create innovative products or services that offer superior
value to customers while also reducing costs.
ChatGPT Fe

The Strategy Canvas is a central diagnostic tool in Blue Ocean Strategy, a framework for creating new
market spaces and uncontested market growth. The strategy canvas is a visual representation that
compares a company’s current state of play with that of its competitors across key industry factors. The
canvas shows a company’s strategy on two dimensions: value proposition and cost structure.

On the horizontal axis, the value proposition, the canvas outlines the key factors that an industry
competes on and how a company’s offering performs on each factor. On the vertical axis, the cost
structure, the canvas shows the relative cost of delivering the value proposition to customers.

The canvas provides a clear, visual understanding of how a company differentiates itself from its
competitors and the areas where it can create new value for customers. By analyzing the strategy
canvas, companies can identify opportunities to create a blue ocean – a new, uncontested market space
– by creating a value proposition that differs significantly from those of existing competitors while
reducing costs.

The strategy canvas serves as a starting point for developing a blue ocean strategy by focusing on
customer needs, competitive offerings, and costs. Companies can use the canvas to assess where they
currently stand in the market, identify areas of differentiation, and develop a new value proposition that
creates a blue ocean of uncontested market space.

2/2
NetJets is a company that offers fractional ownership of private jets, enabling individuals and businesses
to enjoy the benefits of private jet travel without having to buy and maintain a full aircraft. Let’s
consider NetJets as an example to illustrate the use of the strategy canvas in Blue Ocean Strategy.

Example:

The horizontal axis of the canvas represents key factors that customers consider when purchasing
private jet travel, such as aircraft type, cabin size, range, speed, availability, and flexibility. The vertical
axis represents the cost structure, i.e., the relative cost of delivering the value proposition to customers.

Diagram:

In the diagram below, we compare the strategy canvas of NetJets and traditional private jet ownership
in the aviation industry.

NetJets Strategy Canvas Example

On the horizontal axis, we see that NetJets competes on similar factors as traditional private jet
ownership, such as aircraft type and range. However, NetJets differentiates itself by offering more
flexibility and availability to customers, allowing them to fly on-demand without having to worry about
aircraft maintenance, pilot training, and scheduling.

On the vertical axis, we see that NetJets has a lower cost structure than traditional private jet ownership
because it spreads the fixed costs of aircraft ownership across multiple customers. This enables NetJets
to offer private jet travel at a more affordable price point while still maintaining high standards of safety
and service.

By analyzing this strategy canvas, we can see that NetJets has created a blue ocean by differentiating
itself in the market and providing a unique value proposition to customers. Traditional private jet
ownership, on the other hand, competes in a red ocean, where it struggles to stand out from its
competitors.

This analysis highlights the importance of creating a unique value proposition that differentiates a
company from its competitors and identifies new areas of uncontested market space. The strategy
canvas provides a simple but effective tool to help companies achieve this goal.

The Four Actions Framework is a strategic tool developed by W. Chan Kim and Renee Mauborgne,
authors of the book “Blue Ocean Strategy.” The framework helps organizations to break away from
industry norms and create a new market space by focusing on four key actions that they can take to
differentiate themselves from their competitors.

The four actions are:

Eliminate: This involves removing or reducing certain factors that the industry has long competed on. By
eliminating certain features or factors, an organization can create a simpler and more streamlined
product or service, which can help them stand out from competitors.

Example: Cirque du Soleil, the Canadian entertainment company, eliminated the use of animals in its
shows to reduce the cost of transportation, feeding, and training. This enabled them to create a new
market space in the entertainment industry, where they could offer a more humane and innovative
form of entertainment.

Reduce: This involves reducing certain features or factors that are considered essential in the industry,
but which can be reduced without sacrificing the overall value of the product or service. By doing so, an
organization can create a more cost-effective offering that can attract a new market of customers.

Example: Southwest Airlines, the low-cost carrier, reduced the cost of in-flight meals, assigned seating,
and hub-and-spoke routing system, enabling them to offer cheaper tickets to passengers who were
willing to forego these features.

Raise: This involves increasing certain features or factors that the industry has long competed on to offer
a higher value proposition to customers. By doing so, an organization can create a differentiated product
or service that can command a premium price.

Example: Apple, the technology company, raised the design, quality, and customer experience of its
products and services, enabling them to charge premium prices for their iPhones, iPads, and MacBooks.
Create: This involves creating entirely new features or factors that the industry has never offered before.
By doing so, an organization can create a new market space where they have no direct competitors.

Example: Netflix, the online streaming service, created an entirely new business model by offering a
subscription-based streaming service, allowing customers to watch movies and TV shows anytime,
anywhere. This enabled them to create a new market space in the entertainment industry, where they
could offer an alternative to traditional TV and movie rentals.

Ben 10

Explain with pakistani Brand example

Sure, I’ll provide you with a Pakistani brand example for each of the four actions in the Four Actions
Framework.

Eliminate: Warid Telecom, a Pakistani telecommunications company, eliminated the need for customers
to purchase separate packages for voice calls, text messaging, and data usage. Instead, they introduced
a single package that combined all three, simplifying the customer’s experience and differentiating
themselves from their competitors who offered separate packages.

Reduce: Khaadi, a Pakistani fashion and lifestyle brand, reduced the number of collections they
produced each year from four to two. This reduced their costs associated with designing, manufacturing,
and distributing collections, allowing them to offer more affordable prices to their customers.

Raise: Shan Foods, a Pakistani spice and seasoning company, raised the quality of their products by using
premium ingredients and focusing on taste and aroma. This enabled them to offer a premium product
that stood out from their competitors in the industry.
Create: Bykea, a Pakistani ride-hailing and delivery service, created an entirely new feature by
introducing on-demand bike and motorcycle ride services to its customers. This enabled them to create
a new market space where they have no direct competitors offering the same service.

Look across alternative industries

Organizations compete not only within the industries but also with organizations in other industries
which produce alternative product and services to their industry.

The first path in formulating the blue ocean strategy is to find the alternative industries to your industry’

In 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.

Let us consider an example from entertainment industry. The function of this industry is to provide
entertainment and the purpose of this industry is relax, rewind, de-stress, experience and fun. The
substitutes to this industry are CDs, TV, stage shows, etc. But the alternatives to this industry 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.

Let us take the case of pro-biotic drink Yakult. It competes with health drinks, juice brands, at the same
time it competes with pharma industry. However, both health drinks producers & pharma brands don’t
consider Yakult as their competition. Thus Yakult has created a blue ocean for itself across industries.

Look across strategic groups within industries:

This involves identifying different groups of customers within an industry and creating a new market
space by targeting a previously overlooked or underserved group.

Another example in Pakistan is the tea company, Tapal. Tapal created a new market space by targeting a
new strategic group within the tea industry: the younger generation. Tapal introduced a range of
flavored tea products and modernized its packaging to appeal to a younger demographic, which was
previously underserved by traditional tea companies in Pakistan.

Look across the chain of buyers:

The chain of buyers refers to the various groups or individuals involved in the buying process, from end-
users to distributors to retailers and wholesalers. By understanding the needs and desires of each group
within the chain of buyers, companies can identify new opportunities for creating value and delivering it
in a unique way.

An example of this strategy in Pakistan is Daraz, an online marketplace that created a new market space
by targeting a new group of buyers: online shoppers. By identifying the need for a convenient, reliable,
and secure online shopping platform, Daraz created a new market space that connects buyers and
sellers across Pakistan.

Look across complementary products and service offerings:

Complementary products and services refer to those that are used in conjunction with a company’s own
products or services. By understanding the range of complementary products and services that
customers are using or may need in the future, a company can identify new opportunities for creating
value and delivering it in a unique way. For example, Starbucks created a new market space by
combining coffee with a social experience that appeals to its customers. By focusing on the
complementary experience of enjoying coffee in a comfortable, social environment, Starbucks was able
to create a new market space with fewer competitors and more growth potential.

Another example in Pakistan is the food delivery service, Cheetay. Cheetay created a new market space
by offering a food delivery service that combines its delivery network with a mobile application that
allows customers to track their orders in real-time. By focusing on the complementary experience of
ordering food online and delivering it quickly, Cheetay created a new market space that appeals to busy,
urban consumers.

Functional appeals refer to the features and benefits of a product or service that serve a practical
purpose for the buyer. These might include things like durability, ease of use, or cost-effectiveness.
Understanding the functional appeals of a product or service can help a company identify areas where
they can differentiate themselves from competitors and create new market space.

Look across functional or emotional appeals to buyers:

Emotional appeals, on the other hand, refer to the feelings and desires that a buyer may have related to
a product or service. These might include things like a desire for status, a need for security, or a longing
for a sense of belonging. Understanding the emotional appeals of a product or service can help a
company identify areas where they can tap into unmet customer needs and create new market space.

By looking across both functional and emotional appeals, companies can identify new opportunities for
creating value and delivering it in a unique way. This can help them to reconstruct market boundaries,
redefine their industry, and create a blue ocean of uncontested market space.
For example, Apple’s iPhone disrupted the mobile phone market by offering not only functional benefits
such as a touch screen and a sleek design, but also emotional appeals such as a sense of luxury and
exclusivity. By understanding the emotional needs of their target customers, Apple was able to create a
new market space and differentiate themselves from competitors.

Looking across time

Looking across time refers to anticipating future trends and shifts in customer needs and desires. By
understanding the changing needs and desires of customers over time, companies can identify new
opportunities for creating value and delivering it in a unique way.

Look across time:

Another example in Pakistan is the ride-hailing service, Careem. Careem created a new market space by
anticipating the shift from traditional taxi services to on-demand ride-hailing services. By identifying the
need for a reliable, convenient, and safe transportation option in Pakistan’s major cities, Careem created
a new market space that connects riders and drivers through a mobile application.

Airbnb disrupted the hotel industry by anticipating a shift in customer needs and desires. They
recognized that many travelers were looking for more unique and authentic experiences when they
traveled, rather than simply staying in generic hotels. By creating a platform that allowed homeowners
to rent out their spare rooms or entire homes to travelers, Airbnb was able to create a new market
space for itself in the travel industry.

Pioneer approach emphasizes taking a long-term, visionary approach to strategy and decision-making.
Rather than focusing solely on short-term gains or immediate profitability, Pioneers seek to create
lasting value by identifying and pursuing innovative opportunities that align with their overall mission
and values.

This might involve investing in research and development to create new products or services, or
exploring new markets and business models that have the potential for significant growth. Pioneers are
often willing to take calculated risks and experiment with new ideas, recognizing that failure is a
necessary part of the process of innovation and growth.

By focusing on the big picture and pursuing ambitious goals, Pioneers can differentiate themselves from
competitors and create a sustainable advantage over the long term. They are often able to attract top
talent and build a loyal customer base by offering products or services that are truly innovative and
unique.
Daraz.pk: Daraz.pk is a pioneer in the e-commerce industry in Pakistan, offering a platform that connects
buyers and sellers in the country. It introduced online shopping to many people in Pakistan who had
never shopped online before.

EasyPaisa: EasyPaisa is a pioneer in the mobile banking industry in Pakistan, offering a platform that
allows users to send and receive money through their mobile phones. It introduced mobile banking to
many people in Pakistan who had never used traditional banking services before

Apple iPhone: When the iPhone was first introduced in 2007, it was a pioneer product that
revolutionized the mobile phone industry. It introduced new features such as a touch screen interface
and an app store, which set it apart from existing products.

Tesla electric cars: Tesla’s electric cars are pioneers in the automotive industry, offering a new type of
vehicle that runs on electricity rather than fossil fuels. They offer unique features such as advanced
autonomous driving capabilities and a sleek design that sets them apart from traditional cars.

The Migrator approach emphasizes a more incremental and iterative approach to strategy and decision-
making. Rather than pursuing radical innovation or disruption, Migrators seek to build on existing
strengths and capabilities to improve efficiency, reduce costs, and maintain competitiveness.

This might involve refining existing products or services to better meet customer needs, streamlining
internal processes to increase efficiency, or expanding into new markets or geographies that are closely
aligned with the company’s core strengths. Migrators are often focused on optimizing performance and
maximizing profitability, rather than taking significant risks or pursuing radical change.

By taking a more measured and cautious approach, Migrators can often maintain stability and avoid the
pitfalls of rapid growth or overextension. They may also be better positioned to weather economic
downturns or other external shocks, since their focus on efficiency and optimization can help them
weather difficult conditions.

However, the Migrator approach can also be limiting in some respects, since it may not allow for the
same level of creativity or innovation as the Pioneer approach. In a rapidly changing market, Migrators
may find themselves struggling to keep up with more agile and disruptive competitors.

Careem: Careem is a migrator in the ride-hailing industry in Pakistan, entering the market after Uber and
offering similar services such as ridesharing. It has lower prices than traditional taxis and offers a more
convenient app-based booking system.
JazzCash: JazzCash is a migrator in the mobile banking industry in Pakistan, entering the market after
EasyPaisa and offering similar services such as mobile money transfers. It has lower fees than traditional
banking services and offers a more convenient mobile app.

Samsung smartphones: Samsung smartphones are migrators in the mobile phone industry, entering the
market after the iPhone and offering similar features such as touch screens and app stores. They have
lower profit margins than the iPhone but attract a larger customer base due to their lower prices.

Google Chrome: Google Chrome is a migrator in the web browser industry, entering the market after
Internet Explorer and offering similar features such as tabbed browsing and bookmarking. It has lower
profit margins than Internet Explorer but attracts a larger customer base due to its faster speed and
better user experience.

The Settler approach emphasizes a focus on stability and maintaining the status quo. Settlers tend to be
risk-averse and conservative in their decision-making, preferring to stick with proven strategies and
established practices rather than pursuing significant innovation or change.

This might involve prioritizing cost control and risk mitigation, rather than pursuing growth or expansion.
Settlers may be more focused on maintaining profitability than pursuing rapid growth or market share,
and may be hesitant to invest in new technologies or business models that are unproven or outside their
core competencies.

While the Settler approach can provide a measure of stability and predictability in uncertain times, it can
also be limiting in terms of long-term growth and competitiveness. Settlers may struggle to adapt to
rapidly changing market conditions or technological disruptions, and may find themselves falling behind
more agile and innovative competitors.

Overall, the Settler approach may be most appropriate for businesses that are operating in mature,
stable industries where there is little potential for significant growth or change. In these contexts,
maintaining a steady course and minimizing risk may be the most effective strategy for long-term
success.

Surf Excel: Surf Excel is a settler in the laundry detergent industry in Pakistan, offering a basic level of
cleaning functionality at a low price point. It competes on price with newer, more innovative laundry
detergents that offer advanced features such as stain removal.

Nokia feature phones: Nokia feature phones are settlers in the mobile phone industry in Pakistan,
offering a basic level of functionality for making calls and sending text messages at a low price point.
They compete on price with smartphones that offer more advanced features such as touch screens and
app stores.

DVD players: DVD players are settlers in the home entertainment industry, offering a basic level of
functionality for playing DVDs. They have low profit margins and compete on price with newer
technologies such as streaming services.

Flip phones: Flip phones are settlers in the mobile phone industry, offering a basic level of functionality
for making calls and sending text messages. They have low profit margins and compete on price with
smartphones that offer more advanced features.

Tier 1: Soon-to-be noncustomers – These are customers who are currently using your product or service,
but are likely to switch to a competitor soon. They may be dissatisfied with your offering, but have not
yet made a switch. Companies can target this tier by identifying the reasons why customers are
dissatisfied and addressing those pain points.

Tier 2: Refusing noncustomers – These are customers who have actively chosen not to use your product
or service, and have opted for a competitor or alternative solution instead. Companies can target this
tier by identifying the reasons why customers have refused to use their product, and finding ways to
differentiate their offering to meet the needs of these customers.

Tier 3: Unexplored noncustomers – These are customers who have never been targeted by your industry
or have never considered using your product or service. Companies can target this tier by identifying
groups of customers who have unmet needs or pain points that are not being addressed by any existing
offerings, and creating a new market space to meet those needs.

By identifying and targeting noncustomers across all three tiers, companies can create a Blue Ocean
Strategy that differentiates their offering and creates a new market space that is free from competition.

Apple – Tier 1: Soon-to-be noncustomers – Apple recognized that there was a growing market of
customers who were experiencing pain or discomfort with traditional PCs and were looking for a simpler
and more intuitive user experience. They targeted this tier by creating the Macintosh, which was easy to
use and had a graphical user interface that was different from the command-line interfaces of
traditional PCs.
Dollar Shave Club – Tier 2: Refusing noncustomers – Dollar Shave Club recognized that there was a large
market of customers who were unhappy with the high price and lack of quality of existing razor options.
They targeted this tier by offering a subscription-based service that delivered high-quality razors at an
affordable price.

Tesla – Tier 3: Unexplored noncustomers – Tesla recognized that there was a growing market of
customers who had never considered buying an electric car, and were skeptical of the performance and
reliability of such vehicles. They targeted this tier by creating high-performance electric cars that were
sleek, stylish, and environmentally friendly.

By targeting all three tiers of noncustomers, these brands were able to create a Blue Ocean Strategy that
differentiated their offerings and created a new market space that was free from competition. This
helped them to become successful and innovative players in their respective industries.

Ben 10

Pakistani brands examples

Here are some examples of Pakistani brands that have successfully targeted the three tiers of
noncustomers:

Careem – Tier 1: Soon-to-be noncustomers – Careem recognized that there was a growing market of
customers who were experiencing pain or discomfort with traditional taxi services and were looking for
a simpler and more convenient user experience. They targeted this tier by creating a ride-hailing service
that was easy to use, affordable and offered a better user experience than traditional taxis.

TPL Maps – Tier 2: Refusing noncustomers – TPL Maps recognized that there was a large market of
customers who were unhappy with the lack of quality and accuracy of existing digital mapping options.
They targeted this tier by creating a mapping service that was more accurate, detailed and up-to-date
than existing options.

Daraz – Tier 3: Unexplored noncustomers – Daraz recognized that there was a growing market of
customers who had never considered buying products online, and were skeptical of the quality and
authenticity of such products. They targeted this tier by creating an online marketplace that offered a
wide variety of products, authentic items, and convenient delivery options.

By targeting all three tiers of noncustomers, these Pakistani brands were able to create a Blue Ocean
Strategy that differentiated their offerings and created a new market space that was free from
competition. This helped them to become successful and innovative players in their respective
industries.

Buyer Utility: To create a new market space, companies need to start by understanding the buyer’s
utility, which refers to the value that customers place on a product or service. This involves identifying
the factors that drive customer value, such as functionality, ease of use, aesthetics, and emotional
appeal. By focusing on buyer utility, companies can create products or services that meet unmet needs
and offer a unique value proposition.

Price: The second step is to determine the price of the product or service. This involves understanding
the value that the product or service provides to customers and setting a price that reflects that value. In
a Blue Ocean Strategy, companies aim to create value that exceeds the price, which can help to attract
new customers and increase market share. To do this, companies may need to rethink traditional pricing
models and explore innovative pricing strategies that reflect the unique value proposition of the product
or service.

Cost: The third step is to determine the cost structure of the product or service. This involves identifying
ways to reduce costs without compromising quality or value. By lowering costs, companies can create a
sustainable competitive advantage that allows them to offer their products or services at a lower price
than competitors. To do this, companies may need to rethink their supply chain, production processes,
and sourcing strategies.

Adoption: The final step is to focus on adoption, which involves developing a strategy for promoting and
distributing the product or service to customers. This includes identifying the target market, developing
marketing and sales strategies, and creating channels for distribution. By focusing on adoption,
companies can increase the rate at which customers adopt their products or services, which can help to
increase market share and profitability.

Overall, the strategic sequence of the Blue Ocean Strategy is designed to help companies create
uncontested market spaces and achieve sustainable competitive advantage. By focusing on buyer utility,
price, cost, and adoption, companies can create innovative products or services that meet unmet needs,
offer a unique value proposition, and attract new customers.

The Buyer Utility Map is a tool that businesses can use to understand and improve the value proposition
of their product or service. The map consists of two main components: the Buyer Experience Cycle and
the Six Utility Levers.

The Buyer Experience Cycle represents the different stages that a buyer goes through when purchasing
and using a product or service. These stages include:

Purchase: This is the moment when the customer decides to buy the product or service. Businesses can
create value for customers at this stage by making the purchasing process easy and convenient, and by
providing relevant information about the product or service.

Delivery: This stage involves the process of receiving or accessing the product or service. Businesses can
create value for customers at this stage by ensuring that the product or service is delivered quickly and
efficiently, and by providing clear instructions on how to access or use the product or service.

Use: This stage involves the experience of using the product or service. Businesses can create value for
customers at this stage by making the product or service easy to use and by providing helpful features
and functionality.

Supplements: This stage involves additional products or services that enhance the value of the initial
purchase. Businesses can create value for customers at this stage by offering complementary products
or services that enhance the value of the original purchase.
Maintenance: This stage involves the process of keeping the product or service in good condition.
Businesses can create value for customers at this stage by providing helpful maintenance instructions
and by offering support if the product or service requires maintenance or repairs.

Disposal: This stage involves the process of disposing of or replacing the product or service. Businesses
can create value for customers at this stage by offering a convenient and environmentally friendly way
to dispose of or replace the product or service.

The Six Utility Levers represent the six ways in which a product or service can create value for its
customers. These levers include:

Customer productivity: This lever relates to the degree to which the product or service helps the
customer to be more productive or efficient. Businesses can create value for customers by offering
products or services that help them save time or improve their productivity.

Simplification: This lever relates to the extent to which the product or service simplifies the customer’s
life or work. Businesses can create value for customers by offering products or services that make their
lives easier and more convenient.

Risk reduction: This lever relates to the degree to which the product or service reduces the customer’s
risk or uncertainty. Businesses can create value for customers by offering products or services that help
them feel more secure and confident.

Convenience: This lever relates to the extent to which the product or service makes the customer’s life
more convenient. Businesses can create value for customers by offering products or services that save
them time and effort.

Environmental friendliness: This lever relates to the degree to which the product or service is
environmentally friendly or sustainable. Businesses can create value for customers by offering products
or services that are eco-friendly and sustainable.
Fun and image: This lever relates to the extent to which the product or service is enjoyable or enhances
the customer’s image. Businesses can create value for customers by offering products or services that
are fun and enjoyable, or that help them project a certain image or identity.

By mapping the potential value of a product or service across the different stages of the buyer
experience cycle and the six utility levers, businesses can identify areas where they can improve the
value proposition of their offering and create a more compelling proposition for their customers.

Let’s say a company manufactures and sells smart home security cameras. Here’s an example of how
they might use the Buyer Utility Map to improve their value proposition:

Purchase: To create value for customers at this stage, the company could offer easy online ordering,
flexible payment options, and free or discounted shipping.

Delivery: To create value for customers at this stage, the company could offer fast and reliable delivery,
clear instructions on how to set up the camera, and helpful customer support.

Use: To create value for customers at this stage, the company could offer a user-friendly mobile app for
controlling the camera, automatic alerts for motion detection, and high-quality video and audio.

Supplements: To create value for customers at this stage, the company could offer additional products
such as smart locks or outdoor cameras that integrate with the security camera system.

Maintenance: To create value for customers at this stage, the company could offer detailed
maintenance instructions and a warranty that covers repairs or replacements.

Disposal: To create value for customers at this stage, the company could offer a recycling program for
the camera and its components.
Now let’s look at how the company could use the Six Utility Levers to create even more value for
customers:

Customer productivity: To create value for customers in terms of productivity, the company could offer
features such as automatic arm/disarm based on the user’s location, or the ability to set up custom
activity zones to reduce false alarms.

Smartwatch, this might involve features such as integration with calendar apps and email notifications,
as well as the ability to make and receive phone calls and send text messages without needing to pull
out a phone.

Simplification: To create value for customers in terms of simplification, the company could offer easy
installation with no wires or complicated setup, as well as a user-friendly interface that makes it easy to
control the camera and access footage.

Smartwatch, this might involve features such as a user-friendly interface and simple navigation using a
touch screen.

Risk reduction: To create value for customers in terms of risk reduction, the company could offer
features such as two-factor authentication for account security, encrypted video storage, and tamper-
resistant hardware.

Smartwatch, this might involve concerns about data privacy and security, as well as the risk of damage
to the watch from activities such as swimming or intense workouts.

Convenience: To create value for customers in terms of convenience, the company could offer features
such as voice control with Amazon Alexa or Google Assistant, and the ability to view live or recorded
footage from anywhere using a mobile device.

Smartwatch, this might involve features such as wireless syncing with a smartphone, long battery life,
and the ability to easily switch out watch bands for different occasions.

Environmental friendliness: To create value for customers in terms of environmental friendliness, the
company could use eco-friendly materials in the camera and packaging, as well as offer a recycling
program for the camera and its components.

Smartwatch, this might involve features such as energy-efficient components and materials sourced
from sustainable sources.

Fun and image: To create value for customers in terms of fun and image, the company could offer stylish
camera designs and the ability to customize alerts with different sounds and colors.
Smartwatch, this might involve features such as customizable watch faces, fitness tracking features that
enable customers to track their progress and achieve their goals, and the ability to play music and
control other connected devices from the watch.

By using the Buyer Utility Map and the Six Utility Levers, the company can identify areas where they can
improve the value proposition of their smart home security cameras, and create a more compelling
offering for their customers.

Excludability refers to the ability of a company to prevent others from using or consuming a good or
service. A good or service is said to be excludable if the company has control over who has access to it,
and can prevent others from using it without their permission.

For example, if a company has a patent on a new invention, they can prevent other companies from
producing or selling the same product without their permission. The company with the patent has
exclusive rights to use the invention, and can choose to license its use to other companies in exchange
for a fee or royalty. This gives the company with the patent a significant advantage in the market, as
they are the only ones who can legally produce and sell the invention.

Similarly, limited access can also create excludability. For example, a country club may limit access to its
facilities to members only. This creates an excludable good or service, as only those who have paid for a
membership can use the club’s facilities.

When a good or service lacks excludability, it means that anyone can use it without the permission or
involvement of the company that produced it. This creates a risk of free riding, where individuals or
companies can benefit from the product or service without paying for it, and imitation, where
competitors can copy or reproduce the product or service without incurring the costs of development or
innovation.

For example, consider a software program that is widely available on the internet for free. Since the
software is not excludable, anyone can download and use it without paying for it. This creates a risk of
free riding, where individuals or companies can benefit from the software without compensating the
company that produced it. Additionally, the lack of excludability makes it easy for competitors to copy or
reproduce the software, which can reduce the market share and profitability of the original company.

Step 1 of the Blue Ocean Strategy involves identifying the price corridor of the mass market. This can be
done in two ways, the conventional way or the Blue Ocean way.
The conventional way involves looking at products and services that are similar to your offering and
identifying the range of prices that the mass market is willing to pay for these products. This information
can be used to determine the price range that your offering should fall within to be competitive.

In contrast, the Blue Ocean way involves looking outside the industry boundary and identifying products
and services that are not traditionally considered competitors but may offer similar value to customers.
These products and services can be classified into two categories: different form, same function, and
different form and function, same objective.

Different form, same function refers to products or services that offer similar functions as your offering
but may look different or be delivered in a different way. For example, a ride-sharing service like Uber
may be considered a different form of transportation compared to traditional taxis, but both offer the
same function of getting passengers from point A to point B.

Different form and function, same objective refers to products or services that may not offer the same
function as your offering but have the same objective or purpose. For example, a meal kit delivery
service may have a different form and function compared to traditional grocery stores, but both have
the same objective of providing food for customers.

By considering these alternative products and services, the Blue Ocean Strategy can help companies
identify the price corridor of the mass market in a more expansive and creative way, potentially leading
to new market opportunities and differentiation.

Step 2 of the Blue Ocean Strategy involves specifying a level within the price corridor that was identified
in step 1. This level can be determined based on the degree of excludability that the company possesses.

If a company has a high degree of excludability, such as through patents, exclusive assets, or core
capabilities, they may be able to command a higher price point within the price corridor. This is because
the company has a unique advantage that is difficult for competitors to replicate, which can allow them
to maintain a premium price.

On the other hand, if the company does not have a high degree of excludability, they may need to price
their offering at a medium to low price point within the price corridor to remain competitive. This is
because there may be a higher risk of free riding and imitation, which can lead to a more price-sensitive
market.

Ultimately, the level within the price corridor that a company chooses should reflect the unique value
proposition of their offering, their degree of excludability, and the competitive landscape of the market.
By carefully considering these factors, companies can strategically position their offering to capture a
profitable segment of the market while minimizing the risk of competition and imitation.

Ben 10

Real brand example

An example of a company that has successfully implemented step 2 of the Blue Ocean Strategy is Apple.

Apple has a high degree of excludability due to their patented technologies, exclusive hardware and
software capabilities, and strong brand identity. They have differentiated themselves from competitors
by offering unique features and design elements that are difficult to replicate.

As a result, Apple has been able to command a high price point within the price corridor for their
products. For example, the iPhone is priced at a premium compared to other smartphones in the
market. However, consumers are willing to pay this premium due to the unique value proposition that
Apple offers, which includes a seamless user experience, high-quality design, and access to exclusive
features and apps.

On the other hand, companies like Samsung and Google may not have the same level of excludability as
Apple, and therefore may need to price their offerings at a lower point within the price corridor to
remain competitive.
Overall, by carefully considering their degree of excludability and the unique value proposition of their
offerings, companies like Apple can strategically position themselves within the price corridor to capture
a profitable segment of the market.

The three cost levers in the Blue Ocean Strategy are:

Lever 1: Streamlining operations and introducing cost innovations from manufacturing to distribution.
This lever involves finding ways to reduce costs and increase efficiency in every aspect of the business,
from manufacturing to distribution. By doing so, companies can lower their costs and offer their
products at a lower price point than their competitors.

Toyota’s Lean Manufacturing system is a well-known example of Lever 1 in action. The system aims to
reduce waste and improve efficiency by streamlining production processes and involving all employees
in continuous improvement efforts. As a result, Toyota has been able to produce high-quality cars at a
lower cost than many of its competitors.

Dell – Dell has implemented Lever 1 by streamlining their manufacturing and distribution processes to
reduce costs. They have also implemented Lever 2 by partnering with suppliers to improve their supply
chain efficiency.

Lever 2: Partnering in supply chain distribution. This lever involves partnering with other companies in
the supply chain to leverage their expertise and economies of scale. By doing so, companies can reduce
their costs and improve their distribution capabilities.

Walmart is a good example of Lever 2 in action. The company partners with suppliers to improve
logistics and distribution, which helps to reduce costs throughout the supply chain. Walmart also uses its
scale to negotiate lower prices from suppliers, which it can then pass on to consumers in the form of
lower prices.

Netflix – Netflix has implemented Lever 3 by changing the price model of the industry through their
subscription-based streaming service. This has allowed them to differentiate themselves from traditional
video rental companies and capture a significant market share.

Lever 3: Changing the price model of the industry. This lever involves changing the way that prices are
structured within the industry. For example, companies may introduce subscription-based models or
pay-per-use pricing instead of traditional pricing models. This can create new opportunities for cost
savings and differentiation.

Example: HP’s “pay-per-use” pricing model for its servers is a good example of Lever 3 in action. Rather
than requiring customers to buy servers outright, HP offers a flexible pricing model where customers
only pay for the resources they use. This allows customers to scale up or down as needed, and can result
in significant cost savings over time.

Another example is the shift from Blockbuster’s traditional video rental model to Netflix’s subscription-
based streaming model. Netflix disrupted the industry by offering customers unlimited access to a wide
range of content for a flat monthly fee, which was more affordable and convenient than Blockbuster’s
model.

Adoption is the process by which a new product, service, or technology is accepted and adopted by a
particular group of people, such as employees, business partners, or the general public.

Adoption among Employees:

Adoption among employees refers to the process of implementing a new technology or process within
an organization. It involves getting employees to accept and use the new technology or process in their
day-to-day work. Factors that can influence adoption among employees include the perceived utility or
value of the new technology or process, the cost of adoption (e.g., time, effort, and training required),
and the support provided by management and colleagues during the adoption process.

Adoption among Business Partners:

Adoption among business partners refers to the process of getting other companies or organizations to
accept and use a new product or service. It involves building relationships and demonstrating the value
of the new product or service to potential partners. Factors that can influence adoption among business
partners include the perceived utility or value of the new product or service, the cost of adoption (e.g.,
investment required), and the degree to which the product or service aligns with the partner’s business
goals and objectives.

Adoption among the General Public:

Adoption among the general public refers to the process of getting consumers to accept and use a new
product or service. It involves marketing and promoting the product or service to potential customers,
and building brand awareness and loyalty. Factors that can influence adoption among the general public
include the perceived utility or value of the product or service, the price of the product or service, and
the degree to which the product or service meets the needs and preferences of the target market.
Overall, successful adoption depends on the perceived utility, price, and cost of the new product,
service, or technology, as well as the support and resources available to facilitate the adoption process.

ChatGPAdoption is the process by which a new product, service, or technology is accepted and adopted
by a particular group of people, such as employees, business partners, or the general public.

Adoption among Employees:

Adoption among employees refers to the process of implementing a new technology or process within
an organization. It involves getting employees to accept and use the new technology or process in their
day-to-day work. Factors that can influence adoption among employees include the perceived utility or
value of the new technology or process, the cost of adoption (e.g., time, effort, and training required),
and the support provided by management and colleagues during the adoption process.

Adoption among Business Partners:

Adoption among business partners refers to the process of getting other companies or organizations to
accept and use a new product or service. It involves building relationships and demonstrating the value
of the new product or service to potential partners. Factors that can influence adoption among business
partners include the perceived utility or value of the new product or service, the cost of adoption (e.g.,
investment required), and the degree to which the product or service aligns with the partner’s business
goals and objectives.

Adoption among the General Public:

Adoption among the general public refers to the process of getting consumers to accept and use a new
product or service. It involves marketing and promoting the product or service to potential customers,
and building brand awareness and loyalty. Factors that can influence adoption among the general public
include the perceived utility or value of the product or service, the price of the product or service, and
the degree to which the product or service meets the needs and preferences of the target market.

Tesla electric cars are a good example of adoption among the general public. Tesla’s electric cars offer
several perceived benefits, such as environmental sustainability, fuel savings, and high performance. The
company has invested heavily in building a network of charging stations to address concerns about the
availability and accessibility of charging infrastructure.

However, the initial cost of Tesla’s electric cars is higher than traditional gas-powered cars, which can be
a barrier to adoption for some consumers. Additionally, the cost of owning and maintaining an electric
car (such as the cost of replacing the battery) can also be a concern for some consumers.

To overcome these barriers, Tesla has focused on creating a strong brand identity and a loyal customer
base through marketing and word-of-mouth. The company has also introduced leasing options and
financing programs to make the initial cost more affordable for some consumers.

Overall, Tesla’s success in adoption among the general public demonstrates the importance of perceived
value, cost, and support in the adoption process. By offering a product with perceived benefits,
addressing concerns about infrastructure and cost, and building a strong brand and customer base,
Tesla has successfully adopted electric cars among a significant portion of the general public.

Overall, successful adoption depends on the perceived utility, price, and cost of the new product,
service, or technology, as well as the support and resources available to facilitate the adoption process.

Organizational hurdles can pose significant challenges to implementing a new strategic direction. Some
of the key organizational hurdles that may arise when trying to shift from a red ocean to a blue ocean
strategy include cognitive, limited resources, motivation, and politics.

Cognitive hurdles refer to the mental barriers that employees may have when presented with new ideas
or ways of working. These barriers can include a resistance to change, fear of the unknown, and a
tendency to cling to familiar routines and processes. To overcome cognitive hurdles, leaders need to
communicate the need for change clearly and effectively, while also addressing employees’ concerns
and fears.

Limited resources can also pose a challenge when trying to implement a new strategy. Shifting to a blue
ocean strategy may require significant investments in research, development, and marketing, which may
strain existing resources. To overcome this hurdle, leaders may need to explore new funding sources or
re-allocate resources from less critical areas.

Motivation can also be a key hurdle when trying to implement a new strategy. Employees may be
resistant to change or lack the motivation to take on new challenges. To overcome this hurdle, leaders
need to create a culture of innovation and agility, where employees feel encouraged to explore new
ideas and ways of doing things.

Politics can also be a significant hurdle in organizations, as competing interests and power dynamics can
make it difficult to gain support for a new strategic direction. To overcome this hurdle, leaders may need
to build coalitions and alliances with key stakeholders, while also being transparent and inclusive in the
decision-making process.

Overall, the key to overcoming organizational hurdles is to be proactive, collaborative, and persistent. By
working together to identify and address these hurdles, organizations can successfully shift from a red
ocean to a blue ocean strategy, and position themselves for long-term success and growth.

To overcome the key organizational hurdles of implementing a new strategic direction, organizations
can use a variety of approaches, including tipping point leadership and fostering a strong organizational
culture.

Tipping point leadership involves identifying a small group of early adopters who are passionate about
the new direction and can help to create momentum for change. These individuals can act as champions
for the new strategy, helping to spread the message and engage others in the organization. By building a
critical mass of support, the organization can reach a tipping point where the new strategy becomes the
norm.
Fostering a strong organizational culture can also be a powerful way to overcome hurdles. Google and
Facebook are examples of companies with strong cultures that support innovation and change. These
companies have created a culture of experimentation and risk-taking, where employees feel
empowered to try new things and learn from failure. This type of culture can help to break down
cognitive barriers and encourage employees to embrace new strategic directions.

Finally, stiff-coloured cultures can also pose a hurdle for organizations that want to implement a new
strategic direction. To overcome this hurdle, leaders can focus on building a culture of collaboration and
inclusivity, where everyone feels heard and valued. This can involve creating opportunities for open
communication and feedback, providing training and development programs, and rewarding
collaboration and teamwork.

In summary, to overcome organizational hurdles and implement a new strategic direction, organizations
can use tipping point leadership, foster a strong organizational culture, and work to break down stiff-
coloured cultures that may be hindering progress. By using these approaches, organizations can position
themselves for long-term success and growth.

Get off your desk" is a phrase coined by the renowned leadership expert and author, John Kotter. It
refers to the importance of leaders physically leaving their offices and engaging with employees on the
front lines to understand their perspectives and concerns.

To tip the cognitive hurdle and overcome resistance to a new strategic direction, leaders need to
understand the underlying reasons for the resistance and address them directly. This requires engaging
with employees and actively listening to their feedback.

By getting off their desks and engaging with employees, leaders can demonstrate that they are
committed to the change and that they value employee input. They can also address any
misconceptions or fears that employees may have about the new strategy.

Engaging with employees can take many forms, including town hall meetings, focus groups, and one-on-
one conversations. The goal is to create a safe space for employees to share their concerns and ideas
openly, without fear of retribution or judgment.
In addition to engaging with employees, leaders also need to communicate the new strategic direction
clearly and effectively. This requires developing a clear and compelling vision, outlining the benefits of
the new strategy, and providing a roadmap for how the organization will get there.

By engaging with employees and communicating the new strategy effectively, leaders can tip the
cognitive hurdle and create buy-in for the new direction. This can help to ensure that the organization is
aligned and moving in the same direction, which is critical for successfully implementing a new strategy.

Dealing with disgruntled customers can be challenging, but it is an important part of customer service.
Here are some tips to help you meet the cognitive hurdle and successfully navigate the situation:

Listen actively: When a customer is upset, the first step is to listen carefully to their concerns. Make sure
to give them your full attention and show that you understand their perspective.

Acknowledge their feelings: Let the customer know that you understand their frustration and that you
empathize with their situation. This can help to defuse the situation and show that you are taking their
concerns seriously.

Apologize: Even if you are not at fault, it is important to apologize for the inconvenience or frustration
that the customer has experienced. This can help to rebuild trust and demonstrate that you are
committed to finding a solution.

Offer a solution: Once you have listened to the customer’s concerns and acknowledged their feelings,
work with them to find a solution that addresses their needs. Be proactive in offering suggestions and be
open to their feedback.

Follow up: After the interaction, make sure to follow up with the customer to ensure that the solution
was effective and that they are satisfied with the outcome. This can help to build a positive relationship
and show that you value their business.

Remember, dealing with disgruntled customers can be challenging, but with the right approach, you can
turn a negative situation into a positive one