BLUE OCEAN

STRATEGY
GROUP 5:
1. VŨ THỊ PHƯƠNG THANH
2. KIỀU THỊ THU TRANG
3. NGUYỄN THỊ THU TRANG
4. MAI THỊ HOÀ

Page 1
Contents

Background Knowledge

World’s Cases

Vietnam’s Cases

Misconceptions

Conclusion

Page 2
 What is the BLUE OCEAN?
Blue oceans denote all industries NOT in
existence today

The Unknown market space

Untainted by competition
In Blue Oceans, demand is created not fought over

In Blue Oceans, growth is profitable and rapid

Page 3
 Red Ocean vs. Blue Ocean

• Compete in existing market • Create uncontested market

space space

• Beat the competition • Make the competition

irrelevant

• Exploit existing demand • Create and capture new

demand

• Make the value/cost trade-off • Break the value/cost trade-off

• Align the whole system of • Align the whole system of a

company’s activities with its company’s activities in pursuit
strategic choice of of differentiation AND low cost
differentiation OR low cost
Page 4
Two ways to create a BLUE OCEAN

Give rise to EBAY

complete new (online auction
industries industry)

Create WITHIN a Red

Ocean when a
company alters the Cirque du
boundaries of an
existing company
Soleil

Page 5
Page 6
Page 7
Automobile industry
Ford Model T
(1908)

GM
(1924)

Presenter: Vũ Thị Phương Thanh

Japanese Car
(1970s)
Chrysler’s Minivan
(1984)

Page 8
Historical Situation (1890s)

 The horse and buggy was the primary means

of US transportation
 Auto manufacturers built custom-made
automobiles
 Autos were an unreliable and luxury novelty

Page 9
FORD MODEL T

Horseless carriage
Highly affordable

FORD Reliable
Highly standardized MODEL T

Easy to be fixed Durable

“Watch the Ford Go By, High Priced Quality in a Low

Priced Car.”
Page 10
Results

Ford’s market share surged from 9 1

percent in 1908 to 61 percent in 1921

By 1923, a majority of American 2

households owned an automobile

Model T replaced the horse-drawn carriage as the

3
primary means of transport in the United States

Page 11
General Motors
“A car for every purse and
purpose” Fun

Comfortable
Fashionable

Exciting

Page 12
Results
1 2 3
From 1926 to General Motors GM became one
1950, the total increased its of three biggest
number of cars overall market automobile
sold in the share from 20% companies,
US increased to 50% together with Ford
from 2 million and Chrysler,
to 7 million a accounted for
year 90% market share

Page 13
SMALL AND FUEL-EFFICIENT
JAPANESE CARS

RUTHLESS QUALITY

BLUE
SMALL SIZE
OCEAN
NEW UTILITY OF HIGHLY
GAS-EFFICIENT

Page 14
Results

Almost overnight the Japanese became heroes

in consumers’ minds

Making BIG THREE to loss 4b dollars in 1980

US manufacturers captured only 60% market

shares

Page 15
CHRYSLER’S MINIVAN
Breaking the boundary between car and van: Smaller than the traditional
van and yet more spacious than the station wagon

Built on the Chrysler K car chassis, the minivan drove like a car but
provided more interior room and could still fit in the family garage

 Within three years, Chrysler

gained $1.5 billion from the
minivan’s introduction alone

 By 1998, total sales of new light

trucks (minivans, SUVs, and
pickups) reached 7.5 million,
nearly matching the 8.2 million
new car sales

Page 16
Case: Bloomberg
Presenter: Kiều Thị Thu Trang

Industry: Business information provider

Strategy: Reconstruct market boundaries
Approach: Look across the chain of customer

Page 17
Look across the chain of customer

- Shifting focus upstream from

purchasers (IT managers) to
users (traders and analysts)
- Designing system to offer users
better value with a easy-to-use,
broker-friendly computer system

- Adding information and

purchasing services to enhance
users’ personal lives
 the traders & analysts exert their
powers within the firm to drive IT
managers to purchase from
Page 18
Bloomberg
 Results & Lessons
RESULT

One of the largest and most profitable business

information providers in the world.
LESSONS
Look Across the Chain of Buyers…
 Challenging an industry’s conventional understanding about which buyer
group to target can lead to the discovery of new blue ocean.
 By looking across buyer groups, companies can gain new insights into how
to redesign their value curves to focus on a previously overlooked set of
buyers.
Should ask:
• What is the chain of buyers in your industry?
• Which buyer group does your industry typically focus on?
• If you shifted the buyer group of your industry, how could you unlock new
value? Page 19
Cases in Vietnam
Presenter: Mai Thị Hoà

Pho 24

Bedded coach

Soft drink with

fresh tea favor
Shampoo for
men

Page 20
Nam An Group

RAISE ELIMINATE
Food safety Chemical
standards, seasoning
customer not good for
services health
VALUE
CREATE
Attractive
REDUCE
restaurant
Salt, sugar
space
design

Page 21
How far has Pho24 been swimming?

After finding its blue ocean, the company quickly franchised the brand Pho24
and raised market share.

Pho24 plans to open more stores in all major cities of Vietnam as well as in
overseas markets, where there are extensive Asian populations.

By June 2010, Pho24 has opened 77 outlets in:

Big Cities in Vietnam: Ho Chi Minh City, Ha Noi, Da Nang, Vung Tau, Nha
Trang, Binh Duong

Asia Countries: Jakarta (Indonesia), Manila (Philippines), Seoul (Korea),

Phnom Penh (Cambodia), Sydney (Australia) and Hong Kong.

Page 22
 The real
man

Guys, have you been searching for that special type of personal
care products that are created just for you?

Ladies, do you want your man to be more confident, manlier and

everything that a real man should be?

Page 23
Values created by X-men

ELIMINATE
RAISE
Men’s habit of
Men’s using the same
confidence shampoo with
and style women

CREATE
Consumer REDUCE
behaviour, Needless
customer chemicals
awareness

Page 24
How can X-men swim in the men’s shampoo
market?
Strategy of
product
diversification

X-men X-men
sport for boss

Teen-X

Although there are many other products like X-

men Facial Foam, deodorant, perfume, it still
focuses on marketing campaigns for shampoo,
esp. the X-Mission Page 25
Key facts
Marketing budget for X-men is only 599.000
USD in 2006

X-men accounts for 7% of the shampoo market share in

Vietnam => Top 5 shampoos in Vietnam

The leading men’s personal care brand since

Dec 2003 (over 60% of market share in this
segmentation)

Page 26
BLUE OCEAN STRATEGY
MISCONCEPTIONS
Presenter: Nguyễn Thị Thu Trang

Page 27
 Misconception 1: Blue Ocean is about new products, new technologies

or diversification beyond a company’s core business.

Not about extension of Failure Case: Motorola

existing product lines,
nor about technology
innovations per se.

Exceptional value creation to capture new

demand, with or without new technology.

Page 28
 Misconception 2: Blue Ocean Strategy asks companies to evade the

competition

• Together with red oceans

form a continuum
• Equally important in
business practice

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 Misconception 3: Blue Ocean is only wishful thinking, as any blue

ocean created usually turns red rapidly

• a process rather than a market outcome

• Excellent utilities => strategic price => cost driven down => imitation
barrier

Eg: Swatch $80 -> $40 => mass market buyers

Page 30
Misconception 4: Blue Ocean Strategy is like an old wine in a new

bottle, as it is just a modified version of differentiation strategy

Not about a trade-off Case: Southwest Airlines

between differentiation
and low cost, but
breaking it.

Leverages existing
resources to achieve
breakthroughs in value.
Page 31
 CONCLUSION
Balance blue
Provide a set of actionable
Achieveblue
frameworks and tools for
Balance
Provide a set of actionable
ocean
Achieve and red
companies to face up to the
frameworks and tools for
sustainability
challenges
companies in
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face up to the
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development
challenges in of
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