Description
Blue Ocean Strategy suggests that an organization should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-to-head with other suppliers in an existing industry
Blue Ocean Strategy
www.study Marketing.org
1
Contents
1. Blue Ocean Vs. Red Ocean Strategy 2. Blue Ocean Strategy Tools 3. Strategy Canvas and Four Action Framework 4. Six Principles of Blue Ocean Strategy 5. Formulating Blue Ocean Strategy 6. Executing Blue Ocean Strategy
If you find this presentation useful, please consider telling others about our site (www.studyMarketing.org)
www.study Marketing.org
2
Blue Ocean Vs. Red Ocean Strategy
www.study Marketing.org
3
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
•
• •
Create uncontested
market space Make the competition
•
• •
Compete in existing
market space Beat the competition Exploit existing demand
irrelevant
Create and capture new demand
www.study Marketing.org
4
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
• •
Break the value- cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation and low cost
• •
Make the value-cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost
www.study Marketing.org
5
Blue Ocean Strategy Tools
• A diagnostic tool for building a compelling blue ocean strategy • • It captures the current state of play in the known market space Allow you to understand :
•
•
Strategy Canvas
where the competition is currently
investing the factors the industry currently competes on in product, service and delivery
•
what customers receive from existing competitive offerings on the market
www.study Marketing.org
6
Four Action Framework
Eliminate
Raise
Reduce
Create
www.study Marketing.org
7
Four Action Framework
Eliminate
Which of the factors that the industry takes for granted should be eliminated? Which factors should be reduced well below the industry’s standard?
Reduce
Raise
Which factors should be raised well above the industry’s standard?
Which factors should be created that the industry has never offered?
8
Create
www.study Marketing.org
Four Action Framework The Case of Cirque du Soleil (A Circus Company) Eliminate
• • • • Star performers Animal shows Aisle concession sales Multiple show arenas • •
Reduce
Fun and humor Thrill and danger
Create
• • • • Theme Refined environment Multiple productions Artistic music and dance •
Raise
Unique venue
www.study Marketing.org
9
Six Principles of Blue Ocean Strategy
Formulation Principles 1. Reconstruct market boundaries Execution Principles 5. Overcome key organizational hurdles 6. Build execution into
2. Focus on the big picture,
not the numbers 3. Reach beyond existing
strategy
demand
4. Get the strategic sequence right
www.study Marketing.org
10
Formulating Blue Ocean Strategy
www.study Marketing.org
11
1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
•
•
Focus on rivals within
industry Focuses on competitive
•
• •
Looks across alternative
industries Looks across strategic
position within strategic
group • Focuses on better serving the buyer group
group within industry
Redefines the industry buyer group
www.study Marketing.org
12
1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
•
Focuses on maximizing the value of product or service offerings within the bounds of its industry
•
Looks across to
complementary product and service offerings
•
Participates in shaping
external trends over time
•
Focuses on adapting to
external trends as they
occur
www.study Marketing.org
13
2. Focus on the Big Picture, not the Numbers
Focus on the The Four Steps of Visualizing Strategy
Big Picture, not
the Numbers
• •
Visual Awakening Visual Exploration
•
•
www.study Marketing.org
Visual Strategy Fair
Visual Communication
14
2. Focus on the Big Picture, not the Numbers
•
Visual Awakening
Compare your business with your competitors’ by drawing your “as is” strategy canvas See where your strategy needs to change
•
www.study Marketing.org
15
2. Focus on the Big Picture, not the Numbers
•
Visual Exploration
Go to the field to explore the six paths to creating blue oceans Observe the distinctive advantages of alternative products and services See which factors you should eliminate, create, or change
• •
www.study Marketing.org
16
2. Focus on the Big Picture, not the Numbers
•
Visual Strategy Fair
Draw your “to be” strategy canvas based on insights from field observations Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers Use feedback to build the best “to be” future strategy
•
•
www.study Marketing.org
17
2. Focus on the Big Picture, not the Numbers
•
Visual Communication
Distribute your before-and-after strategic profiles on one page for easy comparison Support only those projects and operational moves that allow your company to close the gap to actualize the new strategy
•
www.study Marketing.org
18
3. Reach Beyond Existing Demand
• First tier: “Soon to be” noncustomers who are the edge of your market, waiting to jump ship • Second tier: “Refusing” noncustomers who consciously choose against your market • Third tier: “Unexplored” noncustomers who are in markets distant from yours
The Three Tier of Non-
customers
www.study Marketing.org
19
4. Get The Strategic Sequence Right
The Sequence of Blue Ocean Strategy
Buyer utility Is there exceptional buyer utility in your business idea? Price Is your price easily accessible to the mass of buyers? Cost Can you attain your cost target to profit at your strategic price?
Adoption What are the adoption hurdles in actualizing your business idea?
www.study Marketing.org
A commercially viable blue ocean idea
20
Executing Blue Ocean Strategy
www.study Marketing.org
21
5. Overcome Key Organizational Hurdles
Cognitive Hurdle Overcome Key Organizational Hurdles Motivational Hurdle
Resource Hurdle
Political Hurdle
www.study Marketing.org
22
5. Overcome Key Organizational Hurdles
Cognitive Hurdle (status quo) • • Ride the “Electric Sewer” Meet with Disgruntled Customers
• Resource Hurdle • •
www.study Marketing.org
Redistribute resources to your hot spots Redirect resources from your cold spots Engage in horse trading
23
5. Overcome Key Organizational Hurdles
• Zoom in on Kingpins (key influencers) Place kingpins on a fishbowl Atomize to get the organization to change itself
Motivational Hurdle
• •
• Political Hurdle •
Secure a consigliere on your top management team Leverage your angels and silence your devils
www.study Marketing.org
24
5. Build Execution Into Strategy
Fair Process of Strategy Strategy Formulation Process Fair Process – Engagement, Explanation, Expectation clarity Attitudes Trust and Commitment – “I feel my opinion counts”
Behavior Voluntary Cooperation – “I’ll go beyond the call of duty” Strategy Execution Exceeds Expectation – self initiated
www.study Marketing.org
25
Source of Reference
• W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy, HBS Publication
www.study Marketing.org
26
End of Material
www.study Marketing.org
27
doc_252171669.ppt
Blue Ocean Strategy suggests that an organization should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-to-head with other suppliers in an existing industry
Blue Ocean Strategy
www.study Marketing.org
1
Contents
1. Blue Ocean Vs. Red Ocean Strategy 2. Blue Ocean Strategy Tools 3. Strategy Canvas and Four Action Framework 4. Six Principles of Blue Ocean Strategy 5. Formulating Blue Ocean Strategy 6. Executing Blue Ocean Strategy
If you find this presentation useful, please consider telling others about our site (www.studyMarketing.org)
www.study Marketing.org
2
Blue Ocean Vs. Red Ocean Strategy
www.study Marketing.org
3
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
•
• •
Create uncontested
market space Make the competition
•
• •
Compete in existing
market space Beat the competition Exploit existing demand
irrelevant
Create and capture new demand
www.study Marketing.org
4
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
• •
Break the value- cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation and low cost
• •
Make the value-cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost
www.study Marketing.org
5
Blue Ocean Strategy Tools
• A diagnostic tool for building a compelling blue ocean strategy • • It captures the current state of play in the known market space Allow you to understand :
•
•
Strategy Canvas
where the competition is currently
investing the factors the industry currently competes on in product, service and delivery
•
what customers receive from existing competitive offerings on the market
www.study Marketing.org
6
Four Action Framework
Eliminate
Raise
Reduce
Create
www.study Marketing.org
7
Four Action Framework
Eliminate
Which of the factors that the industry takes for granted should be eliminated? Which factors should be reduced well below the industry’s standard?
Reduce
Raise
Which factors should be raised well above the industry’s standard?
Which factors should be created that the industry has never offered?
8
Create
www.study Marketing.org
Four Action Framework The Case of Cirque du Soleil (A Circus Company) Eliminate
• • • • Star performers Animal shows Aisle concession sales Multiple show arenas • •
Reduce
Fun and humor Thrill and danger
Create
• • • • Theme Refined environment Multiple productions Artistic music and dance •
Raise
Unique venue
www.study Marketing.org
9
Six Principles of Blue Ocean Strategy
Formulation Principles 1. Reconstruct market boundaries Execution Principles 5. Overcome key organizational hurdles 6. Build execution into
2. Focus on the big picture,
not the numbers 3. Reach beyond existing
strategy
demand
4. Get the strategic sequence right
www.study Marketing.org
10
Formulating Blue Ocean Strategy
www.study Marketing.org
11
1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
•
•
Focus on rivals within
industry Focuses on competitive
•
• •
Looks across alternative
industries Looks across strategic
position within strategic
group • Focuses on better serving the buyer group
group within industry
Redefines the industry buyer group
www.study Marketing.org
12
1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
•
Focuses on maximizing the value of product or service offerings within the bounds of its industry
•
Looks across to
complementary product and service offerings
•
Participates in shaping
external trends over time
•
Focuses on adapting to
external trends as they
occur
www.study Marketing.org
13
2. Focus on the Big Picture, not the Numbers
Focus on the The Four Steps of Visualizing Strategy
Big Picture, not
the Numbers
• •
Visual Awakening Visual Exploration
•
•
www.study Marketing.org
Visual Strategy Fair
Visual Communication
14
2. Focus on the Big Picture, not the Numbers
•
Visual Awakening
Compare your business with your competitors’ by drawing your “as is” strategy canvas See where your strategy needs to change
•
www.study Marketing.org
15
2. Focus on the Big Picture, not the Numbers
•
Visual Exploration
Go to the field to explore the six paths to creating blue oceans Observe the distinctive advantages of alternative products and services See which factors you should eliminate, create, or change
• •
www.study Marketing.org
16
2. Focus on the Big Picture, not the Numbers
•
Visual Strategy Fair
Draw your “to be” strategy canvas based on insights from field observations Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers Use feedback to build the best “to be” future strategy
•
•
www.study Marketing.org
17
2. Focus on the Big Picture, not the Numbers
•
Visual Communication
Distribute your before-and-after strategic profiles on one page for easy comparison Support only those projects and operational moves that allow your company to close the gap to actualize the new strategy
•
www.study Marketing.org
18
3. Reach Beyond Existing Demand
• First tier: “Soon to be” noncustomers who are the edge of your market, waiting to jump ship • Second tier: “Refusing” noncustomers who consciously choose against your market • Third tier: “Unexplored” noncustomers who are in markets distant from yours
The Three Tier of Non-
customers
www.study Marketing.org
19
4. Get The Strategic Sequence Right
The Sequence of Blue Ocean Strategy
Buyer utility Is there exceptional buyer utility in your business idea? Price Is your price easily accessible to the mass of buyers? Cost Can you attain your cost target to profit at your strategic price?
Adoption What are the adoption hurdles in actualizing your business idea?
www.study Marketing.org
A commercially viable blue ocean idea
20
Executing Blue Ocean Strategy
www.study Marketing.org
21
5. Overcome Key Organizational Hurdles
Cognitive Hurdle Overcome Key Organizational Hurdles Motivational Hurdle
Resource Hurdle
Political Hurdle
www.study Marketing.org
22
5. Overcome Key Organizational Hurdles
Cognitive Hurdle (status quo) • • Ride the “Electric Sewer” Meet with Disgruntled Customers
• Resource Hurdle • •
www.study Marketing.org
Redistribute resources to your hot spots Redirect resources from your cold spots Engage in horse trading
23
5. Overcome Key Organizational Hurdles
• Zoom in on Kingpins (key influencers) Place kingpins on a fishbowl Atomize to get the organization to change itself
Motivational Hurdle
• •
• Political Hurdle •
Secure a consigliere on your top management team Leverage your angels and silence your devils
www.study Marketing.org
24
5. Build Execution Into Strategy
Fair Process of Strategy Strategy Formulation Process Fair Process – Engagement, Explanation, Expectation clarity Attitudes Trust and Commitment – “I feel my opinion counts”
Behavior Voluntary Cooperation – “I’ll go beyond the call of duty” Strategy Execution Exceeds Expectation – self initiated
www.study Marketing.org
25
Source of Reference
• W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy, HBS Publication
www.study Marketing.org
26
End of Material
www.study Marketing.org
27
doc_252171669.ppt