Blue Ocean Strategy Overview

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Blue Ocean StrategyOverview

• Team 4
• Brent Hare
• Ty Parasiliti
• Josh Fernino
• Vincent Ukwu
• Lance Hollister
• Chris Kerschen
• Victor Hemmati

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Chapter 1

• Value Innovation
• The Cornerstone of the Blue Ocean Strategy
• Blue Oceans
• Make the competition irrelevant
• Create and captures new demand
• Red Oceans
• Compete in existing market space
• Beat the competition

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Chapter 1

• Value Innovation
• Cirque Du Soleil
• Is it circus, theater, ballet, or a Broadway
  show?
• Creates value while at the same time it is very
  innovative

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Chapter 2

• Strategy Canvas
• Captures the current conditions of competitors in
  an industry
• 4 Actions Framework
• Helps companies break away from the traditional
  value curve and create a new one
• Eliminate/Reduce/Raise/Create Grid
• Helps companies to act on the 4 questions
  presented in the framework to create the new
  value curve

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Chapter 2

• 3 Characteristics of a good strategy
• Focus A companys value curve should show that
  its efforts are not scattered across all key
  factors of competition
• Divergence Blue ocean value curves always stand
  apart from competitors
• Compelling Tagline Must deliver a clear message
  to customers that compels them to use the product
• Understanding Value Curves

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Chapter 3

• Six Paths Framework
• Path 1 Look Across Alternative Industries
• Path 2 Look Across Strategic Groups Within
  Industries
• Path 3 Look Across the Chain of Buyers
• Path 4 Look Across Complementary Product and
  Service Offerings
• Path 5 Look Across Functional or Emotional
  Appeal to Buyers
• Path 6 Look Across Time

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Chapter 3

• Path 1 Look Across Alternative Industries
• Alternatives VS. Substitutes
• Substitutes products in different forms that
  have the same functionality
• Alternatives products with different functions
  that serve the same purpose

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Chapter 3

• Path 2 Look Across Strategic Groups Within
  Industries
• Companies in a particular industry that pursue a
  similar strategy
• Based on two dimensions
• Price
• Performance
• Key to creating blue oceans is to break out of
  this narrow tunnel vision

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Chapter 3

• Path 3 Look Across the Chain of Buyers
• There is a chain of buyers who are directly or
  indirectly involved in the buying decision
• Purchasers pay for the product or service
• Users people who use the product or service
• Influencers influence a decision one way or the
  other
• These groups may overlap, but often differ

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Chapter 3

• Path 4 Look Across Complementary Product and
  Service Offerings
• The key is to define the total solution buyers
  seek when they choose a product or service.
• Way to do this is by thinking about what happens
  before, during, and after your product is used.
• e.g. Babysitting and parking, operating and
  application software, airline ground
  transportation

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Chapter 3

• Path 5 Look Across Functional or Emotional
  Appeal to Buyers
• Path 5 looks at the competition in an industry
  not just in the scope of its products and
  services but also on two possible bases of
  appeal.
• Functional Appeal
• Some industries compete based on price and
  function largely on calculations of utility,
  their appeal is rational.
• Emotional Appeal
• Other industries compete largely on feelings
  their appeal is emotional, more personal.

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Chapter 3

• Path 6 Look Across Time
• All industries are subject to external trends
  that affect their businesses over time
• Rapid rise of the internet
• Global movement toward protecting the environment
• These trends can help create blue ocean
  opportunities

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Chapter 4

• Focusing on the Big Picture
• BOS develops alternative approach of drawing
  strategic canvas
• Find new opportunities and break away from
  existing red oceans
• Focus on the big picture and not just numbers and
  operational procedures

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Chapter 4

• Strategy Canvas
• Four steps of visualizing strategy
• Visual Awakening
• Compare with competitors businesses by creating
  an as is strategy canvas
• Discuss what changes should be made
• Visual Exploration
• Decide where to implement six paths of Blue
  Oceans
• Decide what factors to keep, eliminate, or modify

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Chapter 4

• Strategy Canvas Cont.
• Visual Strategy Fair
• Get feedback on alternative strategy canvases
  from customers, competitors customers, and
  noncustomers
• Use feedback to build the best to be future
  strategy
• Visual Communication
• Compare before and after strategic profiles
• Support only those projects that allow your
  company to close the gaps to actualize the new
  strategy

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Chapter 4

• Pioneer-Migrator-Settler (PMS) Map
• Identifies strengths and weaknesses
• Pioneers Blue Ocean Businesses
• Migrators Improved value, but not innovative
  value
• Settlers Stuck in red ocean and do not
  contribute to future growth
• Ultimately helps visualize, plan, and predict a
  companys future growth and profit

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Chapter 5

• Maximizing the Blue Ocean
• To maximize the size of their Blue Ocean
  companies need to reverse course and consider
• Looking to Non-Customers
• Building powerful commonalities on what customers
  buy
• Doing this will allow companies to reach beyond
  existing demand to unlock a new mass of
  customers

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Chapter 6

• From Exceptional Utility to Strategic Pricing
• To secure a strong revenue stream for your
  offering, you have to set the right strategic
  price.
• Many companies may take the reverse course and
  test the product in different situations before
  deciding to lower their prices.
• It is crucial to know how the company will set
  its pricing strategy from the start.

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Chapter 7

• Tipping point leadership conventional wisdom
• Conventional wisdom asserts that the greater the
  change, the greater the resources and time you
  will need to bring about results.
• Transforming the extremes will transform the
  masses.
• Leveraging tipping point leadership.
• Focus on acts of disproportionate influence.
• Align employees actions with the new strategy.

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Chapter 8

• Fair process and blue ocean strategy
• Commitment, trust, and voluntary cooperation are
  not merely attitudes or behaviors they are
  intangible capital
• Trust brings heightened confidence in one
  anothers intentions and actions
• Commitment enables people to override personal
  self-interest in the interest of the company

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Chapter 8

• Fair process and blue ocean strategy
• Commitment, trust, and voluntary cooperation
  allow companies to stand apart in the speed,
  quality, and consistency of their execution and
  to implement strategic shifts fast at low cost
• The question raised by management is how to
  create trust, voluntary cooperation, and
  commitment deep within the organization