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Blue Ocean Strategy

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Blue Ocean Strategy Mayra Garcia Cory Logan Gary Taylor Nick Watkins Lindsey Pacatte Garrett Matthews David Hayward Continuous Creation of Blue Oceans Although the ... – PowerPoint PPT presentation

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Title: Blue Ocean Strategy


1
Blue Ocean Strategy
  • Mayra Garcia
  • Cory Logan
  • Gary Taylor
  • Nick Watkins
  • Lindsey Pacatte
  • Garrett Matthews
  • David Hayward

2
Red Oceans vs. Blue Oceans
  • What are Red Oceans?
  • Industries that are already in existence
  • Limited demand
  • Firms compete to capture more market share
  • Limited room for growth
  • Limited outlook for profit growth
  • Most strategy is developed to compete in Red
    Oceans

3
Red Oceans vs. Blue Oceans
  • What are Blue Oceans?
  • Are untapped market space
  • Unlimited potential for growth in demand
  • Room for highly profitable growth
  • Largely uncharted
  • Very little research into creating these markets

4
New Market Space
  • Where are Blue Oceans found?
  • Some are created well beyond existing industries
  • Some are created within established red oceans by
    expanding industry boundaries
  • Increasingly important for existing firms to
    create Blue Oceans

5
Continuous Creation of Blue Oceans
  • Although the term Blue oceans is new

6
Continuous Creation of Blue Oceans
  • Industries never stand still.
  • Operations Improve, and markets expand.
  • History states we have underestimated to create
    new industries
  • Re-create existing ones.

7
Continuous Creation of Blue Oceans
  • Flying to a new beat
  • Cheeky ads, funky staff attitude
  • Easy online booking has kept planes full
  • 15 profit margin on 36 million in revenues

8
Continuous Creation of Blue Oceans
  • Air Asia is an idea whose time has come.
  • "I think the tyranny of traditional airlines is
    about to end. Tony Fernandez

9
Continuous Creation of Blue Oceans
  • Positioning an organization to have a competitive
    advantage
  • Military references
  • Chief officers in the headquarters
  • industry shows us the market has never been
    constant

10
Continuous Creation of Blue Oceans
  • To focus on Red Oceans is accepting the key
    constraining factors of war
  • The need to beat the enemy
  • To deny the strength of the business world

11
Impact of Creating blue oceans
  • The authors attempted to quantify the impact of
    creating blue oceans on a companies growth in
    pertaining to profits and revenues
  • Study was done on business launches of 108
    various companies

12
The Profit and Growth Consequences of Creating
Blue Oceans
86
62
13
The Rising Imperative of Creating Blue Oceans
  • 1.Accelerated Technology supply exceeds demand

14
Advances in Technology
  • Transportation
  • assembly lines
  • Communication
  • Wireless
  • Finance
  • 80 of transactions done by computer
  • ATMs
  • Agriculture
  • Tractors and transponders
  • Business
  • Word processing
  • Laptops

15
The Rising Imperative of Creating Blue Oceans
  • 1.Accelerated Technology supply exceeds demand
  • 2.Globalization niche markets disappear

16
Aldi Looks to U.S for Growth
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  • quality merchandise
  • the lowest possible prices
  • guaranteed satisfaction
  • Pledge highest quality for the lowest price.
  • satisfaction are always DOUBLE guaranteed

17
The Rising Imperative of Creating Blue Oceans
  • 1.Accelerated Technology supply exceeds demand
  • 2.Globalization niche markets disappear
  • 3.Accelerated Commoditization of products and
    services brands become more similar

18
Is one product truly different than the other?
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19
The Rising Imperative of Creating Blue Oceans
  • Accelerated Technology supply exceeds demand
  • Globalization makes markets dissappear
  • Accelerated Commoditization of products and
    services brands become more similar
  • Increase in price wars selections based on price
  • Shrinking profit margins

20
From Company and Industry to Strategic Move
  • Is there a systematic approach to achieve and
  • sustain high performance?
  • Past Company Performance
  • Growing Industries

21
In Search of Excellence
  • Focused on 8 themes that led to Successful
    Companies
  • Wang Labs-
  • During the 1950s and 1960s was strong rival of a
    growing IBM

22
Built to Last
  • Focused on the habits of successful visionary
    companies
  • The companies that fit the criteria were in
    growing industries

23
Moving to Blue Oceans
  • A Strategic Move-
  • A set of managerial actions and decisions
    involved in making a major market-creating
    business offering.
  • These strategic moves create and capture new
    market space

24
VALUE INNOVATION
  • The Cornerstone of Blue Ocean Strategy
  • Blue Ocean
  • Create uncontested market space
  • Make the competition irrelevant
  • Create and capture new demand
  • Break the value-cost trade-off
  • Red Ocean
  • Compete in existing market space
  • Beat the competition
  • Exploit existing demand
  • Make the value-cost trade-off

25
VALUE INNOVATION
  • Value without innovation
  • Value creation
  • Innovation without value
  • Technology driven, market pioneering
  • Defies one of the most commonly accepted dogmas
    of competition based strategy
  • Value-cost trade-off

26
VALUE INNOVATION
  • The Simultaneous Pursuit of Differentiation and
    Low Cost

27
VALUE INNOVATION
  • Cirque du Soleil
  • Is it circus, opera, theater, ballet, or a
    Broadway show?

28
Formulating and Executing
  • Maximize Opportunity, Minimize Risk
  • Unbalanced success in Red Ocean because of tools
    and frameworks already in motion
  • Companies do not act seriously on creating blue
    oceans

29
Preview
  • Ch. 2 analytical tools and framework
  • Ch. 3 search risk, conventional boundaries
  • Ch. 4 planning risk, four-step planning
  • Ch. 5 maximize size, minimize scale risk

30
Preview Contd
  • Ch. 6 business model risk, design, sequence
  • Ch. 7 tipping point leadership, organizational
    risk
  • Ch. 8 fair process, management risk
  • Ch. 9 sustainability and renewal issues

31
Six Principles of BOS
  • Formulation Principles
  • Reconstruct market boundaries
  • Focus on the big picture, not numbers
  • Reach beyond existing demand
  • Get the strategy sequence right
  • Execution Principles
  • Overcome key organizational hurdles
  • Build execution into strategy
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