blueoceanstrategy benny hersanto
Post on 15-Jul-2015
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Cirque’s productions have been Cirque’s productions have been
seen by almost seen by almost 40 mn40 mn people people
in in 90 cities90 cities around the world around the world
In less than 20 years Cirque du soleil has achieved a level of revenues that took Ringling Bros. and Barnum & Bailey - the global champion of the circus
industry- more than 100 years to attain
Declining industry & limited potential for
growth
Strong supplier power
on the part of star
performers and buyer power
Steadily decreasing audiences
Increasing sentiments against the use
of animals
It created It created uncontested new uncontested new market space that market space that made the competition made the competition irrelevantirrelevant
Cirque du soleil Cirque du soleil DID NOTDID NOT compete compete with Ringling Bros. and Barnum & with Ringling Bros. and Barnum &
BaileyBailey
MARKET SPACEMARKET SPACE
Industries in existence Industries in existence todaytoday
Known market spaceKnown market space Industry boundaries Industry boundaries
are defined and are defined and acceptedaccepted
Competitive rules of Competitive rules of the games are knownthe games are known
Reduced profit and Reduced profit and growthgrowth
Industries Industries NOTNOT in in existence todayexistence today
UNKNOWNUNKNOWN and and untapped market untapped market spacespace
Rules of the game are Rules of the game are WAITINGWAITING to be set to be set
Opportunity for highly Opportunity for highly profitable growthprofitable growth
RED OCEAN BLUE OCEAN
PROfiT & GROwTh PROfiT & GROwTh CONSEqUENCES Of CREATiNG CONSEqUENCES Of CREATiNG BLUE OCEANSBLUE OCEANS
39% 61%
38%62%
14%86%
PROFIT IMPACT
REVENUE IMPACT
BUSINESS LAUNCH
Launches within red ocean launches for creating blue oceans
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement•Accelerated technological advancement
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Accelerated technological advancement• Trend towards globalization
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Company• Industry • Strategic move Set of managerial actions
and decisions involved in making a major market-creating business offering
STRATEGYSTRATEGY
Compete in existing Compete in existing market spacemarket space
Beat the competitionBeat the competition Exploit existing demandExploit existing demand Make the value-cost Make the value-cost
trade-offtrade-off Align the system with Align the system with
differentiation differentiation OROR low low costcost
Create uncontested Create uncontested market spacemarket space
Make the competition Make the competition irrelevantirrelevant
Create and capture new Create and capture new demanddemand
Break the value-cost Break the value-cost trade-offtrade-off
Align the system in Align the system in pursuit of differentiation pursuit of differentiation ANDAND low cost low cost
Blue oceanRed ocean
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Formulation principles
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Reconstruct market boundaries search
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Reconstruct market boundaries search • Focus on the big picture, not numbers planning
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Reconstruct market boundaries search • Focus on the big picture, not numbers planning• Reach beyond existing demand scale
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Reconstruct market boundaries search • Focus on the big picture, not number planning• Reach beyond existing demand scale• Get strategic sequence right business model
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Execution principles
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Overcome key organizational hurdles organizational
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Overcome key organizational hurdles organizational
• Build execution into strategy management
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Analytical tools and frameworks
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Strategy canvas Captures current state of play
Value curve of competitors
Company’s strategic profile
STRATEGY CANVAS Of ThE U.S. STRATEGY CANVAS Of ThE U.S. wiNE iNdUSTRY iN ThE LATE 1990SwiNE iNdUSTRY iN ThE LATE 1990S
priceUse of enological terminology and distinction in wine communication
Above-the-line marketing
Aging quality
Vineyard prestige and legacy
Wine range
Wine complexity
High
Low
Premium wines
Budget wines
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Strategy canvas• The four actions framework
ThE fOUR ACTiONS ThE fOUR ACTiONS fRAMEwORKfRAMEwORK
Eliminate Factors to eliminate
that industry has taken
For granted
Raise Factors to raise
well Above industry standard
Reduce Factors to reduce
well below industry standards
Create Factors to create that Industry has
never offered
A new value curve
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Strategy canvas• The four actions framework The eliminate-Reduce-Raise-Create Grid
ThE ELiMiNATE-REdUCE-RAiSE-ThE ELiMiNATE-REdUCE-RAiSE-CREATE GRidCREATE GRid
EliminateEnological terminology and distinctions
Aging qualities
Above-the-line-marketing
RaisePrice versus budget wines
Retail store involvement
ReduceWine complexity
Wine range
Vineyard prestige
Create Easy drinking
Ease of selection
Fun and adventure
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Three characteristics of a good strategy
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Focus• Divergent • Tagline
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Reading value curves
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• A blue ocean strategy• Company caught in the red ocean
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• A blue ocean strategy• Company caught in the red ocean• Overdelivery without payback
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• A blue ocean strategy• Company caught in the red ocean• Overdelivery without payback• An incoherent strategy
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• A blue ocean strategy• Company caught in the red ocean• Overdelivery without payback• An incoherent strategy• Strategic contradiction
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• A blue ocean strategy• Company caught in the red ocean• Overdelivery without payback• An incoherent strategy• Strategic contradiction• An internally driven company
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1. Reconstruct market boundaries
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries• Look across strategic groups within industries
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries• Look across strategic groups within industries• Look across chain of buyers
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries• Look across strategic groups within industries• Look across chain of buyers• Look across complementary product and service offerings
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries• Look across strategic groups within industries• Look across chain of buyers• Look across complementary product and service offerings• Look across functional or emotional appeal
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Look across alternative industries• Look across strategic groups within industries• Look across chain of buyers• Look across complementary product and service offerings• Look across functional or emotional appeal• Look across time
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1. Focus on the big picture, not the
numbers
STEPS Of ViSUALiziNG STEPS Of ViSUALiziNG STRATEGYSTRATEGY
1. Visual awakening
2. Visual exploration
3. Visual strategy fair
4. Visual communication
compare with “as is” business areas needed for change
field exploration advantages of alternate products and all eliminate, create, or change
draw “to be” canvas get feedback on alternative strategy canvas use feedback to get “to be”
compare before and after strategies Support moves that close the gaps to actualize new strategy
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• visualizing strategy at the corporate level
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• using strategy canvas• using pioneer - migrator – settler (PMS) map
GROwTh POTENTiAL Of GROwTh POTENTiAL Of PORTfOLiOS Of PORTfOLiOS Of BUSiNESSESBUSiNESSES
pioneers
migrators
settlers
today tomorrow
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1.Reach beyond existing demand
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• first tier non-customer
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• first tier non-customer• second tier non-customer
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• first tier non-customer• second tier non-customer• third tier non-customer
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1.Get the strategic sequence right
SEqUENCE Of BLUE OCEAN SEqUENCE Of BLUE OCEAN STRATEGYSTRATEGY
Buyer utility
price
cost
adoption
Commercially Viable BOI
YES
YES
YES
YES
NO - RETHINK
NO - RETHINK
NO - RETHINK
NO - RETHINK
BLUE OCEAN idEA BLUE OCEAN idEA (BOi) iNdEx(BOi) iNdEx
- - +
- - +
- - +
- +/- +
Philips CD-iMotorola
iridiumDoCoMo
i-Mode Japan
Utility
Price
Cost
Adoption
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1.Overcome key organizational
hurdles
fOUR ORGANizATiONAL fOUR ORGANizATiONAL hURdLEShURdLES
COGNITIVEHURDLE
RESOURCEHURDLE
MOTIVATIONALHURDLE
POLITICALHURDLE
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Cognitive hurdles Ride the “electric sewer”
Meet the disgruntled customer
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Resource hurdles Redistribute resources to your hot spots
Redirect resources from your cold spots
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Motivational hurdles Zoom in on kingpins
Place kingpins in a fishbowl
Atomize to get the organization to change itself
BLUEBLUE OCEANOCEAN STRATEGYSTRATEGY
• Accelerated technological advancement• Political hurdles Select a consigliere on your top management team
Leverage your angels and silence your devils
BLUE OCEAN BLUE OCEAN STRATEGYSTRATEGY
• Accelerated technological advancement1.Build execution into strategy
ThE ThREE E ThE ThREE E PRiNCiPLES Of fAiR PRiNCiPLES Of fAiR PROCESSPROCESS
ENGAGEMENT
EXPLANATION EXPECTATIONCLARITY
hOw fAiR PROCESS AffECTS hOw fAiR PROCESS AffECTS PEOPLE’S ATTiTUdE ANd PEOPLE’S ATTiTUdE ANd BEhAViORBEhAViOR
FAIR PROCESS
TRUST &
COMMITMENT
VOLUNTARY COOPERATION
EXCEEDS EXPECTATIONS
STRATEGY FORMULATION PROCESS
ATTITUDES
BEHAVIOR
STRATEGY EXECUTION
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