blue ocean strategy 131006

7/31/2019 Blue Ocean Strategy 131006

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A New Approach to

Strategy and Innovation

with its Logic & Key Principles

A Process

Methodology A Comprehensive Setof Tools & Frameworks


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Value

Innovation

Tipping

Point

Leadership

Fair

Process


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Know market space of existing industries

Industry boundaries and competitive rules aredefined and accepted

Search for competitive advantage in head-to-headcompetition

Fight for market share from existing demand

Products becoming commodities

Low growth and over-crowded industries Shrinking profit pool

Many companies are stuck here, as theprimary focus of strategy work has been on

competition-based, red ocean strategies


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Found new space to work in

Challenged traditional, accepted views of theirindustries

Focused on understanding non-customers:

Identified commonalities across customersand non customers

Looked for new, or expand existing demand

Buyers perceived big increases in value Companies achieved dramatic reductions in costs

Substantially higher growth and expanding profitpool


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Compete in existing marketCompete in existing market

spacespaceCreate uncontested marketCreate uncontested market

spacespace

Beat the competitionBeat the competition Make the competition irrelevantMake the competition irrelevant

Exploit existing demandExploit existing demand Create and capture new demandCreate and capture new demand

Make the value/cost trade-offMake the value/cost trade-off Break the value/cost trade-offBreak the value/cost trade-off

Align the whole system of aAlign the whole system of a

companys activities with itscompanys activities with its

strategic choice of differentiationstrategic choice of differentiation

or low costor low cost

Align the whole system of aAlign the whole system of a

companys activities in pursuit ofcompanys activities in pursuit of

differentiation and low costdifferentiation and low cost


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Costs

ValueInnovation

Buyer value


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60%

30%

10%


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FOCUS:If everything is high, there is no focus

DIVERGENCE:

Different from competition

COMPELLING TAG LINE:


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The FourOrganizational Hurdles

To Strategy Execution

Blue Ocean Strategy does not appear to make logical sense

Need to unlearn and discard entrenched ideas and viewpoints

Different people, skills, tools, and processes

High expectations for success


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Engagement ExplanationExpectation Clarity

I feel my opinion counts

Ill go beyond the call of duty

Self-initiated


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Reconstruct market boundariesReconstruct market boundaries Sear riskSear risk

Focus on the big picture, not theFocus on the big picture, not the

numbersnumbersPlanning riskPlanning risk

Reach beyond existing demandReach beyond existing demand Scale riskScale risk

Get the strategic sequence rightGet the strategic sequence right Business model riskBusiness model risk

Overcome key organisational hurdlesOvercome key organisational hurdles Organisational riskOrganisational riskBuild execution into strategyBuild execution into strategy Management riskManagement risk


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PMSPMSFrameworkFramework

As-is StrategyAs-is StrategyCanvasCanvas

Six-PathSix-Path

ERRCERRC

BUMBUM Non-customersNon-customers

VisualVisualExplorationExploration

WorkshopWorkshop

StrategicStrategicProfilesProfiles

VisualVisualStrategyStrategyFairFair

Internal &Internal &ExternalExternal

ValidationValidation

BOIBOI

ValidationValidationworkshopworkshop

CreateUncontested

market space Make the

competitionirrelevant

Reach beyondexisting demand

Deliver superiorvalue and lowcostsimultaneously


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blue ocean strategy 131006

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