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Solid brief introduction of what is Blue Ocean Strategy. This slides shares definition of Blue Ocean Strategy and what makes it diferent from Red Ocean Strategy. This slides is a property of UCSI Blue Ocean Strategy Regional Centre.
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UCSI Blue Ocean Strategy Regional Centre is the Official Regional Licensee to conduct commercial Blue Ocean Strategy activitiesMALAYSIA | AUSTRALIA | CANADA | CHINA | INDIA | INDONESIA | PHILIPPINES | SINGAPORE | TAIWAN | THAILAND
March, 2014
Intro to Blue Ocean Strategy
Brief information about BOS
Page 2© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
What is a Blue Ocean?
Industries not in existence today
Untapped market demand
Unknown market space
Blue Ocean generally refers to the new, uncontested market space that creates new consumer value
Page 3© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
What is Strategy?
Value Proposition
Profit Proposition
People Proposition
Blue Ocean Strategy defines “Strategy” as the development and alignment of the three propositions to reconstruct the industrial and economic environment in which an organization operates:
1. A Value Proposition that attracts buyers;
2. A Profit Proposition that enables the company to make money out of the value proposition;
3. A People Proposition that motivates those working for the company to execute the strategy.
Page 4© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
What is Blue Ocean Strategy?
BOS is the result of a decade-long study of:
150 strategic moves
more than 30 industries
over 100 years (1800 2000)‐
The aim of BOS is to create new market space or a blue ocean, thereby making the competition irrelevant.
BOS offers systematic and reproducible methodologies and processes in pursuit of blue oceans.
BOS covers both strategy formulation and strategy execution.
[Renee Mauborgne & W. Chan Kim]
Page 5© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
Red Ocean VS Blue Ocean Strategy
vsRed OceanCompete in existing market
space
Constantly outperform our rivalry
Confined by Rule –Differentiation OR Low Cost
Exploit existing demand
Blue OceanCreate own uncontested market
space
Make competition irrelevant
Differentiation AND Low Cost (Value Innovation)
Create and capture new demand
Page 6© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
The Profit and Growth consequences of creating Blue Oceans
Me-Too & Value Improvement Blue Ocean Creation
Study of business launches - 108 cases
86%
14%
Business Launch
Revenue Impact
ProfitImpact
62%
38%
39%
61%
Page 7© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
Value Innovation is a cornerstone of BOSIt is about driving costs down while simultaneously driving value up for buyers and the company
Costs
Buyer Value
Value Innovation
Cost savings thanks to the elimination or reduction of non essential value attributes
Costs advantages due to economies of scale generated by high volumes and obtained
thanks to a price which appeals to the largest market catchment
Superior value obtained thanks to the raise and/or creation of value attributes that really
matter to the mass of buyers
The obtainable benefits
Page 8© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
Six principles of Blue Ocean Strategy
Search Risk
Planning Risk
Scale Risk
BusinessModel Risk
Strategy Formulation
Reconstruct market boundaries
Focus on the big picture, not the numbers
Reach beyond existing demand
Get the strategic sequence right
Strategy Execution
Organizational
Risk
Overcome key organizational hurdles
Build execution into strategy
ManagementRisk
Page 9© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
Blue Ocean Strategy
“Don’t Compete with Rivals –
Make Them Irrelevant “
W. Chan Kim and Renée Mauborgne
Page 10© UCSI Blue Ocean Strategy Regional Centre @ UCSI Consulting. All Rights Reserved.
Thank You!
UCSI Blue Ocean Strategy Regional Centre is the Official Regional Licensee to conduct commercial Blue Ocean Strategy activities in:
Malaysia | Australia | Canada | China | India | Indonesia | Philippines | Singapore |Taiwan | Thailand
@ucsibosrc#bethebos www.ucsiblueoceanstrategy.com
UCSI CONSULTING (774433-W)
UCSI University, KL Campus,North Wing, Jalan Choo Lip Kung,
Taman Taynton View, Cheras, 56000Kuala Lumpur, Malaysia.