10 BLUE OCEAN

8/7/2019 10 BLUE OCEAN

http://slidepdf.com/reader/full/10-blue-ocean 1/13

BLUE OCEANBLUE OCEAN

STRATEGYSTRATEGY

Presented By:Presented By:

Naveed Zuberi Naveed Zuberi

A. Tansir AijaziA. Tansir AijaziAly ShallowwaniAly Shallowwani



What is Red Ocean and Blue OceanWhat is Red Ocean and Blue Ocean

Red OceanRed Ocean

Industries existing todayIndustries existing today ± ±

known market spaceknown market space

Industry boundaries areIndustry boundaries are

defined and accepteddefined and accepted

Competitive rules are knownCompetitive rules are known

Companies try to outperformCompanies try to outperform

their rivalstheir rivals

Market space gets crowded,Market space gets crowded,

product becomes commodities product becomes commodities

Blue OceanBlue Ocean

Industries not in existenceIndustries not in existencetodaytoday unknown market unknown market

spacespace

Demand is createdDemand is created

Opportunity for highlyOpportunity for highlyprofitable growthprofitable growth

Created well beyondCreated well beyond

existing industryexisting industryboundaries and byboundaries and byexpanding red oceanexpanding red ocean

Competition is irrelevant Competition is irrelevant



Profit and Growth consequence of creating

Blue Oceans

61%

38%

14%

39%

62%

86%

0% 20% 40% 60% 80% 100% 120%

Profit Impact

Revenue

Impact

Business

Launch

launches w ithin red oceans launces by creating blue oceans



Rising Imperative of Blue OceansRising Imperative of Blue Oceans

Accelerated technological advancements Accelerated technological advancements

Globalization and Trade barriersGlobalization and Trade barriers

Overcrowded industriesOvercrowded industries



From company and industry toFrom company and industry to

Strategic MoveStrategic Move How can a company break out of the Red oceanHow can a company break out of the Red ocean

of bloody competition? How can it create a Blueof bloody competition? How can it create a Blue

OceanOcean

Unit of AnalysisUnit of Analysis

CompanyCompany IndustryIndustry

Strategic MoveStrategic Move



alue Innovation: Corner stone of Value Innovation: Corner stone of

Blue Ocean strategyBlue Ocean strategy Value Innovation: Value Innovation:

Focus is not on beating the competition but Focus is not on beating the competition but

on making the competition irrelevant on making the competition irrelevant

Leap in value is created for the buyer and theLeap in value is created for the buyer and thecompanycompany

Emphasis is equally on value and innovationEmphasis is equally on value and innovation



Value Innovation: Corner stone of Value Innovation: Corner stone of

Blue Ocean strategyBlue Ocean strategy Value without innovation tends to focus on Value without innovation tends to focus on

value creationvalue creation on an incremental scale. It ison an incremental scale. It is

not sufficient to make you stand out in thenot sufficient to make you stand out in themarket place.market place.

Innovation without value means shootingInnovation without value means shooting

beyond what buyers are ready to accept andbeyond what buyers are ready to accept andpay for.pay for.




Blue Ocean strategyBlue Ocean strategy Value innovation occurs only when Value innovation occurs only when

companies align innovation with utility,companies align innovation with utility,

price and cost positionprice and cost position

Value innovation defies the value Value innovation defies the value--cost cost trade off. Blue Oceans pursuetrade off. Blue Oceans pursue

differentiation and low cost simultaneouslydifferentiation and low cost simultaneously



Blue Ocean: Cirque du SoleilBlue Ocean: Cirque du Soleil

Created in 1984 by group of street performersCreated in 1984 by group of street performers

Seen by 40 million people in 90 cities around theSeen by 40 million people in 90 cities around the

worldworld Ringling Bros. and Barnum & BaileyRingling Bros. and Barnum & Bailey the globalthe global

champions of circus industrychampions of circus industry

Declining Industry : High Supplier Power, HighDeclining Industry : High Supplier Power, HighBuyer PowerBuyer Power other form of entertainment other form of entertainment



Blue Ocean: Cirque du SoleilBlue Ocean: Cirque du Soleil

Ringling Bros. and BarnumRingling Bros. and Barnum& Bailey& Bailey

Benchmarking oneBenchmarking oneanotheranother

Securing more famousSecuring more famousclowns and lion tamersclowns and lion tamers high cost high cost

Animal cost Animal cost maintenance, training,maintenance, training,insurance, transportationinsurance, transportation

Cirque du SoleilCirque du Soleil

Glamorized the circus byGlamorized the circus by

combining the best of combining the best of theatre and circustheatre and circus

New market: adult New market: adult theatre customerstheatre customers

They focused on threesThey focused on threesfactors : tent, the clowns,factors : tent, the clowns,classic acrobatic acts.classic acrobatic acts.




Blue Ocean strategyBlue Ocean strategy

COSTS

Buyer Value

Value

Innovation




Blue Ocean strategyBlue Ocean strategy Buyers value : utility and priceBuyers value : utility and price

Company value : price and cost structureCompany value : price and cost structure

Value innovation is achieved only when the Value innovation is achieved only when thewhole system of the companys utility, price andwhole system of the companys utility, price andcost activities is properly aligned.cost activities is properly aligned.

Value innovation is more than innovation e.g. Value innovation is more than innovation e.g.

innovation at sub levels.innovation at sub levels. The whole system approach that makes BlueThe whole system approach that makes Blue

Ocean a sustainable strategy.Ocean a sustainable strategy.



ConclusionConclusion

Great leaders emerge fromGreat leaders emerge fromthose who think beyondthose who think beyondboundariesboundaries

LEX LUTHERLEX LUTHER

Documents

10 BLUE OCEAN