Blue Ocean Strategy

Blue Ocean vs. Red Ocean Strategy

Blue Ocean vs. Red Ocean StrategyBlue Ocean Strategy

Create uncontested market space

Make the competition irrelevant

Create and capture new demand

Red Ocean StrategyCompete in existing

market space

Beat the competition

Exploit existing demand.

Blue Ocean Strategy Tools A diagnostic tool for building a

compelling blue ocean strategy.It captures the current “state-of-play” in the

known market spaceAllows you to understand:

Where the competition is currently investing The factors the industry currently competes on in

product, service, and delivery What customers receive from existing competitive

offerings in the market

Strategy

Canvas

Four Action Framework

Eliminate

Reduce

Raise

Create

Four Action FrameworkWhich of the factors that the

industry takes for granted should be eliminated?

--------------------------------------------Which factors should be reduced

well below the industry standard?--------------------------------------------Which factors should be raised

well above the industry standard?--------------------------------------------Which factors should be created

that the industry has never offered?

Eliminate

Reduce

Raise

Create

Four Action Framework: The Case of Cirque du Soleil

Star performersAnimal ShowsAisle concession salesMultiple Show Arenas

Fun and HumourThrill and Danger

Eliminate

Reduce

Four Action Framework: The Case of Cirque du Soleil

ThemeRefined environmentMultiple ProductionsArtistic Music and Dance

Unique Venue

RaiseCreate

Six Principles of Blue Ocean StrategyFormulation Principles

Reconstruct market boundaries Focus on the big picture- not the numbers Reach beyond existing demand Get the strategic sequence right

Execution Principles Overcome organizational hurdles Build execution into strategy

Blue Ocean ActivityIn groups of two or three you are to head out into the

community and investigate three different players in a certain market. ( i.e. Pizza Hut, Boston Pizza, and Colonnade Pizza are all in the Pizza Restaurant market).

Your job is to compare these three competitors in the market and create a “Four Action Framework” to identify potential areas for new business.

You must have visited your three competitors by Friday as we will work on these frameworks in class at that time. You will also present your frameworks to the class on Friday.