blueoceanstrategy-120109052432-phpapp02.pptx

7/27/2019 blueoceanstrategy-120109052432-phpapp02.pptx

1/15

The Blue Ocean StrategyPresented by: Stephene Roy Cardines Condino
http://www.blueoceanstrategy.com/downloads/jacket.pdf


2/15

Blue Ocean and the Red ocean

Value Innovation

Three Compelling Taglines for a Blue Ocean Strategy

The Four Grids

Visualizing Strategies in 4 Steps

Sequence of Blue Ocean Strategies

Buyer Experience

Profit Model of Blue Ocean Strategy

Blue Ocean Idea Index

Avoiding imitations of Blue Ocean Strategy

Outline of the Report


3/15

Blue Ocean and the Red Ocean

Red Ocean Strategy Blue Ocean Strategy

Competition exist in the Market Place Making an uncontested market space.

Players tries to beat and compete witheach other

Make the competition irrelevant.

Exploit existing demand. Create and capture new demand.

Make the value-cost trade-off. Break the value-cost trade-off.

Align the whole system of a firms

activities with its strategic choice of

differentiationorlow cost.

Align the whole system of a firms

activities in pursuit of differentiation and

low cost.


4/15

For an organization to discover the Blue Ocean and leavethe Bloody red Ocean, An Organization should have the socalled Value Innovation

Value Innovation is the cornerstone of the Blue Ocean

Strategy by making competition irrelevant and opening anuncontested market space.

Value is referred as the Value for both the Buyer andConsumer

Innovation (Product, service or delivery) that creates valuefor the market

Value Innovation is not the same as technology Innovationand Market Pioneering

Value Innovation


5/15

Value without innovation tends to focus on ValueCreation Alone

Innovation without Value tends to be technologydriven, market pioneering and even futuristic

Non Existent of Value and Innovation


6/15

Focused

Divergent

Compelling Tagline

Three Compelling Tagline for a BlueOcean Strategy


7/15

Eliminate/Reduce/Raise/Create theGrid

The four actions framework offers an technique that breaks the trade-off betweendifferentiation and low cost and to create a new value curve. It answers the four key

questions of what industry takes for granted and needs to be eliminated; what factors needto be reduced below industry standards; what factors need to be raised above industrystandards; and what should be created that the industry has never offered.

ANewValueCurve

Reduce

Eliminate Create

Raise

Which factors should bereduced well belowindustrystandards?

Which factors should becreatedthat the industryhas never offered?

Which factors should beraised well abovetheindustrys standard?

Which of the factors thatthe industry takes forgranted should beeliminated?


8/15

Eliminate/Reduce/Raise/Create theGrid

Eliminate

Enological terminology and distinctions

Aging qualities

Above-the-line marketing

Raise

Price versus budget wines

Retail Store involvement

Reduce

Wine complexity

Wine range

Vineyard prestige

Create

Easy drinking

Ease of selection

Fun and adventure

The eliminate-reduce-raise-create grid pushes companies not only to ask all four questions in the fouractions framework but also to acton all four to create a new value curve. By driving companies to fill in thegrid with the actions of eliminating, reducing, raising, and creating, the grid provides four immediatebenefits: it pushes them to simultaneously pursue differentiation and low costs; identifies companies whoare only raising and creating thereby raising costs; makes it easier for managers to understand and comply;and it drives companies to scrutinize every factor the industry competes on.


9/15

Visualizing Strategy in Four StepsThe four steps include visual awakening, visual exploration, visual strategy fair, and visualcommunication.

1. Visual

Awakening

2. Visual

Exploration

3. Visual Strategy

Fair

4. Visual

Communicatio

n

Compare your

business with your

competitorsby

drawing your as is

strategy canvas.

See where your

strategy needs to

change

Go into the field to

explore the six paths to

creating blue oceans.

Observe the distinctive

advantages of

alternative products and

services.

See which factors you

should eliminate,

create, or change.

Draw your to bestrategy

canvas based on insights

from field observations.

Get feedback on

alternative strategy

canvases from customers,

competitorscustomers,

and noncustomers.

Use feedback to build the

best to befuture strategy.

Distribute your before-

and-after strategic profiles

on one page for easy

comparison.

Support only those

projects and operational

moves that allow your

company to close thegaps to actualize the new

strategy.


10/15

Sequence of Blue Ocean Strategy

An important part of blue ocean strategy is toget the strategic sequence right. Thissequence fleshes out and validates blue oceanideas to ensure their commercial viability. Thiscan then reduce business model risk. In this

model, potential blue ocean ideas must passthrough a sequence of buyer utility, price, cost,and adoption. At each step there are only twooptions: a yesanswer, in which case the ideamay pass to the next step, or no. If an ideareceives a no at any point, the company caneither park the idea or rethink it until you get a

yes.

Buyer utility

Is there exceptional buyer utility in your

business idea?

Price

Is your price easily accessible to the

mass of buyers?

Cost

Can you attain your cost target to profit

at your strategic price?

Adoption

What are the adoption hurdles in

actualizing your business idea? Are

you addressing them up front?

A CommerciallyViable Blue Ocean

Idea

No-- Rethink

Yes

Yes

Yes

Yes

No-- Rethink

No-- Rethink

No-- Rethink


11/15

Buyer ExperienceSix Stages of Buyers experience. The six stages of Buyer experience is

running more or less sequentially from purchase to disposal. Each stageencompasses a wide variety of specific experiences. At each stage,managers can ask a set of questions to gauge the quality of buyersexperience.

Purchase Delivery Use Supplements Maintenance Disposal

How long does it

take to find theproduct youneed?

Is the place ofpurchaseattractive andaccessible?

How secure is the

transactionenvironment?

How rapidly canyou make apurchase?

How long does

it take to getthe productdelivered?

How difficult isit to unpack andinstall the newproduct?

Do buyers have

to arrangedeliverythemselves? Ifyes, how costlyand difficult isthis?

Does the product

require training orexpert assistance?

Is the product easy tostore when not in use?

How effective are theproducts features andfunctions?

Does the product orservice deliver farmore power or optionsthan required by theaverage user? Is inovercharged with bellsand whistles?

Do you need other

products and servicesto make this productwork?

If so, how costly arethey?

How much time dothey take?

How easy are they toobtain?

Does the product

require externalmaintenance?

How easy is it tomaintain and upgradethe product?

How costly ismaintenance?

Does use of the

product createwaste items?

How easy is it todispose of theproduct?

Are there legalor environmentalissues in

disposing of theproduct safely?

How costly isdisposal?


12/15

Blue Ocean Idea Index

Utility Is there exceptional utility? Are there

compelling reasons to buy your offering?

Price Is your price easily accessible to the

mass of buyers?

Cost Does your cost structure meet the target

cost?

Adoption Have you addressed adoption hurdles up

front?


13/15

Profit Model of Blue Ocean StrategyThe profit model of blue ocean strategy shows how valueinnovation typically maximizes profit by using the three levers ofstrategic price, target cost, and pricing innovation.

The Strategic Price

The Target Profit

The Target Cost

Streamlining and CostInnovations

Partnering

Pricing Innovation


14/15

A Value Innovation move does not make sense based onconventional strategic logic

Brand Image conflict prevents companies from imitating a blueocean strategy

Natural monopoly blocks imitation when the size of a marketcannot support another player Patents or legal permits block imitation The high volume generated by a value innovation leads to rapid

cost advantages, placing potential imitators at an ongoing cost

disadvantage Network externalities discourage imitation Imitation often requires significant political, operational and

cultural changes

Avoiding Imitations


15/15

Retrieved November 8, 2011

www.slideshare.net/jessestarmer/blue-ocean-strategy-summary-61974

Retrieved November 8, 2011 from

www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/

References
http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/http://www.ribbonfarm.com/2007/08/06/book-review-blue-ocean-strategy/

Documents

blueoceanstrategy-120109052432-phpapp02.pptx