Chapter 9

Team 1Section:092 Time: 4:30-6:50Members: Daniel, Jacob, & SethBook: Blue OceansDate: 06/15/2010

Chapter 9 Conclusion

•Sustainability & Renewal

•Team 1 •Daniel, Jacob, & Seth•Blue Oceans Strategy

Barriers to Imitation

Barriers to ImitationNatural monopoly blocks

imitation when the size of a market cannot support another player◦Belgian cinema, Kinepolis, created

first megaplex in Europe in Brussels◦Highly successful◦No imitators because Brussels

cannot support a second megaplex

Barriers to ImitationPatents and legal permits can

block imitationHigh volume generated by a

value innovation leads to rapid cost advantages

Network externalities also block companies from easily and credibly imitating a blue ocean strategy

Barriers to ImitationPolitics can kick in and delay the

adoption of the blue ocean strategy

When a company offers a leap in value, it rapidly earns buzz and loyal following◦Ex: iPhone

Barriers to ImitationBarriers to imitation are highVery rarely is there rapid

imitation of blue ocean strategyMust get each strategic element

right, as well as aligning them in an integral system to deliver value innovation

When to Value-Innovate Again

When to value-innovate again?Eventually every blue ocean

strategy will be imitated◦Typically you launch offenses to keep

market share ◦Fall into the trap of competing to

beat the competition◦Overtime your competition becomes

the center of your strategy

When to value-innovate again?Monitor value curves on your

strategy canvas (focus, divergence, tagline)◦This will signal when to value-

innovate or when to stay putStay in blue ocean for as long as

possible◦Lengthen, widen, and deepen your

foothold in the blue ocean through operational improvements and geographical expansions

When to value-innovate again?When ocean turns red

(supply>demand)◦Chart your value curve and your

competitor’s value curves on the strategy canvas. When you visually see the degree of imitation and convergence on your value curve, blue ocean is turning red

◦Value-innovate to create a new blue ocean

When to value-innovate again?Overall, to obtain high

performance in the overcrowded business world, companies should go beyond competing for market share to creating blue oceans and making the competition irrelevant