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rinciples of Blue Ocean StrategyThe six main principles guide companies through the formulation and execution of blue ocean
strategy in a systematic, risk-minimizing manner.
The first four principles address blue ocean strategy formulation:
. !econstruct market boundaries. This principle identifies the paths by "hich managers can
systematically create uncontested market space across di#erse industry domains, hence
attenuating search risk. $sing a Six %aths frame"ork, it teaches companies ho" to make the
competition irrele#ant by looking across the six con#entional boundaries of competition to open
up commercially important blue oceans.
&. 'ocus on the big picture, not the numbers. This principle, "hich addresses planning risk,
presents an alternati#e to the existing strategic planning process, "hich is often criticized as a
number-crunching exercise that keeps companies locked into making incremental
impro#ements. $sing a #isualizing approach that dri#es managers to focus on the big picture,
this principle proposes a four-step planning process for strategies that create and capture blue
ocean opportunities.
(. !each beyond existing demand. To create the greatest market of ne" demand, managers
must challenge the con#entional practice of aiming for finer segmentation to better meet existing
customer preferences, "hich often results increasingly small target markets. )nstead, this
principle, "hich addresses scale risk, states the importance of aggregating demand, not by
focusing on the differences that separate customers but rather by building on the po"erful
commonalities across noncustomers.
*. +et the strategic seuence right. The fourth principle describes a seuence that companies
should follo" to ensure that the business model they build "ill be able to produce and maintain
profitable gro"th. hen companies follo" the seuence of / utility, &/ price, (/ cost, and */
adoption reuirements, they address the business model risk.
The remaining t"o principles address the execution risks of blue ocean strategy.
0. O#ercome key organizational hurdles. Tipping point leadership sho"s managers ho" to
mobilize an organization to o#ercome the key organizational hurdles that block the
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implementation of a blue ocean strategy. This principle mitigates organizational risk, outlining
ho" leaders and managers can surmount the cogniti#e, resource, moti#ational, and political
hurdles in spite of limited time and resources.
1. Build execution into strategy. This principle introduces fair process to address the
management risk associated "ith people2s attitudes and beha#iors. Because a blue ocean
strategy represents a departure from the status uo, fair process is reuired to facilitate both
strategy making and execution by mobilizing people for the #oluntary cooperation needed for
execution. By integrating execution into strategy formulation, people are moti#ated to act.