Contents 1. 2. 3. 4. 5. 6. Blue Ocean Vs.

Red Ocean Strategy Blue Ocean Strategy Tools Strategy Canvas and Four Action Framework Six Principles of Blue Ocean Strategy Formulating Blue Ocean Strategy Executing Blue Ocean Strategy

Blue Ocean Vs. Red Ocean Strategy

Blue Ocean vs. Red Ocean Strategy

Blue Ocean Strategy

Red Ocean Strategy

Create uncontested market space Make the competition

Compete in existing market space Beat the competition Exploit existing demand

irrelevant
Create and capture new demand

Blue Ocean Strategy Tools

A diagnostic tool for building a

Strategy
Canvas

compelling blue ocean strategy It captures the current state of play in the known market space Allow 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 on the market

Four Action Framework

Eliminate

Raise

Reduce

Create

Four Action Framework

Which of the factors that the industry takes for granted should be eliminated?

Eliminate

Reduce

Which factors should be reduced well below the industry's standard?

Raise

Which factors should be raised well above the industry's standard?

Create

Which factors should be created that the industry has never offered?

Four Action Framework

The Case of Cirque du Soleil (A Circus Company)

Eliminate
Star performers Animal shows Aisle concession sales Multiple show arenas

Reduce
Fun and humor
Thrill and danger

Create

Create
Theme Refined environment Multiple productions Artistic music and dance

Raise
Unique venue

Six Principles of Blue Ocean Strategy

Formulation Principles

Execution Principles

1. Reconstruct market boundaries 2. Focus on the big picture, not the numbers 3. Reach beyond existing demand

1. Overcome key organizational hurdles 2. Build execution into strategy

4. Get the strategic

sequence right

Formulating Blue Ocean Strategy

1. Reconstruct Market Boundaries

Head-to-Head Strategy

Blue Ocean Strategy

Focus on rivals within industry

Looks across alternative industries

Focuses on competitive
position within strategic group Focuses on better serving the buyer group

Looks across strategic

group within industry Redefines the industry buyer group

1. Reconstruct Market Boundaries

Head-to-Head Strategy

Blue Ocean Strategy

Focuses on maximizing the value of product or service offerings within the bounds of its industry Focuses on adapting to

Looks across to complementary product and service offerings Participates in shaping external trends over time

external trends as they

occur

2. Focus on the Big Picture, not the Numbers

Focus on the

The Four Steps of Visualizing Strategy

Big Picture, not

the Numbers

Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication

2. Focus on the Big Picture, not the Numbers

Compare your business with your

Visual Awakening

competitors' by drawing your "as is"

strategy canvas See where your strategy needs to change

2. Focus on the Big Picture, not the Numbers

Go to the field to explore the six

Visual
Exploration

paths to creating blue oceans

Observe the distinctive advantages of alternative products and services See which factors you should eliminate, create, or change

2. Focus on the Big Picture, not the Numbers

Visual

Draw your "to be" strategy canvas

Strategy
Fair

based on insights from field

observations Get feedback on alternative strategy canvases from customers, competitors' customers, and noncustomers Use feedback to build the best "to be" future strategy

2. Focus on the Big Picture, not the Numbers

Distribute your before-and-after

Visual
Communication

strategic profiles on one page for

easy comparison Support only those projects and operational moves that allow your company to close the gap to actualize the new strategy

3. Reach Beyond Existing Demand

First tier: "Soon to be" non-

customers who are the edge of

your market, waiting to jump ship

The Three Tier of Noncustomers

Second tier: "Refusing" noncustomers who consciously choose against your market

Third tier: "Unexplored" noncustomers who are in markets distant from yours

4. Get The Strategic Sequence Right

The Sequence of Blue Ocean Strategy

Buyer utility
Is there exceptional buyer utility in your business idea?

Price Is your price easily accessible to the mass of buyers?

Adoption What are the adoption hurdles in actualizing your

Cost Can you attain your cost target to profit at your

business idea?

strategic price?

A commercially viable blue Ocean idea

5. Overcome Key Organizational Hurdles

Cognitive Hurdle Overcome Key Organizational Hurdles Motivational Hurdle

Resource Hurdle

Political Hurdle

5. Overcome Key Organizational Hurdles

Cognitive Hurdle (status quo)

Ride the "Electric Sewer" Meet with Disgruntled Customers

Resource Hurdle

Redistribute resources to your hot spots Redirect resources from your cold spots Engage in horse trading

5. Overcome Key Organizational Hurdles

Motivational
Hurdle

Zoom in on Kingpins (key influencers) Place kingpins on a fishbowl Atomize to get the organization to change itself

Secure a consigliore on your top Political Hurdle management team Leverage your angels and silence your devils

5. Build Execution Into Strategy

Fair Process of Strategy

Strategy Formulation Process

Fair Process - Engagement, Explanation, Expectation clarity

Attitudes

Trust and Commitment - "I feel my opinion counts"

Behaviour Voluntary Cooperation - "I'll go beyond the call of duty"

Strategy Execution Exceeds Expectation - self initiated