Strategonomic - Blue Ocean Strategy
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A very short introduction and key tools explanation of Blue Ocean Strategy.
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Strategonomic - Blue Ocean Strategy
- 1. BLUE OCEAN STRATEGY A Quick Summary www.STRATEGONOMIC.com
- 5. Red Ocean vs. Blue Ocean Strategy www.STRATEGONOMIC.com Red Ocean Strategy Blue Ocean Strategy Compete in existing market space. Create uncontested market space. Beat the competition. 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 firm’s activities with its strategic choice of differentiation or low cost. Align the whole system of a firm’s activities in pursuit of differentiation and low cost.
- 6. Value Innovation Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proposition to buyers. Cost savings are made by eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates. Costs Buyer Value Value Innovation www.STRATEGONOMIC.com
- 9. Strategy Canvas The horizontal axis captures the range of factors the industry competes on an invests in. The vertical axis captures the offering level that buyers receive across all these key competing factors. The value curve then provides a graphic depiction of a company’s relative performance across its industry’s factors of competition. High Low Price Use of enological terminology Above-the-line marketing Aging quality Vineyard prestige and legacy Wine complexity Wine range www.STRATEGONOMIC.com
- 10. Case: Cirque du Soleil www.STRATEGONOMIC.com
- 15. Cirque Du Soleil “O” Las Vegas Best Show Ever! www.STRATEGONOMIC.com
- 16. Four Actions Framework The four actions framework offers an technique that breaks the trade-off between differentiation 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 need to be reduced below industry standards; what factors need to be raised above industry standards; and what should be created that the industry has never offered. A New Value Curve Reduce Eliminate Create Raise Which factors should be reduced well below industry standards? Which factors should be created that the industry has never offered? Which factors should be raised well above the industry’s standard? Which of the factors that the industry takes for granted should be eliminated ? www.STRATEGONOMIC.com
- 17. Effective Value Curve www.STRATEGONOMIC.com
- 20. Three Tiers of Noncustomers Your Market First Tier Second Tier Third Tier First Tier “ Soon To Be” non customer, former customer Second Tier Do not use or can not afford, hindered by access barriers (economic, techological, geographical) Third Tier Unexplored non customers, who have never thought of your market’s offerings as an option www.STRATEGONOMIC.com
- 21. Six Paths to reconstruct market boundaries www.STRATEGONOMIC.com Industry Strategic Group Buyer Group Scope of Product and Service Functional – emotional Time
- 22. Pioneer, Settler, Migrator Map Pioneers Migrators Settlers Today Tomorrow www.STRATEGONOMIC.com