Blue Ocean Strategy. Kim & Mauborgne. Kim & Mauborgne

Transcription

1 Blue Ocean Strategy

2 Red Ocean vs Blue Ocean Strategy Red Ocean Strategy Compete in existing market space Beat the competition Exploit existing demand Make the value-cost trade-off Align the whole system of a firm s activities with its strategic choice of differentiation or low cost Blue Ocean Strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the whole system of a firm s activities in pursuit of differentiation and low cost

3 Researching the History of Blue Ocean Creation Data: 150 blue ocean creations, more than 30 industries, over 100 years ( ) hotel, cinema, retailing, airline, energy, computer, broadcasting, home construction, automobile, steel manufacturing, chemicals, cosmetics, software, etc. Variables considered: industrial, organizational, strategic

4 Substantially Higher Returns from Investments in Blue Oceans Red Oceans Market-Competing Business Launches Blue Oceans Market-Creating Business Launches

5 How do you create a Blue Ocean in your industry?

6 The As Is Strategy Canvas for the US Wine Industry hi Premium offering level Budget Wines lo Price Use of enological terminology and distinctions Above-theline marketing Aging quality Vineyard prestige and legacy Wine complexity Wine range

7 The To Be Strategy Canvas of [yellow tail] hi Premium Wines offering level Budget Wines [yellow tail] lo Price Use of enological Use terminology of enological and Above-the- distinctions terminology in and wine line communication distinctions marketing Aging quality Vineyard prestige and legacy Wine complexity Wine range Easy drinking Ease of selection Fun & Adventure

8 The Four Actions Framework Reduce Which factors should be reduced well below the industry s standard? Eliminate Which of the factors that the industry takes for granted should be eliminated? A New Value Curve Raise Create Which factors should be created that the industry has never offered? Which factors should be raised well above the industry s standard?

9 Eliminate-Reduce-Raise-Create Grid: The case of [yellow tail] Eliminate Enological terminology and distinctions Aging qualities Above-the-line marketing Reduce Wine complexity Wine range Vineyard prestige Raise Price versus budget wines Retail store involvement Create Easy drinking Ease of selection Fun and adventure

10 Value Innovation: the simultaneous pursuit of differentiation and low cost Eliminate Reduce Raise Create Blue Ocean Cost Buyer Value

11 Six Paths to Blue Ocean Strategy The six conventional boundaries of competition Industry Strategic group From Competing Within Buyer group Scope of product or service offering Functional-emotional orientation of an industry Time To Creating Across

12 Shifting the Strategic Focus Conventional Logic Blue Ocean Strategy Logic Industry focus on rivals within its industry looks across alternative industries Strategic group focuses on competitive position within strategic group looks across strategic groups within industry Buyer group focuses on better serving the buyer group redefines the industry buyer group Scope of product or service offering focuses on maximizing the value of product and service offerings within the bound of its industry looks across to complementary product and service offerings Functional-emotional orientation focuses on improving priceperformance within the functional -emotional orientation if its industry rethinks the functionalemotional orientation of its industry Time focuses on adapting to external trends as they occur participates in shaping external trends over time

13 Pioneer-Migrator-Settler Map Pioneers The only ones with a mass following Migrators Best in the crowd Settlers Me-toos Today?

14 Pioneer-Migrator-Settler Map Pioneers The only ones with a mass following Migrators Best in the crowd Settlers Me-toos Today Tomorrow

15 Minimizing Risks and Maximizing Opportunities in Formulating and Executing Blue Ocean Strategy Formulation Principles Formulation Risks Reconstruct market boundaries Search Risk Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Planning Risk Scale Risk Business Model Risk Execution Principles Overcome key organizational hurdles Build execution into strategy Execution Risks Organizational Risk Management Risk

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