2 BLUEOCEANSTRATEGYMBAMINI2ELECTIVE COURSE CourseObjectives: What does it take for a company to stand apart and create strong profitable growth? Isthere asystematicapproachtobreakingoutoftheredoceanofbloodycompetitionandachievinghigh performance? Competitive strategy asks firms to analyze existing industry conditions and best position themselves against the competition by pursuing either differentiation or cost leadership.here strategy is seen as making a tradeoff between value and cost. Whereas this approachprovides firmswiththemethodsandtoolsforcompetinginexistingmarketspace,it leavesunaddressed the critical challenge of how to redefine industry boundaries and create new market space whichbecomesincreasinglyimperativegiventhebusinessrealitiestoday.blueoceanstrategyfills this important void in the strategy field by offering a systematic approach to reconstructing industry boundaries and creating uncontested market space. By guiding companies to pursue both differentiation and low cost, blue ocean strategy seeks to break the value2cost trade2off, therebyhelpingcompaniescreatenewdemandand achievestrongprofitable growth. This course introduces the key concepts, frameworks and tools of Blue Ocean Strategy, developedbyw.chankimandrenéemauborgne,andlaysoutthe fundamentalmethodology for creating and capturing blue oceans of new market space. Using a series of newly developed, theory2based videos and cases, this course provides participants with a comprehensiveunderstandingofthecoreconceptsofblueoceanstrategyandgives participants an opportunity to explore and study in depth the logic and methods thatarecommontoblue oceanstrategicmovesinrealbusinesssettings. CourseMethodology: Thiscourseisorganizedaroundthekeyconceptualblocksofblueoceanstrategy.Itemployshigh2 impact teaching materials to ensure solid conceptual learning and a rewarding classroom experience. Instead of asking students to read lengthy paper casesbefore class, most of the sessionsinthiscourseusetheorybased,video,cases,tohighlighttheblueoceanstrategic moves under study and provide the needed factual informationandconceptualinsightsforahighly effective class discussion. Based on first2hand research and face2to2face interviews, the videos are carefully constructed to capture the dynamics of actual strategic settings, promising rich understanding,deeplearningand anengagingexperienceintheclassroom.short,paper,cases,are used to complement the full2fledged video cases. These paper cases are assigned as pre2class readings to prepare participants with the basic facts and background information of the blue ocean strategic moves under study and to lay out the key questions for participants to think about, thereby ensuring a more effective watching experience of the video cases in the classroom.
Participantsareexpectedtocompletetheirpre2classreadings(shortpapercasesand conceptualarticles)andwatchvideocasesandfollowinteractivelecturesinthe classroom. Based on these, participants are expected to apply their analytical thinking and actively contributetoclassdiscussions.thefinalexamisa48hourtake2homethattestsstudents on theirunderstandingandmasteryofthecoreconceptsandframeworksofblueoceanstrategy andtheirapplications. OverviewofSessionsandKeyDates Date Session Casepreparation Readings (TBD) Session1 RedOceanStrategyvs.Blue OceanStrategy YellowTail CraftingWinningStrategiesin amaturemarket:theuswine Industryin2001 (shortpapercase) Kim&Mauborgne,2015. BlueOceanStrategy Chapter1, CreatingBlue Oceans Session2 BlueOceanStrategy: AligningValue,Profitand PeopleinPursuitof DifferentiationandLowCost Session3 NoncustomerAnalysis Session4 SixPathstoCreatingBlue Oceans Session5 GettingtheStrategic SequenceRight Session6 ExecutingBlueOcean Strategy Wikipedia MakingaBlueOceanStrategic MovethatDiscourages Imitation (shortpapercase) NintendoWii LessonsLearnedfrom Noncustomers (shortpapercase) Zappos (A):BringtheShoeStoreto YourHome (shortpapercase) Rehability (A):TheHighlyRegulated GermanMedicalSupplies Industry (shortpapercase) (B):MorethanJust Wheelchairs (shortpapercase) TataNano ThePeople scarthatpromises toreconstructtheautomobile Industry (papercase) TataNano SamepapercaseasinSession5 Zappos (B):StrategyPoweredby CultureandPeople (short papercase) 3 Kim&Mauborgne,2009. HowStrategyShapes Structure Kim&Mauborgne,2015. BlueOceanStrategy Chapter9, AlignValue, Profit,andPeople Propositions BlueOceanStrategy 2015.Chapter5, Reach BeyondExistingDemand BlueOceanStrategy 2015.Chapter3, ReconstructMarket Boundaries BlueOceanStrategy 2015.Chapter6, Get thestrategicsequence Right BlueOceanStrategy2015. Chapter7, OvercomeKey OrganizationalHurdles Chapter8 BuildExecution intostrategy
Session7 MakingBlueOceanStrategic Moves AHistoricalPattern Session8 ManagingBlueOcean CreationattheCorporate Level Take2homeexam RequiredReadings: HistoricalMoves:Lessons frombreakthroughstrategic Moves(onepagesynopsis) Salesforce.com CreatingaBlueOceanin theb2bspace (papercase) Apple HowApple scorporate StrategyDroveHigh Growth (shortpapercase) 4 BlueOceanStrategy2015. Chapter10, RenewBlue Oceans; AppendixA, ASketchof thehistoricalpatternof BlueOceanCreation BlueOceanStrategy2015. Chapter10, RenewBlue Oceans. Collectionof articlesonapple smajor events Kim,WChanandRenéeMauborgne,2015,Blue,Ocean,Strategy:,How,to,Create,New, Market,Space,and,Make,the,Competition,Irrelevant,ExpandedEdition.Boston:Harvard BusinessReviewPress. Kim,WChanandRenéeMauborgne,2009, HowStrategyShapesStructure, Harvard,Business,Review,,September,pp73280. Papercasematerialsandothercomplementaryreadingswillbeincludedinthecoursepack. CourseContent: Session1:RedOceanStrategyvs.BlueOceanStrategy Howisblueoceanstrategy(BOS)differentfromredoceanstrategy(ROS)?Whatare the key principles of the blue ocean strategic approach? This overview session contrasts the BOSapproach with the ROS approach in the context of the US wine industry, showing how the same industry data was interpreted differently under the two strategic perspectives andhowthetwoapproachesledcompaniestopursue divergent strategic courses, which in turn yielded different strategic outcomes. Studentswillgainanappreciationforthe fundamentaldifferencesbetweenredocean strategy and blue ocean strategy and the key concepts of blue ocean strategy, particularlythenotionsofvalueinnovationandreconstructingmarketboundaries. Focalcase: YellowTail(video) Readings: Crafting,Winning,Strategies,in,a,Mature,Market:,The,US,Wine,Industry,in,2001,(short papercase) Blue,Ocean,Strategy,,Chapter1, CreatingBlueOceans.
5 Session2:BlueOceanStrategy:AligningValue,ProfitandPeopleinPursuitof DifferentiationandLowCost Thissessionbuildsonsession1toarticulatewhatblueoceanstrategyisabout.Akeynotion to appreciate here is that any valid strategy should be based upon a systematic approach thatrequiresanalignedsetofstrategypropositions value,profitandpeople.inthecase ofredoceanstrategy,thethreepropositionsarealignedinpursuitofeither, differentiation or,lowcostwhereasinthecaseofblueoceanstrategy,theyarealignedinpursuitofboth, differentiation and, low cost. This session will go on to explore the structural and organizationalconditionsthatmakeonestrategicapproachabetterfitthananother.akey pointhereisthatrosandbosapproacharenotmutuallyexclusivebutcomplementeach otherinbusinessreality.thevideocaseofwikipediaisemployedheretoshowhowa blue oceanstrategicmoveisbuiltuponandsustainedbyanalignedandreinforcingsetofvalue, profitandpeoplepropositionsinpursuitofboth,differentiationand,lowcost., Focalcase: Wikipedia(video) Readings: Making,a,Blue,Ocean,Strategic,Move,that,Discourages,Imitation,(shortpapercase) HowStrategyShapesStructure, byw.chankimandrenéemauborgnein Harvard, Business,Review,September,2009,pp73280. Blue,Ocean,Strategy,Chapter9, AlignValue,Profit,andPeoplePropositions. Session3:NoncustomerAnalysis Whilemostfirmsfighttodivideupexistingdemand,whichtendstoproduceimitative,not innovativeapproachestothemarket,bosaimstocreateallnewdemandandnewmarket space. Yet, most organizations have a hard time shifting their focus beyond the existing customersofanindustrytothenoncustomersthatareoutthere.whileorganizations track customer satisfaction and conduct customer analyses, hardly an organization has a systematic approach to noncustomer analysis. Session 3 tackles this issue by introducing noncustomer analysis, which is the analytical starting point for the process of blue ocean creation. The session introduces the three tiers of noncustomers and discusses how noncustomer insights can guide a company to reconstruct industry boundaries and create andcapturenewdemand,usingthevideocaseexampleofnintendowii.a complementary exampleaboutthehistoricalstrategicmovesofgilletteisalsointroducedtoshowhow over timebyapplyingthenoncustomeranalysis,organizationscancontinuetounlocknewtiers ofcustomersandexpandthesizeofthepie. Focalcase: NintendoWii(video) Readings: Nintendo,Wii:,Lessons,Learned,from,Noncustomers,(shortpapercase) Blue,Ocean,Strategy,Chapter5, ReachBeyondExistingDemand.
6 Session4:SixPathstoCreatingBlueOceans What are the specific paths that companies can apply to create new market space and unlock noncustomers? Based on a thorough conceptual understanding of the blue ocean strategiclogicachievedthroughthefirstthreesessions,session4setsouttointroducea key framework for creating blue oceans the six paths framework, which lays out the systematic paths to reconstruct market boundaries. This session zooms in on the strategic moves ofzappos (Case A) and Rehability, a German medical supply company, to demonstrate howthesecompaniescreatednewmarketspacebymeansofthesixpaths. The session seeks to both equip participants with the practical methodology for reconstructing market boundaries and reinforce their understanding about blue ocean strategyasasystematicand risk2minimizingapproachvis2à2vistherandomandrisk2taking approachoftenapplied toinnovation. Focalcases: Zappos(A)(video) Rehability(video) Readings: Zappos,A:,Bring,the,Shoe,Store,to,your,Home,(shortpapercase) Rehability, (Part, A):, The, Highly, Regulated, German, Medical, Supplies, Industry, (short paper case) Rehability,(Part,B):,More,than,Just,Wheelchairs,(shortpapercase) Blue,Ocean,Strategy,Chapter3, ReconstructMarketBoundaries. Session5:GettingtheStrategicSequenceRight Howcanacompanyassesswhetheranewbusinessideacanunlockablueoceanornot? Whatshouldbetherightsequenceofactionsinbuildingacommerciallyviableblueocean strategy? Session 5 tackles these questions by closely examining the case of Tata Nano (Videos Part I and Part II) and investigating how Tata Nano was conceived based on an analysis of the largest tier of noncustomers buyers in the alternative industry of two wheelers and how a strategic price was set against alternatives to capture the mass of target buyers. The session will explore how Tata management and the Tata Nano team worked on the basis of exceptional utility and a strategically set price to pursue target costing in order to build a viable business model, and how the Tata Nano endeavor was initially well received and supported by employees, partners and the general public. Participantswillmasterthekeystepstounlockblueoceansinthesequenceof utility2price2 cost2adoption and will learn to evaluate the commercial viability of a blue ocean idea throughtheblueoceanideaindex(boiindex). Focalcase: TataNano(video,PartIandPartII) Readings: Tata, Nano:, The, People s, Car, that, Promises, to, Reconstruct, the, Automobile, Industry,(paper case) Blue,Ocean,Strategy,Chapter6, GettheStrategicSequenceRight.
7 Session6:ExecutingBlueOceanStrategy OnceacompanyhaspassedthelitmustestoftheBlueOceanIdeaIndexitisreadytoshift gears to executing its blue ocean strategy. Session 6 presents the key principle of BOS execution a strong people proposition should be in place and aligned with a compelling value proposition and a viable profit proposition to ensure the smooth and successful executionofablueoceanstrategy.continuingtoexplorethetatananoexperience (Video Part III), the session demonstrates that despite its strong value and profit propositions, a majorweaknessinthepeoplepropositionoftatanano sstrategybackfiredonitsoriginal value and profit propositions and compromised the blue ocean the world so eagerly awaited. As a contrast,the session concludes byexamining Zappos Case B to show that a strongpeoplepropositionconditionedandensuredthesuccessfulexecutionofzappos blue oceanstrategy. Focalcases: TataNano(videoPartIII) Zappos(B)(video) Readings: Tata, Nano:, The, People s, Car, that, Promises, to, Reconstruct, the, Automobile, Industry, (the samepapercaseusedforsession5) Zappos,B:,Strategy,Powered,by,Culture,and,People,(shortpapercase) Blue, Ocean, Strategy, Chapter 7, Overcome Key Organizational Hurdles and Chapter 8 BuildExecutionintoStrategy. Session7:MakingBlueOceanStrategicMoves AHistoricalPattern While the first six sessions lay out the key principles and methodologies of blue ocean strategy, Session 7 highlights,through historicalfacts, that creatingblue oceans isnot fad and fashion but a constant occurrence throughout the history of industry evolution with consistentpatterns.acentralfindingisthattheunitofanalysisforstudyingthese patterns shouldbe strategicmove ratherthan company or industry.todrawouttheconsistent patterns,thesessionfirstreviewsthehistoricalmovesoftheautomobileindustry 1 which illustrates a series of breakthrough strategic moves that changed the industry landscape, creatednewmarketspaceandprofitablegrowth,andresetthetrajectoryforindustry evolution. The session then examines the case of Salesforce.com, exploring how the companycreatedandreneweditsblueoceanatthebusinesslevelbymakingblueocean strategic moves successively on the three platforms of its business offering product, serviceanddelivery. Focalcases: HistoricalMoves(video) Salesforce.com(papercase) Readings: Salesforce.com:,Creating,a,Blue,Ocean,in,the,B2B,Space,(papercase) 1 Whilethecase HistoricalMoves:LessonsfromBreakthroughStrategicMoves reviewsthe historicalmovesofthreeindustries(automobile,computerandcinema),thissessionwillonly examinethoseoftheautomobileindustryduetotimeconstraints.
8 Blue, Ocean, Strategy, the section From Company and Industry to Strategic Move in Chapter1(pp9212only) Blue,Ocean,Strategy,,Chapter9, Conclusion:TheSustainabilityandRenewalofBlueOcean Strategy. Blue, Ocean, Strategy, Appendix A, A Sketch of the Historical Pattern of Blue Ocean Creation. Session8:ManagingBlueOceanCreationattheCorporateLevel WhereasSession7highlightstheconceptualandpracticalsignificanceof strategic moves and focuses on blue ocean strategy at the business level, Session 8 aims to demonstrate howacompanyshould manageitsbusinessportfoliobyplanningand makingblueocean strategic moves at proper time points to create and maintain the momentum for future profitable growth. The session studies the case of Apple, reviews and discusses its blue ocean strategic moves over the years, showing that Apple s past success was built upon successive blue ocean strategic moves. The Apple experience shows that BOS and ROS shouldcomplementeachotherinbusinessreality;insteadofsubstitutingonefortheother, acompanyneedstounderstandhowtoapplybothstrategiestogenerateahealthyprofit andastronggrowthprospect. Focalcase: Apple(papercaseandvideoclips) Readings: How,Apple s,corporate,strategy,drove,high,growth,(shortpapercase) Blue,Ocean,Strategy,thesection VisualizingStrategyattheCorporateLevel inchapter4 (pp962101only) CollectionofarticlesonApple smajorevents(includedinthecoursepack) Evaluation: Thegradeinthiscoursedependsmainlyontwofactors:(1)thestudent scontributiontothe learningenvironmentand(2)afinalopen2booktake2homeexam. Contributiontothelearningenvironment:50% Individualcontributiontothelearningenvironmentwillbeassessedbythestudent s: 1)!Classattendance 2)!Participation in class discussion. This does not only mean air time, but also quality of contribution,whichnormallydependsonhowthoroughthestudent spre2classpreparation is. Take2homeexam:50% Thefinalexamwillbeatake2homeopen2bookone.Participantswillbeaskedtoanswera series of questions on the core concepts of blue ocean strategy and to demonstrate their understandingonhowtoapplybosframeworksandtoolsinrealbusinesssettings.
9 StudentSupport: The instructors will be available to meet with students during, office, hours, or by, appointment, to answer their questions, further discuss course content or listen to their feedback about how their learning is proceeding and how the instructors can help in this process. Officehours:TBD