BLUE OCEAN STRATEGYGROUP 10Cherranjivi, Junaid, Subhasni, Ayushi, Phanindra, Hriday

RED OCEAN Basis of competition is trying to

get a bigger share in the same defined market.

Boundaries are defined and accepted.

Competitive rules of the game are well – known and predefined.

BLUE OCEAN All the industries not in

existence today You create the demand rather

than fight over it. You define the rules for

competition You are the only player in such a

market

BLUE OCEAN VS. RED OCEAN BLUE OCEAN• 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 with its strategic choice of differentiation and low cost

RED OCEAN• 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 its strstegic choice of differentiation or low cost

SIX PRINCIPLES OF BLUE OCEAN STRATEGYFormulation Principles

1. Reconstruct market boundaries

2. Focus on the big picture, not the number

3. Reach beyond existing demand

4. Get the strategic sequence right

Execution Principle1. Overcome key

organizational hurdles2. Build execution into strategy

STRATEGY CANVAS• The strategy canvas is both a diagnostic and an action

framework for building a compelling blue ocean strategy. The horizontal axis captures the range of factors that the industry competes on and invests in, while the vertical axis captures the offering level that buyers receive across all of these key competing factors.

THE STRATEGY CANVAS SERVES TWO PURPOSES:• To capture the current state of play in the known market space, which

allows users to clearly see the factors that the industry competes on and where the competition currently invests and

• To propel users to action by reorienting focus from competitors to alternatives and from customers to noncustomers of the industry

• The value curve is the basic component of the strategy canvas. It is a graphic depiction of a company’s relative performance across its industry’s factors of competition. A strong value curve has focus, divergence as well as a compelling tagline.

FOUR ACTIONS FRAMEWORK

RECONSTRUCT MARKET BOUNDARIESHead-to-Head strategy• Focus on rivals within industry• Focuses on competitive position

within strategic group• Focuses on better serving the

buyer group• Focuses on maximizing the value

of product or service offering s within the bounds of its industry

• Focuses on adapting to external trends as they occur

Blue Ocean Strategy• Looks across alternatives

industries• Looks across strategic group

within industry• Redefines the industry buyer

group• Looks across to complementary

product and service offering • Participates in shaping external

trends over time

FOUR STEPS OF VISUALIZING STRATEGY

VISUAL AWAKENING • Compare your business with your competitors by drawing

your as is strategy canvas• See where your strategy needs to changesVISUAL EXPLORATION• Go to the field to explore the six paths to creating blues

ocean• Observe the distinctive advantages of alternatives product

and service• See which factor you should eliminate, create, or change

VISUAL STRATEGY FAIR

• Draw your “to be” strategy canvas based on insights from field observation

• Get feedback on alternative strategy canvases from customers, competitors’ customers and noncustomers

• Use feedback to build the best “to be” future strategy

VISUAL COMMUNICATION

• Distribute your before-and-after strategic profile on one page for easy comparison

• Support only those project and operational moves that allow your company to close the gap to actualize the new strategy

THE THREE TIER OF NON-CUSTOMER

•“soon to be” non customers who are the edge of market ,waiting to jump ship

First Tier•“ Refusing "on-customer who consciously choose against your marketSecond

Tier

•“Unexpected” non-customer who are in market s distant from yours

Third Tier

BUYER UTILITY Is there exceptional buyer

utility in your business idea?

PRICEIs your price easily accessible to the

mass of the buyers?

COSTCan you attain your cost target to profit at your

strategic price?

ADOPTIONWhat are the adoption

hurdles in actualizing your business idea?

A commercially viable blue ocean idea

The Sequence of Blue Ocean Strategy

Motivational Hurdle• Zoom in on kingpins (key influencers)• Place kingpins on a fish blow• Atomize to get the Organizational to change itselfPolitical Hurdle • Secure a consigliere on your top management team• Leverage your angels and silence your devils

Overcome Key Organizational HurdlesCognitive Hurdle • Ride the “Electric sewer”• Meet with Disgruntled CustomerResource Hurdle• Redistribute resources to your hot spots• Redirect resources from your cold spots• Engage is horse trading