Blue Ocean Strategy How to create uncontested market space and make the competition irrelevant...
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Transcript of Blue Ocean Strategy How to create uncontested market space and make the competition irrelevant...
Blue Ocean StrategyBlue Ocean Strategy
How to create How to create
uncontested market spaceuncontested market space
and make the competition irrelevantand make the competition irrelevant
Katharina BOST 12/06/2006
About the Founders: Chan & Renee
W. Chan Kim
• The Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management
Renée Mauborgne
• The INSEAD Distinguished Fellow and Professor of Strategy and International Management
Two worlds …
Two worlds …
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 strategic firm's activities with its choice of differentiation or low cost.
Align the whole system of a firm's activities in pursuit of differentiation and low cost.
VALUE INNOVATION
The rising Imperative of Creating Blue Oceans
• supply exceeds demand
• globalization
• accelerated commoditization of products and services
• increasing price wars
• shrinking profit margins
• brands are becoming more similar
select based on price
• ...
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Reconstruct market boundaries
IndustryFocuses on rivals within its industry
Strategic GroupFocuses on competitive position within strategic group
Buyer GroupFocuses on better serving the buyer group
Scope of Product and Service
Offerings
Focuses on maximizing the value of product and service offerings within the bounds of its industry
Functional-emotional Orientation of an
Industry
Focuses on improving price-performance with the functional-emotional orientation of this industry
Time/TrendsFocuses on adapting to external
trends as they occur
Looks across alternative industries
Looks across strategic groups within its industry
Redefines the buyer group of the industry
Looks across to complementary product and service offerings that go beyond the bounds of its industry
Rethinks the functional-emotional orientation of its industry
Participation in shaping external trends over time
Boundaries of Competition
Head-to-HeadCompetition
Creating New Market Space
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Reach beyond existing demand
Core Customer Noncostumer
Soon-to-be-NC Refusing Customer
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Get the Strategic Sequence right
Buyer utility
Is there exceptional buyer utility in your business idea?
Adoption
What are the adoption hurdles in actualizing your business idea?
Are you addressing them up front?
Price
Is your price easily accessible to the mass of buyers?
Cost
Can you attain your cost target to profit at your strategic price?
A commercially viable Blue Ocean Strategy
YES
YES
YES
YES
No Rethink
No Rethink
No Rethink
No Rethink
The case of Accor's Formule 1
The value curve of Formule 1 in the French Low Budget Hotel Industry
References
• W. Chan Kim, Renée Mauborgne, Blue Ocean Strategy, 2005,
Havard Business School Press.
• http://www.blueoceanstrategy.com
• HANDELSBLATT, Donnerstag, 06. Oktober 2005,
Mit Nichtkunden neue Märkte finden.
• http://www.hotelformule1.com
Thank you for
your attention!!!