NUR SHAZLEEN YAZMEEN AHMAD HAWARI 2008738521MOHD FAZLI AZMAN 2008270034ZULKIFLEE ABD RAHIM 2008720413

BLUE OCEAN STRATEGY

Creating UncontestedMarket Space

and Making theCompetition Irrelevant

ABOUT THE BOOKAuthor: W. Chan Kim & : Renee MauborgnePublisher: Harvard Business School PressPages: 256 pp

ABOUT AUTHORW. Chan Kim Renee

Mauborgne

W. Chan Kim is a professor of strategy

and international management at INSEAD

in Fontainebleau, France. Previously, he

taught at the University of Michigan Business

School. He has written for numerous business journals, the Financial Times, The Wall Street

Journal and The New York Times, and is a founder of the Value

Innovation Network. He is an advisory member

for the European Union and the Country Advisor

to Malaysia

Renée Mauborgne is a Distinguished Fellow at INSEAD, where she is a

professor of strategy and management. She is also a Fellow of the

World Economic Forum and published

numerous articles on strategy and managing

multinational corporations.

CHAPTER STRUCTUREPAR

T ON

E: Blu

e Oce

an Strategy

• Creating Blue Oceans

• Analytical Tools & Frameworks

PART

TWO:

Formulatin

g Blu

e Oce

an Strategy

• Reconstruct Market Boundaries

• Focus on the Big Picture, Not the Numbers

• Reach Beyond Existing Demand

• Get the Strategic Sequence Right

PART

THREE

: Executi

ng Blu

e Oce

an Strategy

• Overcome Key Organizational Hurdles

• Build Execution into Strategy

• Conclusion: The Sustainability and Renewal of Blue Ocean Strategy

BLUE OCEAN STRATEGYThe high growth and profits an organization

can generate by creating new demand in an uncontested market space

Authors argue that red ocean strategies while necessary, are not sufficient to sustain high performance. Companies need to go beyond competing. To seize new profit and growth opportunities they also need to create blue oceans

Red Ocean Vs Blue OceanRED OCEAN BLUE OCEANCompete in existing market Create uncompetitive marketBeat the competition Make competition irrelevantExploit the existing demand Create and capture new

demand Make value-cost demand Create value-cost trade offFirm strategies either low cost or differentiation

Firm strategies is both low cost and differentiation

*Red Ocean Strategy is the way that fights hard in existing market while Blue Ocean Strategy values innovation on getting new market

Creating Blue Ocean

VALUEINNOVATION

BUYERVALUE

COSTEliminat

e

Reduce

Create

Raise

Strategy Canvas – Casella Wines

High

Low Pric

eUse of

enological terminology

Above-the-line marketing Aging

quality

Vineyard prestige and

legacyWine

complexity

Wine range

Four Action Framework

A New Value Curve

Reduce•Which factor should be reduced well below industry standards?

Create•Which factors should be created that the industry has never offered?

Raise•Which factors should be raised well above the industry’s standard?

Eliminate•Which of the factors that the industry takes for granted should be eliminated?

Six Principles of Blue Ocean StrategyFormulatin

g Blue

Ocean Strategy

1s

t Principle:• R

econstruct Market Boundaries

2nd Principle:• F

ocus On the Big Pictures, Not the Numbers

3r

d Principle:• R

each Beyond Existing Demand

4t

h Principle:• G

et the Strategic Sequence RightExecutin

g Blue Ocean

Strategy

5th Principle:• Overco

me Key Organizational Hurdles

6th Principle:• Build

Execution into Strategy

Formulating Blue Ocean Strategy1s

t

P

r

i

n

c

i

p

l

e

Reconstruct Market Boundaries

Look Acros

s Alternative Industries

Look Across Strate

gic Groups within Industr

ies

Look Across the Chain

of Buyer

s

Look Across Complementary Product

& Service Offering

s

Look Across Functional or

Emotional

Appeal to

Buyers

Look Acro

ss Time

• Compare your business with competitor’s by drawing your strategy canvas.

• Change your strategy where needed.

• Go into the field to explore the 6 paths to

create Blue Ocean.• Observe distinctive

advantages of alternative products &

services.• See which factors

should eliminate, create or change.

• Draw “to-be” canvas based on insights from field

observations.• Get feedback on

alternative strategy canvases from customers,

competitors’ customers, and noncustomers.

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

strategy.

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

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Visual Awakening

Visual Exploration

Visual Strategy

Fair

Visual Communic

ation

2

n

d

P

r

i

n

c

i

p

l

e

Focus on the Big

Pictures, Not the

Numbers

Third Tier

First Tier

YourMarket

First Tier

“Soon-to-be”

noncustomer who are on the

edge of

the market, waiting to

jump

ship.

Second Tier

“Refusing” noncustomer who

consciously choos

e against the mark

et.

Third Tier

“Unexplored” noncustomers who are in the markets

distant.

3

r

d

P

r

i

n

c

i

p

l

e

Reach

Beyond Existing De

mand

• Is there exceptional buyer utility in your business?

Buyer Utility

YES

YES

YES

A Commerc

ially Viable Blue

Ocean Idea

YES

NO - Rethink NO - Rethink

NO - RethinkNO - Rethink

4

t

h

P

r

i

n

c

i

p

l

e

Get the Strategi

c Sequence Right

Executing Blue Ocean StrategyLet Managers experience it FIRST-HAND

Focus on HOT SPOT issues, search out COLD SPOT

JUMP THE

RESOURCES

HURDLES

Zoom on Kingpins

Put Kingpins into fishbowls• Transparency• Inclusion• Fair Process

JUMP THE

MOTIVATION

AL HURDL

ES

Leverage the ANGELs

Silence the DEVILs

KNOCK OVER POLITI

CAL HURDL

ES

5

t

h

P

r

i

n

c

i

p

l

e

Overcom

e Key Organizational Hurdles

Fair Process

Engagement

ExplanationExpectati

on Clarity

Create a culture oftrust and

commitment,the rest shall come

naturally.

6

t

h

P

r

i

n

c

i

p

l

e

Build

Execution

into Strategy

CONCLUSIONLESSON 1 •Be clear of elements that add-value. Keep useless elements that devalue will not bring any good. Reduce or eliminate them and reserve space to create and raise those which are more useful.

LESSON 2 •Focus on the things that is important. Do not always follow the crowd, stand alone and make hard decision which different from the norm. Walk you talk.

LESSON 3 •Sad truth! People will only appreciates when your effort adds value to their life.

LESSON 4 •Options that you have now is not necessarily the best, always look for alternatives and dare to challenge conventional wisdom.

LESSON 5 •Everything that happens, happens for reason. Look at things from different perspectives.

CONCLUSION

LESSON 6

•Push yourself to the limit and strive hard to achieve the goals. NO free lunch in this world and you shall get what you deserve based on your effort.

LESSON 7 •If you can't walk, you can't fly. Proper planning is always the most

crucial step.

LESSON 8 •Big problem often comes from small problems. Work backward by

breaking into smaller pieces while solving big problem

LESSON 9 •Focus on fair process, so the same principle applies in life. Be fair.

LESSON 10 •Renewal of Blue Ocean Strategy

LESSON LEARNT

To sustain in the industry, be CREATIVE and INNOVATIVE. Do things

DIFFERENTLY from the market with LOWEST COST possible.

In order to be DIFFERENT from competitors, you have to think OUT OF

THE BOX!

Get your TEAM to SHARE the same vision to achieve missions and objectives.