blue occean tvp
TRANSCRIPT
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Blue Ocean Strategy Blue Ocean Strategy
Dr.Dr. TejashTejash PujaraPujara
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ContentsContents
1.1. Blue Ocean Vs. Red Ocean Strategy Blue Ocean Vs. Red Ocean Strategy
2.2. Blue Ocean Strategy ToolsBlue Ocean Strategy Tools
3. 3. Strategy Canvas and Four Action FrameworkStrategy Canvas and Four Action Framework
4.4. Six Principles of Blue Ocean Strategy Six Principles of Blue Ocean Strategy
5.5. Formulating Blue Ocean Strategy Formulating Blue Ocean Strategy
6.6. Executing Blue Ocean Strategy Executing Blue Ocean Strategy
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Blue Ocean Vs. Red OceanBlue Ocean Vs. Red OceanStrategy Strategy
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Blue Ocean vs. Red Ocean Strategy Blue Ocean vs. Red Ocean Strategy
Create uncontested
market space
Make the competition
irrelevant
Create and capture new
demand
Compete in existing
market space
Beat the competition
Exploit existing
demand
Blue Ocean Strategy Blue Ocean Strategy Red Ocean Strategy Red Ocean Strategy
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Blue Ocean vs. Red Ocean Strategy Blue Ocean vs. Red Ocean Strategy
Break the value- cost
trade off
Align the whole system
of a firms activities with
its strategic choice of
differentiation and lowcost
Make the value-cost
trade off
Align the whole system
of a firms activities with
its strategic choice of
differentiation or lowcost
Blue Ocean Strategy Blue Ocean Strategy Red Ocean Strategy Red Ocean Strategy
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Costs
Buyer Value
ValueInnovation
Value Inno vation Value Inno vation
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Blue Ocean Strategy ToolsBlue Ocean Strategy Tools
Strategy Strategy
CanvasCanvas
A diagnostic tooldiagnostic tool for building a compelling blue
ocean strategy
It captures the current stateof play current stateof play in the known
market space
Allow you to understand :
where the competition is currently
investing
the factors the industry currently
competes on in product, service and
delivery
what customers receive from existing
competitive offerings on the market
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Four Action FrameworkFour Action Framework
EliminateEliminate
ReduceReduce
RaiseRaise
CreateCreate
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Four Action FrameworkFour Action Framework
EliminateEliminate
ReduceReduce
RaiseRaise
CreateCreate
W hich of the factors that the industry takes for
granted should be eliminated?eliminated?
W hich factors should be reduced well belo wreduced well belo w the
industrys standard?
W hich factors should be createdcreated that the industry
has never offered?
W hich factors should be raised well abo veraised well abo ve the
industrys standard?
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C
ricket af
ter IPLC
ricket af
ter IPLHigh
Low
ReduceReduce
CreateCreateRaiseRaise
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Four Action Framework (IPL)Four Action Framework (IPL)
Frenchise
City Loyalty
Cheer Leaders
EliminateEliminate ReduceReduce
RaiseRaiseCreateCreate
Time
Classic
Reputation Patience
Pace
Result
Entertainment
Athleticism
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Six Principles of Blue Ocean Strategy Six Principles of Blue Ocean Strategy
1. Reconstruct market boundaries
2. Focus on the big picture, not the
numbers
3. Reach beyond existing demand
4. Get the strategic sequence right
5. O vercome key
organizational hurdles
6. Build execution into
strategy
Formulation PrinciplesFormulation Principles Execution PrinciplesExecution Principles
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FormulatingFormulatingBlue Ocean Strategy Blue Ocean Strategy
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1. Reconstruct Market Boundaries1. Reconstruct Market Boundaries
Focus on rivals within
industry Focuses on competitive
position within strategic
group
Focuses on better serving the
buyer group
HeadHead--toto--Head Strategy Head Strategy Blue Ocean Strategy Blue Ocean Strategy
Looks across alternative
industries Looks across strategic group
within industry
Redefines the industry buyer
group
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1. Reconstruct Market Boundaries1. Reconstruct Market Boundaries
Focuses on maximizing the
value of product or serviceofferings within the bounds of
its industry
Focuses on adapting to
external trends as they occur
HeadHead--toto--Head Strategy Head Strategy Blue Ocean Strategy Blue Ocean Strategy
Looks across to complementary
product and service offerings Participates in shaping external
trends over time
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2. Focus on the Big Picture, not the Numbers2. Focus on the Big Picture, not the Numbers
Focus on the BigBig
PicturePicture, not the
Numbers
The Four Steps of
Visualizing Strategy
Visual Awakening
Visual Exploration
Visual Strategy Fair
Visual Communication
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2. Focus on the Big Picture, not the Numbers2. Focus on the Big Picture, not the Numbers
Visual Visual
Awakening Awakening
Compare your business with your
competitors by drawing your as is
strategy canvas
See where your strategy needs tochange
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2. Focus on the Big Picture, not the Numbers2. Focus on the Big Picture, not the Numbers
Visual Visual
ExplorationExploration
Go to the field to explore the six paths
to creating blue oceans
Observe the distinctive advantages of
alternative products and services
See which factors you should
eliminate, create, or change
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2. Focus on the Big Picture, not the Numbers2. Focus on the Big Picture, not the Numbers
Visual
Strategy Fair
Draw your to be strategy 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
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2. Focus on the Big Picture, not the Numbers2. Focus on the Big Picture, not the Numbers
Visual
Communication
Distribute your before-and-after
strategic profiles on one page for easy
comparison
Support only those projects andoperational moves that allow your
company to close the gap to actualize
the new strategy
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3. 3. Reach Bey ond Existing DemandReach Bey ond Existing Demand
The ThreeThe Three
Tier of NonTier of Non--
customerscustomers
First tier: Soon to be nonSoon to be non--customerscustomers
who are the edge of your market, waiting to
jump ship
Second tier: Ref using nonRef using non--customerscustomers
who consciously choose against your
market
Third tier: Unexplored nonUnexplored non--customerscustomers who are in markets distant from yours
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Y ourMarket
FirstTier
Second
Tier
ThirdTier
Three Tiers of NoncustomersThree Tiers of Noncustomers
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4.4. Get The Strategic Sequence RightGet The Strategic Sequence Right
The Sequenceof Blue Ocean Strategy The Sequenceof Blue Ocean Strategy
Buyer utility Buyer utility
Is there exceptional buyer
utility in your business idea?
PricePrice
Is your price easily accessible
to the mass of buyers?
CostCost
Can you attain your cost
target to profit at yourstrategic price?
Adoption Adoption
W hat are the adoption
hurdles in actualizing your
business idea?
A commercially viable blue A commercially viable blue
ocean ideaocean idea
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Buyer Utility MapBuyer Utility Map
1.
Purchase
2.
Delivery
3.
Use
4.
Supplements
5.
Maintenance
6.
Disposal
CustomerProductivity
Simplicity
Convenience
Risk
Fun andImage
Environmentalf riendliness
The Six Stages of the Buyer Experience C ycle
T h
e S i x U t i l i t y L e v e r
s
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Buyer ExperienceC
ycleBuyer ExperienceC
ycle
Purchase Delivery Use Supplements Maintenance Disposal
How long does ittake to find theproduct youneed?
Is the place of purchaseattractive andaccessible?
How secure is the
transactionenvironment?
How rapidly can you make apurchase?
How long doesit take to getthe productdelivered?
How difficult isit to unpackand install thenew product?
Do buyers have
to arrangedelivery themselves? If yes, how costly and difficult isthis?
Does the productrequire training orexpert assistance?
Is the product easy tostore when not in use?
How effective are theproducts features andfunctions?
Does the product orservice deliver farmore power or optionsthan required by theaverage user? Is inovercharged with bellsand whistles?
Do you need otherproducts and servicesto make this product work?
If so, how costly arethey?
How much time dothey take?
How easy are they toobtain?
Does the productrequire externalmaintenance?
How easy is it tomaintain andupgrade the product?
How costly ismaintenance?
Does use of theproduct create waste items?
How easy is it todispose of theproduct?
Are there legalorenvironmental
issues indisposing of theproduct safely?
How costly isdisposal?
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Unco vering Blocks to Buyer Utility Unco vering Blocks to Buyer Utility
Purchase Delivery Use Supplements Maintenance Disposal
Customer Productivity: In which stage are the biggest blocks to customer productivity?
Simplicity: In which stages are the biggest blocks to simplicity?
Convenience: In which stage are the biggest blocks to convenience?
Risk: In which stage are the biggest blocks to reducing risks?
Fun and Image: In which stage are the biggest blocks to fun and image?
Environmental
Friendliness:
In which stage are the biggest blocks to environmental friendliness?
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ExecutingExecuting
Blue Ocean Strategy Blue Ocean Strategy
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5.5. Overcome Key Organizational HurdlesOvercome Key Organizational Hurdles
Overcome Key Overcome Key OrganizationalOrganizational
HurdlesHurdles
CognitiveCognitive
HurdleHurdle
MotivationalMotivational
HurdleHurdle
ResourceResource
HurdleHurdle
PoliticalPolitical
HurdleHurdle
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5.5. Overcome Key Organizational HurdlesOvercome Key Organizational Hurdles
CognitiveCognitive
Hurdle (statusHurdle (status
quo)quo)
ResourceResource
HurdleHurdle
Go to the Field
Meet with Disgruntled (dissatisfied) Customers
Redistribute resources to your hot spots
Redirect resources from your cold spots
Engage in horse trading
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5.5. Overcome Key Organizational HurdlesOvercome Key Organizational Hurdles
MotivationalMotivational
HurdleHurdle
PoliticalPolitical
HurdleHurdle
Zoom in on Kingpins (key influencers)
Place kingpins on a fishbowl (make their action
/ inaction transparent)
Atomize to get the organization to change itself
Secure a consigliere (trusted friend / aide) on
your top management team Leverage your angels and silence your devils
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5. Build Execution Into Strategy 5. Build Execution Into Strategy
Fair Process of Strategy Fair Process of Strategy
Strategy Formulation Process
Fair Process Engagement, Explanation, Expectation clarity
Attitudes
Trust and Commitment I feel my opinion counts
Behavior
Voluntary Cooperation Ill go beyond the call of duty
Strategy Execution
Exceeds Expectation self initiated
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Source of Ref erenceSourceof Ref erence
W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy, HBS
Publication