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about winning without fighting
Blue Ocean Strategy
to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting
Master Sun Tzu in Art of War
Conventional StrategyDIFFERENTIATION OR LOW COST
Blue Ocean talks about Value InnovationDIFFERENTIATION AND LOW COST
BLUE OCEAN STRATEGY
Value Innovation Region where a companys actions favourably affect both its cost structure and its value proportion to buyers Cost savings by eliminating and reducing the factors an industry competes on Buyer values is lifted by raising & creating elements the industry has never offered Over time, costs are reduced further as scale economies kick in
Costs
Value Innovation
Buyer Value
Comparison of Red vs. BlueConventional or Red Ocean Compete in existing market space Beat the competition Blue Ocean Create a new market space Make competition irrelevant
Exploit current demand Make the value cost trade-offFight to win
Create and capture new demand Break the value cost trade-offWin without fighting
How to find new Value CurveFour Actions Framework Eliminate Which of the factors that the industry takes for granted should be eliminated?
Reduce Which factors should be reduced well below the industry's standard?
Raise Which factors should be raised well above the industry's standard?
Create Which factors should be created that the industry has never offered?
Case Study 1 : US Wine Industry Pre-Yellow TailHigh
Low
Budget Wines Premium Wines
Case Study 1: US Wine Industry Post Yellow TailHigh
Budget Wines Premium Wines
Low
Yellow Tail
Case Study 1 : Value Curve for Yellow Tail Eliminate Enological Terminology Above the Line Focus on Aging Quality
Reduce Vineyard Prestige & Legacy Wine Complexity Wine Range
Raise Price as compared to Budget Retail Store Environment
Create Easy Drinking Ease of Selection Fun & Adventure
Case Study 2 : US Women Exercise Pre CurvesHigh
Traditional Gym Home Exercise
Low
Case Study 2: US Women Exercise Post CurvesHigh
Traditional GymHome Exercise Curves Low
Case Study 2 : Value Curve for Curves Reduce When compared to traditional gym Price Amenities Equipment Workout time Availability of instructors
Raise Environment encouraging discipline & motivation Same sex non-threatening
Create Womanly fun atmosphere
Case Study 3 : Cricket Before IPLHigh
Test Cricket
Low
One Day
Case Study 3: Cricket After IPLHigh
LowTest Cricket One Day 20-20
Case Study 3 : Value Curve for IPL Reduce Spectator Time Invested (Competes with Movie/Football) Emphasis on Classic Techniques (Batting/Bowling) Emphasis on Patience, Perseverance
Raise Emphasis on Athleticism Pace of the Game Entertainment with Bollywood, Cheerleaders etc. Certainty of Result
Create City Loyalty Welcome to Dummies
Is Tata Nano Really Creating a Blue Ocean ?HighSmall Car
Nano2 Wheeler
Low
skillful leader subdues the enemy's troops without any fighting; he captures their cities without laying siege to them; he overthrows their kingdom without lengthy operations in the field Master Sun Tzu in Art of War
Reference : Blue Ocean Strategy By W. Chan Kim, Rene Mauborgne