When these four questions are answered, you will then be able to come up with a new value curve to unlock your companys very own blue ocean. How to create blue oceans using value curves arif harbott. Kim and mauborgne proposed a fouractions framework to reconstruct buyer value elements in order to craft a new value curve. It was expanded upon in their bestselling 2005 book, blue ocean strategy.
It will show you what it takes to shift from bloody competition to new markets. Blue ocean strategy powerpoint templates present better. If you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. The objective of blue ocean strategy is to make competition irrelevant by creating a new value curve for both customers and the company itself. Specifically, it aims at drawing new value curves for avs over tradvs when considering avs as a service and as a product. The strategy canvas is a central diagnostic tool and an action framework of blue. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy comes with the promise of an absolute shift in how you will think about business and just delivers some new interesting frameworks to add to your toolkit. May 31, 2016 instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines. Apr 03, 2010 value innovation the cornerstone of bos value innovation places equal emphasis on value and innovation. Create a blue ocean strategy by ensuring the strategy canvas from step 3 is. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy.
Blue ocean strategy chapter 14 the four action framework chapter two. Blue ocean strategy this new thinking makes it possible for innovative entrepreneurs to increase their chances for. Casella wines used the blue ocean strategy to explore and create new uncontested market space. Strategy canvas excel template blue ocean strategy subject. The example below is for polo ralph lauren tshirts. The only way to beat the competition is to stop trying to beat the competition. In the international bestseller blue ocean strategy, w. They urge companies to value innovation that focuses on utility, price, and cost positions, to create and capture new demand and to focus on the big picture. While lean six sigma is great for optimizing existing processes, it can sometimes inhibit the development of new products and markets.
Blue ocean strategy is a book published in 2005 and written by w. Canon copier industry case study blue ocean strategy example. Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean. Blue ocean strategy, expanded edition and millions of other books are available. Rethinks the functionalemotional orientation of its industry six paths focus on the big picture path 6. If you continue browsing the site, you agree to the use of cookies on this website. Apple observed the flood of illegal music file sharing that began in the late 1990s, enabled by file sharing programs such as napster, kazaa, and limewire. The value curve model can be used to instantly show where the aspect of. Ive been quoted for saying that strategies are dead. But in most cases, a blue ocean is created from within a red ocean when a company alters the existing industry boundaries. Case study, information systems, blue ocean strategy, thirdparty logistics, rfid, radio frequency. Value innovation is a new way of thinking about and executing strategy that.
Eliminate decide which factors taken for granted by the industry should be eliminated. A value curve is a diagram which can be used to show instantly where value is created within an organizations products and services. Chan kim and renee mauborgne heres the strategy create new markets. It requires the right research, patience and focus. A red ocean strategy involves competing in industries that are.
The eliminatereduceraisecreate errc grid developed by w. The strategy canvas is both the start and the end point of a blue ocean strategy formulation. Summary capter 1 4 of blue ocean strategy by lauri di vino. In blue ocean strategy, the authors use strategy canvas to analyze the competitive environment of the market. Application in universiti sains malaysia library blue oceans recommend a new space in which market boundaries and industry structure are not given and can be reconstructed and it is a time for setting a new strategy before which all other strategies fall within the realm of the red ocean strategy figure 1. Jul 16, 2014 top 10 management models for your business. These four questions can be converted into the strategy canvas level of value proposition v. We believe that blue ocean strategy will send you on the right path towards creating your own uncontested space. Chan kim and renee mauborgne, professors at insead. Chan kim and renee mauborgne is a simple matrix like tool that drives companies to focus simultaneously on eliminating and reducing, as well as raising and creating while unlocking a new blue ocean. The resulting value curve shows a focused effort that diverges from existing market offerings. To start thinking outside of the box, you might want to create a blue ocean strategy. Blue ocean strategy and new business models in the food.
Discovering a value innovation blue ocean idea book. Blue ocean strategy of apple from ipod to ipad presented by manu balaji kowshik mayur 2. Look across time blue ocean strategy all industries are affected by external trends over time blue ocean strategies are. The framework incorporates the actions described below. A diagnostic and an action framework for building a compelling blue ocean strategy. Companies can create a blue ocean strategy with the new supply chain management. Value innovation is the alliance of innovation with price, utility, and cost positions. It is then transformed via the eliminatereduceraisecreate actions framework. Eliminate factors that the industry takes for granted. Do you have a blue ocean sales and marketing strategy. Nov 14, 2008 blue ocean strategy is a value innovation strategic move that opens up new uncontested market, creates new demand, makes the competition irrelevant and helps a company to generate more revenue than competitors that focus narrowly on the existing crowded market. The risks of following a blue ocean strategy the adaptive.
They are far behind the new supply chain paradigm that gives rise to blue ocean strategy. Blue ocean strategy is a powerful framework for finding new business opportunities. Chan kim and renee mauborgne the theory is pledging for the creation of a new market space, the blue ocean, as a main technique for the realization of a significant and profitable growth of the company. They urge companies to value innovation that focuses on utility, price, and cost. I believe it, of course, but thats no excuse for not knowing how your blog stands out from the competition. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute.
It is drawn by plotting the companies offering relative to other alternatives based on key success factors in the industry. The concept was further expanded in their bestselling book of 2005, blue ocean strategy. For that there is nothing better than something called the blue ocean strategy. The four actions framework, depicted in figure 2 for cloudera, is used to reconstruct buyer value elements in crafting a new value curve in pursuit of a blue ocean strategy. Heres an example value curve for just the moto x smartphone. Theeffect of blue ocean strategyon increasing competitive. With all these four actions framework the company can escape the transitional red ocean market by activate a new blue ocean market and create a new value curve. Curves fitness industry case study blue ocean strategy. Blue ocean strategy, expanded edition how to create uncontested market space and make the competition irrelevant by w. Blue ocean strategy ch 2 analytical tools and frameworks. An introduction to blue ocean strategy mba knowledge base. Kim and renee mauborgne, blue ocean strategy suggests an organisation should look to create a new demand in an uncontested market space. Value innovation is the backbone of a blue ocean strategy. The first step in evaluating your current investments and competitive positioning your value curve is to use a strategic canvas.
Below is a summarized strategy canvas for the smartphone example. Further the blue ocean strategy aims to create new best practice rule by breaking the existing value cost trade off. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. Instead, these enterprises are moving closer to competitive black holes. Blue ocean that makes the current competition irrelevant. You can discover how much you know about it, including why it was first considered confrontational, by using the quiz. The value curve is a graphic depiction of the way a company configures its offering to customers. The economist a great read for any leader looking to get a real edge in business and establish a real competitive advantage in the market. Blue ocean strategy states that an organization can produce higher growth and profits by creating new demand in an uncontested market space than by competing headtohead with other suppliers for known customers in an existing industry.
These companies lack supply chain value innovations for customers. The key to discovering a new value curve lies in asking four basic questions how do you discover new value curves. While red ocean strategy is a constant struggle between differentiation development and marketing and cost, blue ocean strategy seeks to align differentiation and cost by finding a new value paradigm. It pushes companies not only to ask the questions posed in the four actions framework but also to act on all four to create a new value curve or strategic. Its about creating new marketing instead of competing in existing ones to stand apart yet keep costs low. Blue ocean strategy, expanded edition 9781625274496. Blue ocean strategy including examples and pdf download. With the launch of itunes, apple unlocked a blue ocean of new market space in digital music that it has now dominated for more than a decade. Learn to create a new value curve using the eliminatereduceraisecreate grid.
Blue ocean strategy bos is a new way of thinking a new strategic mindset a bold, new path to winning to future. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. The core bostools are the strategic canvas with old and new value curve, six searching paths framework, fouractionsframework and sequence of blue ocean strategy. How to create uncontested market space and make the competition irrelevant, w. Written by the business worlds new gurus, blue ocean strategy continues to. Based on a study of 150 strategic moves spanning more than 100 years across 30 industries, the authors argue that lasting success comes not from battling competitors but from creating blue oceansuntapped new market spaces ripe for growth. It eventually creates new value demand for consumers and thereby, expands the chances of growth potential. With the aid of the four actions framework figure 4 and the eliminatereduceraisecreate grid, a new value curve can be drawn within the strategy canvas that breaks away from the industry value curve thereby creating a blue ocean. The idea that competitors are fighting in a red sea of blood while there is always a blue ocean of opportunity is very a powerful visual idea that most readers could feel. A third tool, the eliminatereduceraisecreate grid, pushes firms to act on all four questions posed by the four actions framework and to create a new value curve. Note that while drawing a new value curve, both differentiation and low cost have been taking into account. Here are my 5 best tools to find your own blue ocean strategy.
Yeah so reading this book was quite a pleasure as the new thinking it provides to the reader. Be the first to ask a question about blue ocean strategy, expanded edition. Welcome to blue ocean strategy were thrilled to have you on board. Principles of marketing blue ocean strategy 07 free download as powerpoint presentation. Captures current state of play in the known market space horizontal axis. Sometimes companies can create totally new industries, as ebay did with the online auction industry.
Blue ocean strategy how to create uncontested market space. The value curve shows graphically the way the company or the industry configures its consumer offering. Blue ocean strategy is a strategy that challenges the firms to foresee beyond competition by creating new uncontested market space i. It is thus a powerful tool to create new market spaces blue ocean strategy. Clearly it is rarely possible to operate in the blue ocean alone, red ocean is a fact of business life. Learn vocabulary, terms, and more with flashcards, games, and other study tools. After having dealt with the blue ocean metaphor as well as having clarified the concept of value innovation, the chapter moves on by describing the basic analytical tools and frameworks that characterize the blue ocean strategy. Blue ocean strategy enables a fundamental transformation in mindset. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Blue ocean strategy, fastmovingconsumer goods, key success factors, value. Such analysis forms the basis of nike nutritions strategy within the sports nutrition market, allowing the company to identify a new value cureve, that will allow for the construction of effective blue ocean strategy. Strategy canvas from blue ocean strategy shortform blog. Principles of marketing blue ocean strategy 07 strategic. Companies pursue blue ocean strategies to make competition irrelevant.
A blue ocean strategy differs from a lowcost strategy in that a. Blue ocean strategy pursues differentiation while lowers cost. Is it possible to apply blue ocean strategy for tourism. The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. Product shelf life how long the product will stay edible and fresh for the retailer or end customer. A red ocean is the normal competitive space where products with very similar features are competing mostly on price.
Chan kim and renee mauborgne focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. Creating new market space and value curves is critical in a demandstarved economy for both small and large companies. Blue ocean strategy is the most successful book on business masterplanning. Blue ocean strategy has helped numerous companies and organisations across the globe to create new market space and achieve pro. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. It shows how a new blue ocean strategy creates a unique value curve, focusing on values critical to customers at the expense of lessimportant factors. Summary capter 1 4 of blue ocean strategy by lauri di. When expressed through a value curve, an effective blue ocean strategy has three complementary qualities.
Save up to 80% by choosing the etextbook option for isbn. The core bostools are the strategic canvas with old and new value curve, six searching. How to create uncontested market space and make the competition irrelevant at. This will be a re read and reference book on the shelf. To seize new profit and growth opportunities, they also need to create blue oceans. Blue ocean strategy lays out a case for innovation focused on finding a new non crowded competitive space or blue ocean. Applying blue ocean strategy to digital marketing smart. Blue ocean strategys four actions framework poses four central questions that. Blue ocean strategy curves by mariana vieyra on prezi. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. The value curve model visualises products comparisons which, in an increasingly competitive environment, helps product managers face the challenge of finding ways to differentiate their products click to tweet value curve case study. If there is value innovation, it will easily be found in the new curve and existing curves.
Blue ocean strategy how to create uncontested market space and make the competition irrelevant boston. But its not always clear how to create a blue ocean strategy for yourself. Strategy canvas excel template blue ocean strategy. This is an active strategy to avoid commoditization of goods and services. May 02, 2018 the blue ocean strategy represents a theory concerning the business strategy created by two professors namely w. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Mcdonalds using blue ocean strategy essay 479 words. Such strategic moves, which the authors call value innovation, create powerful leaps in value that often. An initial value curve depicts where the industry competes on and invests in. The creation of blue oceans is about driving costs down while simultaneously driving value up for buyers.
Blue ocean strategy, create new markets and leave the. Mcdonalds using blue ocean strategy mcdonalds is using blue ocean strategy bos. To create a blue ocean strategy, a company can create a strategy canvas to see what competitive factors exist, which ones are currently used in competition and. Free blue ocean strategy powerpoint templates now that youve done the hard work of identifying your blue ocean strategy, its time to present it to top management. The strategy canvas gets you to focus on bigpicture strategic items, rather than getting mired in numbers, spreadsheets, and incremental improvements. Theres also limited shelf space and vending spots, wellestablished brand recognition of popular, current brands, and many other factors that affect new competition. Maintaining profitable growth is only sustainable by creating and recreating new space, new markets and new value. Is it possible to apply blue ocean strategy for tourism businesses. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. A key component for value innovation and beneficial in the creation of blue oceans.
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