Blue Ocean Strategy

1. Blue Ocean Strategy
Making the Competition Irrelevant
A Presentation for the
Ateneo Graduate School of Business: Regis Program
Entrepreneurship Class
Prepared by: Mildred D. Reyes II

2. blue ocean strategy What is BOS?
What is BOS? A SNAPSHOT OF BOS
Strategy is embodied by Professors W. Chan Kim and Renee Mauborgne in a
book called, Blue Ocean Strategy. It was published by Harvard Business School
Pres.
BOS is the result of a decade-long study of 150 strategic moves spanning more
than 30 industries over 100 years (1880-2000).
The aim of BOS is not to out-perform the competition in the existing industry,
but to create new market space or a blue ocean.
BOS offers systematic and reproducible methodologies and processes in
quest of blue oceans by both new and existing firms.
BOS has introduced a number of practical tools, methodologies and frameworks to
formulate and execute blue ocean strategies.

3. blue ocean strategy What is BOS?
What is BOS? Red Ocean versus Blue Ocean
RED OCEAN BLUE OCEAN
• Compete in existing market • Created uncontested market
space. space.
• Beat the competition. • Make the competition irrelevant.
• Exploit existing demand. • Create and capture new
• Make the value-trade cost-off. demand.
• Align the whole system of a • Break the value-cost trade-off.
firm’s activities with its strategic • Align the whole system of a firm’s
choice of differentiation or low activities with its strategic choice
cost. of differentiation and low cost.

4. blue ocean strategy What is BOS?
What is BOS? Conceptual Framework and Strategy Propositions
Conceptual Framework Strategy Propositions
•Value Innovation •Value Proposition
•Tipping Point Leadership •Profit Proposition
•Fair Process •People Proposition

5. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools Value Innovation
•.
Eliminate Costs
•.
Reduce
VI Value Innovation
•.
Raise
•.
Create Value

6. blue ocean strategy Part Two
BOS Strategy Tools Three Strategy Tools
Blue Ocean Strategy Tools
Strategy Canvas
Four Actions Framework
Six Principles

7. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools Strategy Canvas

8. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools The Strategy Canvas of Cirque du Soleil
hi
Ringling Brothers
Cirque du Soleil
offering level
Smaller Regional Circus
lo Multiple
Animal Shows Multiple Show Thrills & Danger Theme
Price Productions
Arenas
Star Performers Aisle Concessions Fun & Humor Unique Venue Refined Viewing Artistic Music
Environment & Dance

9. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools Four Action Framework
REDUCE
Which factors should be
reduced well below
the industry’s standards?
ELIMINATE A New CREATE
Which of the factors that Which factors should be
the industry take for granted Value created that the industry
has never offered?
should be eliminated? Curve
RAISE
Which factors should be
raised well above
the industry’s standard?

10. blue ocean strategy Blue Ocean Strategy Tools
Four Action Framework The Case of Cirque de Soleil (A Circus Company)
ELIMINATE REDUCE
• Star performers • Fun and humor
• Animal shows • Thrill and danger
• Aisle concession sales
• Multiple show arenas
CREATE RAISE
• Theme • Unique venue
• Refined environment
• Multiple productions
• Artistic music and dance

11. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools Six Principles of Blue Ocean
Formulation Principles Formulation Risk
• Reconstruct market conditions • Search Risk
‘
• Focus on the big picture, not the numbers • Planning Risk
‘
• Reach beyond existing demand • Scale Risk
‘
• Get the strategic sequence right • Business Model Risk
‘
Formulation Principles Execution Risk
• Overcome key organizational hurdles • Organizational Risk
‘
• Build execution into strategy • Management Risk
‘

12. blue ocean strategy Blue Ocean Strategy Tools
BOS Strategy Tools Six Principles of Blue Ocean
Formulating Blue Ocean Strategy
The principles that drive the successful
formulation are reconstruct market
boundaries, focus on the big picture, not
numbers, reach beyond existing
Reconstruct market Focus on the big
demand, and get the strategic sequence
boundaries picture, not the
right. numbers
It identifies the paths by which you
systematically create uncontested
market space. Shows how to design a
company’s strategic planning process
go beyond incremental improvements.
Shows to maximize the size of the blue
ocean and lays out the design of a Reach beyond Get the strategic
strategy. existing demand sequence right

13. blue ocean strategy Six Principles of BOS
Formulating Blue Ocean Strategy Sequence of BOS

14. blue ocean strategy Blue Ocean Strategy Tools
Executing Blue Ocean Strategy Overcome Key Organizational Hurdles
COGNITIVE POLITICAL
MOTIVATIONAL RESOURCE

15. blue ocean strategy Six Principles of Blue Ocean Strategy
Executing Blue Ocean Strategy Tipping Point Leadership
 What factors or acts exercise a
disproportionately positive influence
on breaking the status quo?
 On getting the maximum bang our
of each buck of resource?
 On motivating key players to
aggressively move forward with
change?
 And on knocking down political
roadblocks that often trip up even the
best strategies?

16. blue ocean strategy Six Principles of Blue Ocean Strategy
Executing Blue Ocean Strategy Build Execution into Strategy
Fair Process of Strategy
Strategy Formulation Process (3Es)
Fair Process – Engagement, Explanation,
Expectation clarity
Attitudes
Trust and Commitment – “I feel my opinions counts”
Behavior
Voluntary Cooperation – “I’ll go beyond the call of
duty”
Strategy Execution
Exceeds Expectation – self initiated

17. blue ocean strategy Conclusion
Conclusion Advantages
Advantages
Sets standards
High profit margin in a new market
A blue ocean strategic move can create
brand equity that could last for decades

18. blue ocean strategy Conclusion
Conclusion Disadvantages
Disadvantages
Intermediate strategy
Eventually becomes red ocean
If frameworks are not properly executed, it
promotes market complacency

19. blue ocean strategy
References
• W. Chan Kim, Renée Mauborgne, Blue Ocean Strategy, 2005,
Havard Business School Press.
• http://www.blueoceanstrategy.com
•www.nasscom.in, Blue Ocean Strategy Presentation
•www.studyMARKETING.org, Blue Ocean Strategy

20. The End
Special thanks to Jenn Garces and Kristin Gonzales

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