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Blue Ocean Strategy

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Blue Ocean Strategy

  1. 1. Blue Ocean Strategy Prepared By Hasibur Rahman
  2. 2. what is blue ocean strategy ? Blue ocean strategy is embodied by Professors W. Chan Kim and Renée Mauborgne in a book called Blue ocean strategy. It was published by Harvard Business School Press. Blue ocean strategy, is a result of study of decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years (1880-2000). The aim of Blue ocean strategy is not to out perform the competition in the existing industry, but to create new market space or a blue ocean. Blue ocean strategy offers systematic tools and frameworks to break away from the competition and create a blue ocean of uncontested market space.
  3. 3. Characteristics of BOS Focus A good strategy should have a strong focus, and a company’s strategic profile should clearly show it. Focus is all about execution of key factors that the organization has raised in its strategic canvas. Customers will have to feel the differentiation. Divergence The value curve of blue ocean strategy always stands apart from the competitors. Reactively formed strategies tries to keep up with the competition, thus loosing uniqueness. Divergence helps differentiating company from the industry’s average profile and helps them to achieve a
  4. 4. leap in value on strategy canvas, such as low-cost business model. It makes the company to stand apart from the rest. Compelling tagline A good strategy has a clear-cut and easy to communicate tagline. Unless the customers and employees aren’t informed about the strategy, it’s unlikely they would appreciate them. ‘Tagline’, a term that’s close to the heart of marketing folks is also evolved from the strategy canvas of the Blue Ocean Strategy. In simple words, it is a factor(s) which is newly created by the organization and not present in the competitors of the industry. Characteristics of BOS
  5. 5. Advantages & Disadvantages  It’s grounded in data.  Ignoring relevant competition.  It pursues differentiation and low cost.  Reinventing the wheel.  It creates uncontested market space.  Swimming too far.  It empowers through tools and frameworks.  No fish.  It provides a step by step process.  It maximizes opportunity while minimizing risk.  It builds execution into strategy.  It shows how to create a win-win outcome.
  6. 6. BOS Vs. ROS Blue Ocean Strategy Red Ocean Strategy Create uncontested market space. Compete in existing market space. Make the competition irrelevant. Beat the competition. Create and capture new demand. Exploit existing demand. Break the value-cost trade-off. Make the value-cost trade-off. Align the whole system of a firm’s activities in pursuit of differentiation and low cost. Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost.
  7. 7. BOS Tools
  8. 8. Sequence of BOS Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost, and adoption. This allows them to build a viable business model and ensure that a company profits from the blue ocean it is creating. Here Kim and Mauborgne articulate the strategic sequence of Blue Ocean Strategy and a commercially viable blue ocean idea.
  9. 9. The database and research have continued to expand and grow over the last ten years since the first edition of the book was published and the strategic moves studied depict similar patterns, whether blue oceans were created in for-profit industries, non-profit organizations, or the public sector. Here are a few brand examples of different industries and sectors whose are adapted blue ocean strategic moves. BOS Moves Globally
  10. 10. Canon’s strategic move, which created the personal desktop copier industry, is a classic example of blue ocean strategy. Traditional copy machine manufacturers targeted office purchasing managers, who wanted machines that were large, durable, fast, and required minimal maintenance. Defying the industry logic, the Japanese company Canon created a blue ocean of new market space by shifting the target customer of the copier industry from corporate purchasers to users. With their small, easy-to-use desktop copiers and printers Canon created new market space by BOS Moves of Canon
  11. 11. focusing on the key competitive factors that the mass of noncustomers – the secretaries that used copiers – wanted. By questioning conventional definitions of who can and should be the target buyer, companies can often see fundamentally new ways to unlock value. Path three of blue ocean strategy’s six paths framework pushes companies to look across the chain of buyers in their industry. By shifting focus to a previously overlooked set of buyers, companies can unlock new value and create uncontested market space. BOS Moves of Canon
  12. 12. Reference ► W. Chan Kim and Renée Mauborgne, Blue ocean strategy, Harvard Business School Press. ► www.blueoceanstrategy.com. ► www.nasscom.in, Blue ocean strategy presentation. ► www.studymarketing.org, Blue ocean strategy
  13. 13. Blue Ocean Strategy Q & A

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