1.
BLUE OCEAN STRATEGY
Jonathan Tan
November 21, 2019

2.
BLUE OCEAN STRATEGY
• WHAT ARE RED OCEANS AND BLUE OCEANS?
• What is a Blue Ocean Strategy
• BLUE OCEAN STRATEGY & SHIFT TOOLS
• Value Innovation
• Strategy Canvas
• Four Actions Framework -ERRC Grid
• Six Paths Framework
• Pioneer Migrator Settler Map
• Three Tiers of Noncustomers
• Sequence of Creating a Blue Ocean
• Buyer Utility Map
• Price Corridor of the Mass
• Four Hurdles to Strategy Execution
• Tipping Point Leadership
• Fair Process
• Sequence of Blue Ocean Strategy
• Three Key Components Of A Successful Blue Ocean Shift
• How To Put Blue Ocean Leadership Into Practice?

3.
WHAT ARE RED OCEANS AND BLUE OCEANS?
• Red oceans are all the industries in existence today
• Blue oceans, in contrast, denote all the industries not
in existence today – the unknown market space,
untainted by competition.
In their classic book, Blue Ocean Strategy, W. Chan Kim & Renée Mauborgne coined the
terms ’red ocean’ and ‘blue ocean’ to describe the market universe.

4.
WHAT IS BLUE OCEAN STRATEGY?
• Blue ocean strategy is the simultaneous pursuit of
differentiation and low cost to open-up a new market space
and create new demand.
• It is about creating and capturing uncontested market space,
thereby making the competition irrelevant.
• It is based on the view that market boundaries and industry
structure are not a given and can be reconstructed by the
actions and beliefs of industry players.

5.
RED OCEAN VS. BLUE OCEAN STRATEGY

6.
BLUE OCEAN STRATEGY & SHIFT
TOOLS1. Value Innovation
2. Strategy Canvas
3. Four Actions Framework (ERRC Grid)
4. Six Paths Framework
5. Pioneer Migrator Settler Map
6. Three Tiers of Noncustomers
7. Sequence of Creating a Blue Ocean
8. Buyer Utility Map
9. Price Corridor of the Mass
10.Four Hurdles to Strategy Execution
11.Tipping Point Leadership
12.Fair Process
13.Sequence of Blue Ocean Strategy

7.
Cost savings are made by eliminating
and reducing the factors an industry
competes on.
Buyer value is lifted by raising and
creating elements the industry has never
offered.
1. VALUE INNOVATION

8.
Break the value-cost trade-off by answering the following
questions:
•Which of the factors that the industry takes for granted
should be eliminated?
•Which factors should be reduced well below the industry’s
standard?
•What factors should be raised well above the industry’s
standard?
•What factors should be created that the industry has never
offered?
VALUE INNOVATION

9.
2. STRATEGY CANVAS

10.
The Strategy Canvas serves two purposes:
1. It captures the current state of play in the known market
space, which allows users to clearly see the factors that an
industry competes on and invests in, what buyers receive,
and what the strategic profiles of the major players are.
2. It propels users to action by reorienting their focus
from competitors to alternatives and
from customers to noncustomers of the industry and allows
you to visualize how a blue ocean strategic move breaks
away from the existing red ocean reality.

11.
3. FOUR ACTIONS FRAMEWORK (ERRC GRID)

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5. SIX PATHS FRAMEWORK

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6. PIONEER-MIGRATOR-SETTLER (PMS) MAP

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7. THREE TIERS OF NONCUSTOMERS

15.
8. SEQUENCE OF BLUE OCEAN STRATEGY

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9. BUYER UTILITY MAP

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10. THE PRICE CORRIDOR OF THE MASS

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11. FOUR HURDLES TO STRATEGY EXECUTIO

19.
To varying degrees, companies may face four types of hurdles to strategy
execution. Knowing how to triumph over these organizational hurdles is key to
successful strategy execution. W. Chan Kim and Renée Mauborgne identified
four key hurdles to strategy execution:
1. The Cognitive Hurdle: Waking employees up to the need for a strategic
shift. Red oceans may not be the paths to future profitable growth, but they
may have served the organization well historically, so why rock the boat?
2. The Resource Hurdle: It is assumed that the greater the shift in strategy,
the greater the resources it requires for execution.
3. The Motivational Hurdle: How do you motivate key players to move fast
and tenaciously to carry out a break from the status quo?
4. The Political Hurdle: As one manager put it, “In our organization you get
shot down before you stand up.”
FOUR HURDLES TO STRATEGY EXECUTION

20.
Tipping Point
Leadership
To achieve a strategic shift at low cost, focus on the
extremes – the people, acts, and activities that exert a
disproportionate influence on performance.
Conventional Wisdom The theory of organizational change rests on
transforming the mass and these efforts require steep
resources and long timeframes.
12. TIPPING POINT LEADERSHIP

21.
By single-mindedly focusing on points of disproportionate
influence, tipping point leadership helps managers topple the four
hurdles to strategy execution quickly and at a low cost by
answering the following questions:
1. What factors or acts exercise a disproportionately positive
influence on breaking the status quo?
2. On getting the maximum bang out of each buck of resources?
3. On motivating key players to aggressively move forward with
change?
4. And on knocking down political roadblocks that often trip up
even the best strategies?
TIPPING POINT LEADERSHIP

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13. FAIR PROCESS

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14. SEQUENCE OF BLUE OCEAN STRATEGY

24.
A blue ocean shift means moving yourself, your
team and your organization from cutthroat markets
to wide-open new markets in a way that your
people own and drive the process.
HOW TO SHIFT FROM RED TO BLUE
OCEANS?

25.
THREE KEY COMPONENTS OF A SUCCESSFUL
BLUE OCEAN SHIFT
PERSPECTIVE
The mindset of a blue ocean
strategist
ROADMAP
Market-creating tools and process
along with clear guidance on how
to apply them
CONFIDENCE
Humanness that builds people’s
confidence at every level to drive
and own the process

26.
A blue ocean is
created by opening a
new value-cost frontier
that is a leap beyond
the existing industry
productivity curve. It
makes competition on
the existing frontier
irrelevant.

27.
Focus on the values, qualities and behavioral styles Focus on acts and activities leaders need to undertake
Detached from market results people are expected to
achieve
Leaders’ actions closely connected to market realities
Focus mostly on the executive and senior levels Distribute leadership across three management levels
Extra time required for leadership practices High impact leadership acts and activities at low cost
CONVENTIONAL LEADERSHIP
DEVELOPMENT APPROACHES
BLUE OCEAN
LEADERSHIP
vs

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HOW TO PUT BLUE OCEAN LEADERSHIP
INTO PRACTICE?
•FOLLOW THE FOUR-STEP PROCESS
TO CONVERT NONCUSTOMERS INTO
CUSTOMERS OF YOUR LEADERSHIP

29.
Blue Ocean SaaS Example
vs

30.
Q & A

31.
Thank you!
Jonathan Tan