1. Blue Ocean StrategyBlue Ocean Strategy
VsVs
Red Ocean StrategyRed Ocean Strategy
How to Champion Success by CreatingHow to Champion Success by Creating
Uncontested Market OpportunitiesUncontested Market Opportunities
and Making Competition Irrelevantand Making Competition Irrelevant
ByBy
Anshumali Saxena March 2013Anshumali Saxena March 2013
Marketing Change Agent @ Marketing MessiahsMarketing Change Agent @ Marketing Messiahs

2. Age of Disruptive Discontinuity
In an “age of disruptive
discontinuity,” as Drucker called
the current era, entrepreneurs can
find significant growth
opportunities to create or
transform organizations if they
were willing to get ahead of
societal changes i.e. lead the
change.
2

3. Age of Disrputive DiscontinuityDrucker said that the best way to predict the future is to
invent it.
Discontinuities provided gaps in society that could be filled
with creativity.
Innovators should be
attuned to unmet needs
that did not yet show up
in market research.
3

4. Infra/super-structure
4

5. Blue Ocean Strategy
Is about winning without fighting
To fight & conquer in all your battles is not supreme
excellence; supreme excellence consists in breaking
the enemy's resistance without fighting.
A skilful leader subdues 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 - Sun Tzu in ‘ Art of War’

6. BLUE OCEAN STRATEGY IS A TIDAL WAVE THAT CHANGES
MARKET DYNAMICS FOREVER & TILTS BALANCE OF MARKET
POWER IN FAVOUR OF VALUE-INNOVATION LED GAME-CHANGER
Conventional Strategy
DIFFERENTIATION OR LOW COST
Blue Ocean talks about Value Innovation driven
DIFFERENTIATION AND LOW COST

7. A Bolt from the Blue! BLUE OCEANS’ Strategy
success-story- Inspired our Kingdom of Dreams

A one time accordion player, stilt – walker, and
fire – eater, Guy Laliberte is now CEO of
CIRQUE DU SOLEIL, one of Canada’s largest
cultural exports. Created in 1984 by a group of
street performers in less than 20 years.
CIRQUE DU SOLEIL has achieved a level of
revenues that took RINGLING BROS. and
BARNUN & BAILEY – the Global Champion of
the circus industry – more than 100 years to
attain.

To achieve stellar success through Blue
Ocean Strategy you don’t need big bang
credentials but an uncommon approach to tap
common sense driven latent customer
aspirations to create the Big Bang a wow-
success-wave

8. Remarkable, rapid growth in a Declining
Market given up for Dead
It was not achieved in an attractive industry but rather in a declining industry
in which traditional strategic analysis pointed to limited potential for growth.
Alternative forms of entertainment- ranging from various kinds of urban live
entertainment to sporting events to home entertainment-cast an increasingly
long shadow.
All you need to succeed is a lifelong passion of your parent industry and an
ocean of undiluted and unconquerable optimism that motivates you and your
core team

9. Another compelling aspect of CIRQUE DU
SOLEIL’s success is it did not win by
taking customers from the already
shrinking circus industry.
Instead it created uncontested new market
space or they called BLUE OCEANS that
made the competition irrelevant. One of
the 1st CIRQUE Productions was titled
“We reinvent the circus”.
“The only way to beat the competition is to
stop trying to beat the competition.”
Blue Ocean Strategy’ Success Mantra: Nothing’s
Impossible in front of Human Ingenuity

10. 2 Players of Market Universe_ Red Ocean Practioners &
Blue Ocean Innovators:
1. Red Oceans

all the industries in the known market space.

industry boundaries are defined and accepted.

companies try to outperform their rivals to grab a
greater share of existing demand.

market space gets crowded, prospects for profits
and growth are reduced.

products become ordinary commodities with
cutthroat competition turning red oceans bloody.
Example: PC industry prior to iPADs

11. 2. Blue Oceans
 untapped market space
 demand creation and
opportunity for highly
profitable growth
 competition is irrelevant
 uncharted

12. Blue Oceans - a feature of Business life, past & present
100 years ago
Automobiles
Music recording
Aviation
Petrochemicals
Organised Health care
Management consulting
Recent Past
MFOs for HNI Wealth
Smart phones
DTH
Biotechnology
Penny auction sites
Movie multiplexes

13. Industries never stand still. They continuously evolve. Operations
improve, market expand and players come and go.
History teaches us that we have a hugely underestimated capacity
to create new industries and re-create existing ones.
Yet the overriding focus of strategic thinking has been on
competition-based tried markets & existing business strategies.
Corporate strategy is heavily influenced by its roots in military
strategy.
Strategy is about confronting an opponent and fighting over a
given piece of land that is both limited and constant.
The Business Landscape Change Is A Global Reality

14. Accelerated technological advances have substantially
improved industrial productivity and have allowed suppliers
to produce an unprecedented array of innovative products &
services.
The result is that in many industries, supply exceeds demand.
The trend toward globalization compounds the situation.
Trade barriers between nations &regions are dismantled as
information on products and prices becomes instantly &
globally available, niche markets and havens for monopoly
continue to disappear.
Blue Ocean Imperative For Creating Wow-Successes

15. Blue Ocean strategy driven Theory of Increasing
Returns increasingly replacing Theory of Diminishing
Returns.
No permanent winners who can monopolize success
despite their massive economic muscle and
seemingly invincible status.
Google upstaging Microsoft, Facebook upstaging
Google
Game-changers Create Great Value in Business Eco-System

16. it shows that the strategic move and not the company of the industry, is the
right unit of analysis for explaining the creation of blue oceans and sustained
high performance.
Strategic move is the set of managerial actions and decisions involved in
making a major market – creating business offering.
Compaq, for example was acquired by Hewlett – Packard in 2001 and ceased
to be an independent company. As a result, many people might judge the
company as unsuccessful. This does not, however, invalidate the blue ocean
strategic moves that Compaq made in creating the server industry.
Human enterprise & not business segment
characteristics that drive breakthrough successes

17. Industry ranged from hotels, cinema, retail, airlines, energy,
computers, broadcasting and construction to automobiles and steel.
We analyzed not only winning business players who created blue
oceans but also their less successful competitors.
The creators of blue oceans, surprisingly didn’t use competition as
their benchmark. Instead they followed a different strategic logic
-value innovation. Value innovation is the cornerstone of blue
ocean strategy. We call it value innovation because instead of
focusing on beating the competition, you focus on marking the
competition irrelevant by creating a new benchmark n value for
buyers and your own company.

18. Value innovation: Cornerstone of Blue Ocean Strategy
Value innovation is created in the region where a company’s actions favorably
affect both its cost structure and its value proposition to buyers.
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. Overtime, costs are reduced further as scale economies kick in due to
the high sales volumes that superior value generates.

19. DISRUPTIVE
INNOVATION MODELS
19

20. A
B
20

21. Incumbent
Dynamic DI Model
21

22. Non-consum
ers
New market disruption
Sustaining strategy
Low-end disruption
Performance
Performance
Time
Time
22

23. SHAPING IDEAS TO
BECOME DISRUPTIVE
(HOW TO BEAT OUR
MOST POWERFUL
COMPETITORS)
23

24. Explore whether the idea can
become a new market disruption
• Is there a large population of people who
historically have not had the money,
equipment, or skill to do this thing for
themselves, and
• as a result have gone without it altogether
or have needed to pay someone with more
expertise to do it for them?
24

25. Explores the potential for a low-
end disruption
• Are there customers at the low end of the
market who would be happy to purchase a
product with less (but good enough)
performance if they could get it at a lower
price?
• Can we create a business model that enables
us to earn attractive profits at the discount
prices required to win the business of these
over-served customers at the low end?
25

26. Is the innovation disruptive to all of the
significant incumbent firms in the industry?

If it (the innovation) appears to be sustaining to one or more
significant players in the industry, then the odds will be
stacked in that firm’s favor, and the entrant is unlikely to
win.
26

27. COMPETING
AGAINST NON-
CONSUMERS
27

28. Competing Against Non-
consumption

The logic of competing against non-consumption
as the means for creating new-growth markets
seems obvious.

Despite this, established companies repeatedly do
just the opposite.
28

29. What Makes Competing Against
Non-consumption So Hard?

Not see disruption coming in. Even if,

Threat rigidity - Threat elicits more intense and
energetic response than opportunity, and then
focus on countering the threat to survive.
29

30. How to Avoid Hard Non-
Consumption Competition

First, get top-level commitment by framing a threat
as an innovation during the resource allocation
process.
ex. Newspapers embraced online editions to give
existing customers additional choice
30

31. How to Avoid Hard Non-
Consumption Competition

Later, shift responsibility for the project to an
autonomous organization that can frame it as an
opportunity.
ex. Place the responsibility to commercialize the
disruption in an independent unit for which the
innovation represents pure opportunity –
newspaper’s online group
31

32. Immelt’s CEO GE approach

Shift power to where the growth is.

Build new offerings from the ground up.

Customize objectives, targets, and metrics.

Build the DI unit from the ground up, like new
companies.

Have the DI unit report to someone high in the
organization.
32

33. Value
innovation
Buyer Value
Cost
Whole system approach makes success of blue oceans
sustainable.
In contrast, innovations such as production innovation can be
achieved at the subsystem level without impacting company’s
overall strategy.

34. VALUE INNOVATORS

Monitor competitors but do not use them as
benchmarks

Do not focus on competing

Do not offer certain product and services features just
because that is what their rivals are doing

Must not be constrained by what it already has. It
must ask, what would we do if we were starting
anew?

Think in terms of the total solution customer’s
sought, even if that is beyond industry’s traditional
offerings.

35. Red Ocean StrategyRed Ocean Strategy Blue Ocean StrategyBlue Ocean Strategy

36. Value innovation is based on the view that market boundaries &
industry structure are not fixed and can be reconstructed by the
actions and beliefs of industry players.
This is RECONSTRUCTIONIST VIEW STRATEGY as it always
involve both opportunity and risk, be it a red ocean or a blue ocean
initiative. The playing field is dramatically imbalanced in favor of tools
and analytical frameworks to succeed in red oceans.
Red Oceans will continue to dominate company’s strategic agenda
even as the business imperative for creating blue oceans takes on
new urgency.
Value Innovation- Making Business Breakthroughs
Successful & Repeatable

37. Impact of Creating Blue OceansImpact of Creating Blue Oceans

38. ANALYTICAL TOOLS & FRAMEWORKS
Effective blue ocean strategy should be about risk
minimization and not risk taking.
The value curve is the basic component of the strategy
canvas, is a graphic depiction of a company’s relative
performance across its industry’s factors of competition.
To reconstruct buyer value elements in crafting a new
value curve, they developed the four actions framework.

39. Blue Ocean Success Framework

40. CIRQUE DU SOLEIL, provides insights into delivering
breakthrough innovation for superior outcomes
ELIMINATE
- star performers
- animal shows
- aisle concession sales
- multiple show arenas
REDUCE
- fun & humor
- thrill & danger
RAISE
- unique venue
CREATE
- theme
- refined environment
- multiple productions
- artistic music & dance

41. 3 Complementary qualities for Effective Blue Oceans
strategy
FOCUS – every great strategy has focus, and a company’s strategic
profile of value curve, should clearly show it.
DIVERGENCE – when a company’s strategy is formed reactively as it tries
to keep up with the competition, it loses its uniqueness.
COMPELLING TAGLINE – a good strategy has a clear – cut and
compelling tagline. A good tagline must not only deliver a clear message
but also advertise an offering.

42. RECONSTRUCT
The 1st
principle is to RECONSTRUCT
MARKET BOUNDARIES
6 basic approaches to remaking market boundaries called SIX
PATHS FRAMEWORK.
PATH 1: LOOK ACROSS ALTERNATIVE INDUSTRIES
Alternatives – products or services that have different functions and
forms but the same value-innovation purpose.
Colgate offers the expertise of Dentists for Free Oral Healthcare
checkups.

43. PATH 2: LOOK ACROSS STRATEGIC GROUPS WITHIN
INDUSTRIES
Strategic groups are a group of companies within an industry that
pursue a similar strategy.
Ex: Shantanu & Nikhil created the blue ocean of “high sportswear
fashion where non existed”.
PATH 3: LOOK ACROSS THE VALUECHAIN OF BUYERS
Purchasers who pay for the product or service may differ from the
actual users, and in some cases there are important influences.
Ex: Bloomberg became one of the largest & most profitable
business information providers in the world.

44. PATH 4: LOOK ACROSS COMPLEMENTARY PRODUCTS AND
SERVICE OFFERINGS
Analyse what happens before, during and after the product is used.
e.g. Secure B2B e-sourcing for SMEs from China with drop-
shipping services by Alibaba.com.
PATH 5: LOOK ACROSS FUNCTIONAL OR EMOTIONAL APPEAL
TO BUYERS
2 possible bases if appeal:
Rational – e.g. branded, authentic Jewelry by Tanishq
Emotional – e.g. T20 carnival IPL from BCCI
PATH 6: LOOK ACROSS TIME
Managers can actively shape their future and lay claim to a new
Blue Ocean e.g. Magi Noodles strategy with 8 years of business losses
inbuilt at the start

45. 3 PRINCIPLES - CRITICAL TO ASSESSING TRENDS
1. Must be decisive to your business
2. They must be irreversible
3. They must have a clear growth trajectory
Example: Apple Inc

46. FOCUS ON THE BIG PICTURE, NOT THE NUMBERS
Focus on Big picture, not the numbers is a principle that is
key to mitigating the planning risk of investing lots of time but
delivering only tactical red ocean moves.
Develop alternative approach to existing strategic planning
process that is based not on preparing a document but on
drawing a breakthrough strategic canvas.

47. 4 STEPS OF VISUALIZING STRATEGY
1. VISUAL
AWAKENING
2. VISUAL
EXPLORATION
3. VISUAL STRATEGY
FAIR
4. VISUAL COMMUNICATION
-compare your
business with your
competitors by
drawing “as is”
strategy canvass.
-see where your
strategy needs to
change.
-go into the field to
explore the six paths
to creating blue
oceans
-observe the
distinctive advantage
of alternative
products and
services
-see which
competitors you
should eliminate
create or change.
-draw your “to be”
strategy canvass based
on insights from the
field observations.
-get feedback on
alternative strategy
canvass from
customers, competitors
customers and
noncustomers.
-use feedback to build
the “to be” future
strategy.
-distribute your before and
after strategic profiles on one
page for easy comparison.
-support only those projects
and operational moves that
allow your company to close
the gaps to actualize the new
strategy.

48. REACH BEYOND EXISTING DEMAND
2 Conventional Strategy Practices:
1. Focus on existing customers
2. Drive for fines segmentation to accommodate buyer differences
3 TIERS OF NON-CUSTOMERS
3RD
TIER2ND
TIER
1ST
TIER
YOUR
MARKET
1st
tier – “soon-to-be” noncustomers
who are on the edge of your market,
waiting to jump ship.
2nd
tier – “refusing” noncustomers who
consciously choose against your market.
3rd
tier – “unexplored” noncustomers
who are in the markets distant from yours

49. GET THE STRATEGIC SEQUENCE RIGHT
Buyer utility
Is there exceptional buyer
utility in your business idea?
Price
Is your price easily accessible to
the mass of buyers?
Cost
Can you attain your cost target
to profit at your strategic price?
Adoption
What are the adoption hurdles in
actualizing your business idea?
Are you addressing them up
front?
YES
YES
YES
YES
No  Rethink
No  Rethink
No  Rethink
No  Rethink
These 1st
two
steps address the
revenue side of a
company’s
business model
A commercially viable BOS idea

50. Execution Principles

Overcome key organizational hurdles

Cognitive, limited resources, motivation and political hurdles
- Hot spots, cold spots and horse trading

Build execution into strategy

Fair process is a key variable that distinguishes successful
blue ocean strategic moves from those that failed
Examples:
1. IPL 3. Maggi Noodles
2. Cirque du Soleil 4. iPAD/iPhone
BUILD EXECUTION INTO STRATEGY

51. 3Es of Strategic Fair Process

Engagement – means involving individual in the strategic
decisions that affect them by asking for their input and
allowing them to refute the merits of one another’s ideas and
assumptions.

Explanation – means that everyone involved and affected
should understand why final strategic decisions are made
as they are.

Expectation clarity – requires that after a strategy is set,
managers state clearly the new rules of the game.

52. SUSTAINABILITY & RENEWAL OF BLUE OCEANS
• Value innovation does not make sense to a company’s conventional logic
• Blue Ocean Strategy may conflict with other company’s brand image
• Natural Monopoly: The market often cannot support a second player
• Patents or legal permits block imitation
•High volume leads to rapid cost advantage for the value innovator,
discouraging followers from entering the market.
• Network externalities discourage imitation
• Imitation often requires significant political, operational, &cultural changes.
• Companies that value – innovate earn brand buzz and a loyal customer
following that lends to shun imitators.

53. Inculcating an intrapreneurship
work culture, enterprise-wide

Intrapreneurship is entrepreneurship that takes place within an
organization

Entrepreneurship is the contribution of an innovation or added
value

Intrapreneurship is similar to entrepreneurship

Intrapreneurial practice is similar to entrepreneurial practice

Intrapreneurship is a miniature version of entrepreneurship: same
flavour, same substance, similar activities but less risky

54. What are intrapreneurs?
People who are dedicated to what they do

People who do not like routine

Results-oriented

Focus on novelty and innovation

People who regard boundaries differently from other people

Agents of change

55. Characteristics of intrapreneurs
(1)

Committed

Motivated

Flexible/ adaptable

Creative/resource-ful

Willing to learn

Innovative

Visionist

56. Characteristics of intrapreneurs
(2) ☺ Sensitive to environments
☻ Want to do more

High standards

Able to live with risk and
ambiguity

Able to manage risk

Balanced relations system
(information/support)

57. Differences between entrepreneurs and
intrapreneurs
Entrepreneur

Venture creator

Controls resources

Absolute decision-making
power

Knows all the firm’s operations
Intrapreneur

Staff member

Not much control over resources

Not much power

Knows the activities in his or her
sector

58. Intrapreneurial Practice
.
Development of something new
Observation of needs
Reflexive listening
Opportunity
Ongoing progress

59. What does intrapreneurial activity
involve?
¤ Presence of a need
¤ Opportunity detection and creation
¤ Design and development of innovative projects
¤ Risk management
¤ Resource use
¤ Political skills
¤ Support system, usually informal
¤ Innovative activities
¤ Added value

60. Why behave and act like an
intrapreneur?
Different reasons

Need to advance or progress

Intrapreneurs are committed to what they do, like to go
further, and are perfectionists

Intrapreneurs behave as though the business belongs to
them

Intrapreneurs seek performance, both for themselves and for
their organization

61. Intrapreneurs
Creative and Action-oriented
☻It’s not hard to understand
the intra-preneurial profile.
Intra-preneurs are passionate
about new ideas and want to
learn. Unlike managers, they
become bored and are
uncomfortable with repetitive
tasks.
Serban Teodoresco

62. How do intrapreneurs think?

Knowledge of the sector
Need
Opportunity
Visionist conception
What should be
Anticipated result
Creativity
stimulated
by thinking
about the
user’s
needs

63. Five Precepts for Intrapreneurs
 Set goals that include precise targets
 Decide how to go about achieving those goals (including
scenarios)
 Select the right time for action
 Make sure people are aware of achievements
 Garner support and acknowledge supporters after the fact

64. Fighting Organization’s Immune System

Understand the DNA of the organization

Identify elements of resistance to change

Identify communication taboos
 Identify the aspects that prevent people from taking action

Identify progressive elements that can be relied on for support
(bridges)
Build a highway to action

65. Overcome the Morphine Effect
 Look carefully to develop the people and resources within
the organizational environment that are no longer seen or
used to their full potential and value
 Identify attitudes from the past that prevent people from
seeing changes in the environment
 Identify things that have become routine, but that could be
revitalized
Do not be afraid of rattling the cage and proposing
new ideas

66. Elements of an Intrapreneurial Activity
System
Need /
opportunity
Design
Implementation of innovative
activities
Added value
Risk
Suppor
t
Resources
Political
skills

67. Intrapreneurial Culture (1)
¤ Values innovation, especially new methods
¤ High level of staff accountability
¤ Activities focused on clients and users, both internal and
external
¤ Importance of individual and collective, learning, both formal
and informal

68. Intrapreneurial Culture (2)
¤ Support for people who do and achieve things – “doers”
¤ Tolerance for mistakes but not for stupidity
¤ Innovative people are valued
¤ Acknowledgment and rewarding of success
¤ Sharing of profits or revenues generated by intrapreneurial
activities

69. How do intrapreneurs act?
 Intrapreneurs:
 Enjoy action
 Listen to their own intuition
 Are always testing something
 Prefer a gradual approach
 Are well informed; they know up to where they can stretch
the boundaries of what is possible
 Listen, observe, question, think, learn, communicate and
choose the right time to take action

70. Managing Intrapreneurial Projects
.
Information gathering
Market surveys
Sector analysis
Understanding of consumer
needs and trends
Design of the vision
Design of projects
Action plans
Market test
Feasibility studies

71. Some Characteristics of Intrapreneurs

The same as those of entrepreneurs, except more so
Some characteristics of
entrepreneurs
Committed
Resourceful
Flexible
Innovative
Sensitive to environmental
changes
Tolerate risk
Know their sector
Hard workers
Action-oriented
Some characteristics of intrapreneurs
Conservative risk takers
Have good relations networks both
inside and outside the organization
Know the limits of what is acceptable
Use resources wisely
Politically skilled
Focused on results

72. 72
Intrapreneuring
G.Pinchot & R. Pellman

Make your mistakes faster and cheaper

Bet on people not just ideas

Recognize real intrapreneurs from promoters

Don’t filter out the truth

Treat the team as single entity

Don’t trigger corporate immune system with “Grandiosity”

Live with your customers

Build financial models but don’t believe them

Sponsors must move closer to a peer relationship with the team

Reach out across corporate boundaries

73. 24
The Intrapreneur’s 10 commandments
G. Pinchot
1) It is easier to ask for forgiveness than for permission
2) Do any job needed to make the project work regardless of your job
description
3) Come to work each day willing to be fired
4) Recruit a strong team
5) Ask for advice before asking for resources
6) Spread credit wide and celebrate victories
7) When you bend the rules always keep the best interest of the company and
customers in mind
8) Recognize and honor your sponsors
9) Underpromise and overdeliver
10) Be true to your goals but realistic about ways to achieve them

74. What to do to prepare for
intrapreneurial action
Enter into contact with an entrepreneurial culture,
intrapreneurs and entrepreneurial actors

Read biographies (case studies) of entrepreneurs and
intrapreneurs

Work with internal and external mentors

Become a mentor for young, innovative entrepreneurs

Think about, describe and perfect one’s own intrapreneurial
model

75. What can be done to improve the probability
of intrapreneurial success?

Use mentors and coaches

Set up an innovation support advisory board for every project

Set up a club for intrapreneurs or “innovation enthusiasts”

Introduce a formal support policy for innovative expression

Introduce a program to acknowledge innovative
achievements

76. Intrapreneurship and Mentors

Importance of the role played by mentors in every
professional activity

Excellent evaluation of entrepreneurship mentoring programs

Mentors need some basic training

Often, different forms of dual mentoring can be used: e.g.
technical mentor and managerial mentor

Mentoring activities should be completed by coaching
activities

77. What impacts do intrapreneurial activities
have on organizations?

A society without entrepreneurs will eventually die, as will an
organization without innovation

Development of a culture based on excellence, leadership
and success (Jack Welch, Japanese firms)

Internal stimulation beyond the stage where “other people”
are insecure

78. Conclusion

Intrapreneurship leads to innovative practices that catapult
the organization into a leadership position in its sector

Intrapreneurship involves risk and requires above-average
levels of effort and skill, but it brings a great deal of
satisfaction to the people who practise it
Intrapreneurship is a win-win process

79. Intrapreneurship is a bridge to
innovation

80. Intrapreneurship
Innovation in Organizations
The Light
 Thanks
 Questions?

81. Individuals can create Blue Ocean to re-invent
themselves or even their companies
Sportswoman Marie Kom:
Showbiz Superstar Amitabh Bachchan
Steve Jobs - iPAD
Ratan Tata _ Nano car

82. Guts to Glory Blue Ocean Strategy Mission Necessities
When there is will there is a way too – Desire, Discipline & Dedication
Fortune favours the brave: Stay true to the course & be ethical always