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Blue Ocean Strategy How to create Uncontested Market Space and Make the competition irrelevant dannyonstrategy.blogspot.com

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Strategy? Competition Attack Battlefield Competitor War Defense Commander

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What is Strategy? <ul><li>Strategy, art of employing all elements of the power of a nation or nations to accomplish the objectives of a nation or an alliance in peace or war; also the art of military command in combat </li></ul><ul><li>(© MS Encarta 2000) </li></ul>

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Our business world today is much affected by military terms ; Chief Executive Officer , headquarter , front line , operation , mission , marketing war , strategy , tactic , competitor …..strategy as a tool to win over the competition

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The famous – Porter’s Five Forces Competition among Rivalry Buyers (Buyer Power) Suppliers (Suppliers Power) Threat of New Entrant Substitutes

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<ul><li>Competition has been resulting to other competition </li></ul><ul><li>Competitors come and go </li></ul><ul><li>All of these end to bloody competition………… The Red Ocean </li></ul>

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Strategic Management <ul><li>Is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns </li></ul>

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Blue Ocean Strategy <ul><li>How to create uncontested market space </li></ul><ul><li>Make the competition irrelevant </li></ul>

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Red Ocean Vs Blue Ocean Strategy <ul><li>Red ocean strategy </li></ul><ul><li>Compete in existing market space </li></ul><ul><li>Beat the competition </li></ul><ul><li>Exploit existing demand </li></ul><ul><li>Make the value-cost-trade-off </li></ul><ul><li>Strategic ch oice of differentiation or low cost </li></ul><ul><li>Blue Ocean Strategy </li></ul><ul><li>Create uncontested market space </li></ul><ul><li>Make the competition irrelevant </li></ul><ul><li>Create and capture new demand </li></ul><ul><li>Break the value-cost-trade-off </li></ul><ul><li>Pursuit differentiation and low cost </li></ul>

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Value Innovation: the cornerstone of Blue Ocean Strategy <ul><li>Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proportion to buyers </li></ul>

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Value Innovation: the cornerstone of Blue Ocean Strategy <ul><li>Cost savings are made by eliminating and reducing the factors an industry competes on </li></ul>

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Value Innovation: the cornerstone of Blue Ocean Strategy <ul><li>Buyer value is lifted by raising and creating elements the industry never offered </li></ul>

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The Four Actions Framework Reduce Which factors should be reduced well below the industry’s standard? Eliminate Which of the factors that the industry takes for granted should be eleminated? Create Which factors should be created that the industry has never offered? Raise Which factors should be raised well above the industry’s standard? A new value curve

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Blue Ocean Strategy in Indonesia Aqua is the market leader and pioneer of packaged mineral water since 1978. It has changed the traditional way of white water serving.

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AQUA Case Study <ul><li>Packaged Mineral Water. Early 80’s beverage industry was dominated by soft drinks in can, tetrapak, and bottle pack (Coca cola, Teh botol, etc) </li></ul><ul><li>Aqua created a new technology for packaged mineral water </li></ul><ul><li>The tagline: packaged mineral water in plastic bottle. </li></ul><ul><li>It changed the traditional white water serving </li></ul>

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<ul><li>Expanding beverage market, which was dominated by softdrinks. </li></ul><ul><li>Creating new demand for natural/mineral water </li></ul><ul><li>Associated as drink in a package </li></ul><ul><li>Increase value as a healthy natural water (lifestyle) </li></ul>AQUA Case Study

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FRAMEWORK FORMULATION <ul><li>ELIMINATE : </li></ul><ul><li>Water must be boiled (cook) </li></ul><ul><li>Drink must be served </li></ul><ul><li>RAISE : </li></ul><ul><li>Value of mineral water </li></ul><ul><li>Easy to find </li></ul><ul><li>CREATE : </li></ul><ul><li>New market for packaging drink (mineral water) </li></ul><ul><li>New style of natural drink & healty </li></ul><ul><li>Simple to serve </li></ul><ul><li>REDUCE : </li></ul><ul><li>Package in glass and hard paper </li></ul><ul><li>Simple technology </li></ul><ul><li>Tech reuse </li></ul>

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