3. Blue Ocean Strategy – Agenda
1. Introduction
2. What is the method ?
3. How to use the method ?
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4. Why Blue Ocean Strategy?
“Make the
competition
irrelevant!”
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5. Create value AND lower costs at the same time
Waarde
Kosten
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6. Why do we stay on this train?
Why do we are in Red Oceans?
• We think market boundaries are given
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• They are reconstructed by the actions & beliefs of industry players
7. Video
• Video: http://www.youtube.com/watch?v=QPxLs0Cv4zY
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8. How to brake loose from the Red Ocean? An example
The Circus
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9. How to brake loose from the Red Ocean? An example
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10. What did they do?: increasing customer value at lower cost.
Costs
Value
Innovation
Buyer
Value
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11. How to attract a new type of customer?
• Define first, second and third tier customers
• Define what they want to become a customer
• Use those wants as ideas to reduce, eliminate, raise or create
Third Non-customers who have never thought
Tier of your market’s offerings as an option.
Second Non-customers who refuse to use
Your Tier your industries offerings.
current First
Market Tier
Your current customers
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12. What to eliminate, create, or change?
Reduce
Which factors
should be
reduced well
below industry
standards?
Eliminate
Create
Which of the
Which factors
factors that the
A New should be
industry takes
Value created that the
for granted
Curve industry has
should be
never offered?
eliminated?
Raise
Which factors
should be raised
well above the
industry’s
standard?
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13. Example: Cirque Du Soleil brings the circus business to
the next level. But how?
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14. Do your own exercise
• Pick a topic, product, campaign, etc.
• Fill in the canvas
- 1. What are the key factors on which we compete today?
- 2. How do we and competitors score on these factors?
- 3. Evaluate all factors and Reduce, Eliminate, Raise and Create
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15. RED OCEAN BLUE OCEAN
• compete in existing markets • create uncontested markets
• beat the competition • make competition irrelevant
• explore existing demand • create & capture new demand
• make the value/cost trade-off • break value/cost trade-off
• align with differentiation OR • align with differentiation
low cost AND low cost
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24. How did Citizen M create a Blue Ocean?
• Eliminate: Reinvented the hotel concept: Small, standard rooms
• Raise: Focus on ‘Mobile Citizens’: wifi, self service, ambassadors
• Create: Affordable luxury for the people: design, living room
• Reduce: major cost drivers: personnel, prefab building and distribution
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25. Go take a look! – Citizen M Rotterdam will be at the ‘A’
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26. Extra – not mentioned in class
• You can take a look at the example of Yellowtail wine:
• http://blueoceanstrategy.org/Presentation.ppt#1971
• And see the next slide to go through the steps to fill in the Blue Ocean
Canvas (put on ‘presentation’ mode)
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27. Three steps to fill in the canvas – example Yellowtail wine
3. Evaluate all factors and make a new line by
Reduce, Eliminate, Raise and Create
“We
High (Current)”
Competitor A
“We NEW”
We have
created a
blue ocean!
Competitor B 2. How do we and
competitors score
on these factors?
Low
Wine range
Use of Above-the-line Vineyard prestige Ease of selection
Price
marketing Aging and legacy Wine
enological Easy drinking Fun and adventure
terminology quality complexity
1. What are the key factors on which we
compete today?
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30. Draw your “to be” strategy canvas
Eliminate Reduce Raise Create
which factors that the which factors should be which factors should be which factors should be
industry takes for granted reduced well below the raised well above the created that the industry
should be eliminated ? industry’s standard ? industry’s standard ? doesn’t offer ?
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Steps: 1. What are the key factors on 2. How do we and competitors score 3. Evaluate all factors and Reduce,
which we compete today? on these factors? Eliminate, Raise and Create
31. To conclude on Blue Ocean Strategy
• Blue Ocean Strategy can be used to make the competition irrelevant
• It is also a good method to frame your thinking about new products and
markets
• But, it gives no solutions for the problems in the Red Oceans (e.g. what
to do with the huge investments in things you already do)
• And be aware: Blue Oceans will always become Red Oceans
eventually…
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32. How to come up with the ideas?
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33. Goed idee? - begin bij het waarom
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34. Hoe krijg je een goed idee? - vakliteratuur
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35. Ideeen krijg je niet alleen
• http://www.youtube.com/watch?v=NugRZGDbPFU
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38. Maak van jezelf een Blue Ocean!
• Blue Ocean Strategy is ook toe te passen op jezelf
Volg de stappen
• Verhogen: waar ben ik goed in en wil ik nóg beter in worden?
• Verlagen: wat kost mij meer moeite dan het oplevert?
• Weggooien: welke dingen zijn nutteloos of doet iedereen al?
• Toevoegen: wat vind ik gaaf en kan ik me op onderscheiden?
• Door dit dan ook echt te gaan DOEN creëer je je eigen Blue Ocean
SUCCES!
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Editor's Notes
value innovation is at the centre of the concept of “Blue Ocean Strategy” which combine cost and differentiation W. Chan Kim is The BCG Chair Professor of Strategy and International Management at INSEAD. He was a professor at the University of Michigan Business School. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union and a Fellow of the World Economic Forum...... Full Bio Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management at INSEAD, France. Mauborgne is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review .......
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. Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates.
[Concreet voorbeeld bijvoegen/oefeningetje vanuit een concreet VF product. Bijv. solar] Voorbeeld: groente op de markt [Voorbeeld geen boren maar gaten? Of iets ophangen of water erdoor laten lopen, enz.]
In the red ocean, differentiation costs because firms compete with the same best-practice principle. Here, the strategic choices for firms are to pursue either differentiation or low cost. In the reconstructionist world, however, the strategic aim is to create new best-practice rules by breaking the existing value-cost trade-off and thereby creating blue ocean.
[Oefening maken!] The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. It captures the current state of play in the known market space. This allows you to understand where the competition is currently investing, the factors the industry currently competes on in products, service, and delivery, and what customers receive from the existing competitive offerings on the market. The horizontal axis captures the range of factors the industry competes on an invests in. The vertical axis captures the offering level that buyers receive across all these key competing factors. The value curve then provides a graphic depiction of a company’s relative performance across its industry’s factors of competition.
http://www.flickr.com/photos/yuvalh/386987419 CC Attribution License Yuval Haimovits
