3. BOS definedâŠ
The avoidance of costly competition
through innovation with the aim to create
a market where no firms currently
operate, leaving the company to expand
without competition.
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8. Viewing the Cost / Value Relationship as InverseâŠ
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Cost
Reduction
Value
Increase
âą Increase of value implies
increase of cost
âą Reduction of cost implies
decrease in value
9. Viewing the Cost / Value Relationship as DirectâŠ
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Cost
Reduction
Value
Increase
âą Both cost reduction and
value increase are
possibleâŠ
13. Six Principles of BOS
âą Reconstruct market boundaries
âą Focus on the big picture, not
the numbers
âą Reach beyond existing demand
âą Get the strategic sequence right
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Formulation
Principles
âą Overcome key organisational
hurdles
âą Build execution into strategy Execution
Principles
15. 2. Focus on the Big Picture, Not the NumbersâŠ
âą Which factors
should be created
that the industry
never offered?
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âą Which factors
should be raised
well above the
industry standard?
âą Which factors
should be reduced
well below the
industry standard?
âą Which of the factors
that the industry
takes for granted
should be
eliminated?
Eliminate Reduce
Raise Create
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BOS Case StudiesâŠ
Cirque du Soleil:
Blending of opera and ballet with circus format while eliminating star
performer and animals.
Netjets:
Fractional jet ownership.
Southwest Airlines:
Offering flexibility of bus travel at the speed of air travel using secondary
airports.
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BOS Case Studies (cont)âŠ
Curves:
Redefining market boundaries between health clubs and home exercise
programs for women.
Home Depot:
Offering the prices and range of lumberyard, while offering consumers
classes to help them with DIY projects.
Dyson:
Cyclonic Vacuum Cleaners.
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The Strategy Canvas:
âą Shows the strategic profile of an industry by depicting very clearly the
factors that affect competition among industry players, as well as those
that might in the future.
âą Shows the strategic profile of current and potential competitors,
identifying which factors they invest in strategically.
âą Draws the companyâs strategic profile, or value curve, showing how it
invests in the factors of competition and how it might invest in them in
the future.
âą The horizontal axis lists factors of competition for the industry.
âą The vertical axis indicates the degree to which industry players and the
providers of alternative services invest in the competitive factors.