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Blue Ocean Strategy Concepts
Blue Ocean Strategy Concepts
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Blue ocean

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محاضرة تعريفية عن استراتجية المحيط الازرق وهي اتجاه جديد كليا في علم التسويق

محاضرة تعريفية عن استراتجية المحيط الازرق وهي اتجاه جديد كليا في علم التسويق

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Blue ocean

  1. 1. Blue Ocean Strategy Ph.Hussam Kassab
  2. 2. “How to create uncontested market space "and make the competition irrelevant “The only way to beat the competition is to stop trying to beat the competition!”
  3. 3. Value through Innovation Equal emphasis on value and innovation Successful value innovation: • Drives down costs while driving up buyers value • Uses a whole-system approach • Follows reconstructionist view
  4. 4. Value through Innovation In 2012, Boehringer Ingelheim achieved net sales of about 14.7 billion euro. R&D expenditure in the business area Prescription Medicines corresponds to 22.5% of its net sales.
  5. 5. Three Tiers of Noncustomers The first tier of customers minimally buy an industry’s offering out of necessity. the second tier of noncustomers refuse to use your industries offerings. The third tier are noncustomers who have never thought of your market’s offerings as an option. Your Market First Tier Second Tier Third Tier
  6. 6. Buyer Experience Cycle Purchase Delivery Use Supplements Maintenance Disposal How long does it take to find the product you need? How long does it take to get the product delivered? How effective are the product’s features and functions? Do you need other products and services to make this product work? Does the product require external maintenance? Does use of the product create waste items?
  7. 7. New Market Space There is a fairly good understanding of how to compete in Red Oceans. Blue Oceans are known to exist, however, there is little practical guidance on how to create them. focuses on the analytical frameworks necessary to create Blue Oceans and the managerial strategy needed to sustain them.
  8. 8. Red oceans • Industry boundaries defined and accepted • Competitive rules of game known • Companies try to outperform rivals; cutthroat competition • As market space gets crowded, prospects for profit and growth reduced • Products become commodities • Red ocean strategy is a market-competing strategy
  9. 9. Blue oceans • Undefined market space, demand creation, opportunity for highly profitable growth. • Most are created from within red oceans by expanding existing industry boundaries. • Rules of game waiting to be set. • Competition irrelevant. • Blue ocean strategy is a market-creating strategy.
  10. 10. Blue Ocean Strategy: Reconstruct Market Boundaries Buyer Group Focuses on better serving the buyer group Scope of Product and Service Offerings Focuses on maximizing the value of product and service offering Time/Trends Focuses on adapting to external trends as they occur Redefines the buyer group Looks across to complementary product and service offerings Participation in shaping external trends over time Boundaries of Competition Head-to-Head Competition Creating New Market Space
  11. 11. Main Reasons for Creating Blue Oceans Supply often exceeds demand (business downturns) Increasing globalization Accelerated commoditization of products & services Increasing price wars Shrinking profit margins Brands (consumer & industrial) are becoming more similar
  12. 12. FormulatingBlueOceanStrategy- TheSixPrinciples 1. Reconstruct Market Boundaries. 2. Focus on the Big Picture, Not the Numbers. 3. Reach Beyond Existing Demand. 4. Get the Strategic Sequence Right. 5. Overcome Key Organizational Hurdles. 6. Build Execution into Strategy.
  13. 13. What factors should be eliminated that the industry has taken for granted? Eliminate What factors should be reduced well below the industry standard? Reduce What factors should be created that the industry has never offered? Create What factors should be raised well beyond the industry standard? Raise Four Actions to create a Blue Ocean
  14. 14. Minimizing Risks and Maximizing Opportunities in Formulating Blue Ocean Strategy Formulation Risks Search Risk Planning Risk Scale Risk Business Model Risk Organizational Risk Formulation Principles Reconstruct market boundaries Reach beyond existing demand Get the strategic sequence right Focus on the big picture, not the numbers © Kim & Mauborgne 2006
  15. 15. • NN changed the buyer group for diabetes • Doctors and pure product. • Patients and easy administration. • NovoPen—a pen with measured doses of insulin • Innovo—using technology to better manage delivery times. • From insulin provider to diabetes care company
  16. 16. • The trend in music was web-based delivery • Napster, Kazaa, Limewire as pirates • Apple teams with Sony, Universal, MBG, EMI, and Warner Brothers • Legal downloads- $0.99 • Better sound quality • Ease of browsing, downloading • Blue Ocean means spotting a trend and getting there first

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