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“ABOUT WINNING WITHOUT FIGHTING”
BLUE OCEAN STRATEGY
Faculty of Business & Information Systems
Master of Science in Logistics Management
GM522_BLUE OCEAN STRATEGY
Group Presentation
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1.Zumrad Rashidova (Sofi)_1001335416
2.Syeda Munazza_100143664
3.Yasin Absar_1001644581
4.Mati Ur Rehman_1001748258
5.Mohammad Nazmuzzaman Hye_1001748700
6. Musharat Hossain Toma_1001748800
7.Sayed Sulaiman Shah_1001749052

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“To fight and conquer in all your battles is not supreme excellence;
supreme excellence consists in breaking the enemy's resistance without fighting”
Master Sun Tzu in ‘ Art of War’
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Companies often compete with one another to gain shares in crowded markets, but what if there
was a more effective way? In this Presentation we look at a different approach: the Blue Ocean
Strategy, which avoids competing and instead looks to create demand in untapped markets.
Illustration Of Two Businessmen One Fishing In Red Ocean And The Other In Blue Ocean
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OUTLINE
PART A Strategy Framework Understanding
 Blue Ocean Strategy Importance to Business
 Eight Core Principles of Blue Ocean Strategy
 Key Concepts Underlying Blue Ocean Strategy
 Analytical tools and framework
 Formulating and Executing Blue Ocean Strategy -Over View
 Formulating and Executing Blue Ocean Strategy-Mind Map
 Successful Application of BOS
PART B Compare and Contrast BOS Approach with Other Strategic Model
 Comparison Matrix
 Similarities of Blue Ocean Strategy and Porter’s Generic Strategy
 Limitations of Blue ocean Strategy and Porter's Generic Strategy
 Why are the approaches interesting?
 To what extent are the Blue Ocean Strategy is susceptible or immune to the common flaws in strategic thinking?
 Conclusion
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PART-A : Strategy Framework Understanding

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Blue Ocean Strategy Importance to Business
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Create
Uncontested
Market Space
Invent and
Carputer
New Demand
Customer
Value + Low
cost

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Eight Core Principles of Blue Ocean Strategy
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(1)Grounded in Data
• 10 year study/150 strategic moves
• 30 industries/100 years
(2)Pursues Differentiation +
Low Cost
• “and-and” not “either-or”
• Reduce competing factors/create new factors
(3) Creates Uncontested
Market Space
• Make competition irrelevant
• Look outside the boundaries
(4) Tools and Frameworks
• Underlying frameworks exist as a guide
• Built on common strategic patterns of Blue Ocean Strategy
(5)Provides Step-by-Step
Process
• Provides a stepped process for implementation
• Gives management an alternative to traditional strategies
(6) Maximizes
Opportunity/Minimizes
Risk
• Mitigates risk
• Increases odds of success
(7) Builds Execution into
Strategy
• Ensures employee support
• Process and tools are inclusive
(8) Creates a Win-Win
Outcome
• Strategy aligns value, profit and people
• Ensures acceptance, support, sustainability
W. Chan Kim and Renée Mauborgne (2015) Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make
the Competition Irrelevant Hardcover – January 20, 2015, Harvard Business Review Press Website: https://www.blueoceanstrategy.com/

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Key Concepts Underlying Blue Ocean Strategy
In Red Oceans, our efforts are focused on the conventional logic that we must outplace the completing with a better solution
to a given problem. Blue Ocean Strategy invites us to redefine the problem itself. It does so by breaking the value-cost Trade-
off in view of creating new and uncontested Market places. Places where no one has been and where we would be the one
defining the rules.
The Difference Between Red and Blue Ocean Value Innovation: The Heart of Blue Ocean Strategy
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The concept of Value Innovation is developed by W. Chan Kim and Renée Mauborgne
W. Chan Kim and Renée Mauborgne (2015) Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make
the Competition Irrelevant Hardcover – January 20, 2015, Harvard Business Review Press Website: https://www.blueoceanstrategy.com/

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Analytical Tools and Framework
The Strategy Canvas Is Both The Start And The End Point Of Blue Ocean Strategy Formulation. An Initial Value Curve Depicts Where The
Industry Competes On And Invests In, It Is Then Transformed Via The Eliminate-Reduce-Raise-Create Actions Framework. The Resulting
Value Curve shows a focused effort that diverges rom existing market offerings and can be easily translated into a compelling tagline.
The Strategy Canvas - Graphical Representation of Strategy+ Big Picture View + Landscape Scanning+ Relative Positioning Vs. Competitors
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Strategy Canvas developed by W. Chan Kim and Renée Mauborgne
W. Chan Kim and Renée Mauborgne (2015) Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make
the Competition Irrelevant Hardcover – January 20, 2015, Harvard Business Review Press Website: https://www.blueoceanstrategy.com/

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Analytical Tools and Framework
The Four Actions Framework The four actions framework is used to reconstruct the buyer value elements that will define our future value
curve.
New Value Curve : Our new value curve will depict a viable strategy if it has three characteristics (3 Characteristics of a good Strategy)
1. FOCUS: it shows that we do not diffuse our efforts across all key factors of competition.
2. DIVERGENCE: the shape of our curve diverges from those of other players.
3. The curve can be easily translated into a clear, strong, truthful and compelling TAGLINE
The Four Actions Framework developed by W. Chan Kim and Renée Mauborgne
W. Chan Kim and Renée Mauborgne (2015) Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make
the Competition Irrelevant Hardcover – January 20, 2015, Harvard Business Review Press Website: https://www.blueoceanstrategy.com/

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Formulating and Executing Blue Ocean Strategy- Over View
The development of a BOS is based on six principles, four (4) related to the formulation of BOS and two (2) related to BOS
implementation. Each of the six principles aims to reduce the different possible risks arising from BOS.
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Developed by W. Chan Kim and Renée Mauborgne
W. Chan Kim and Renée Mauborgne (2015) Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make
the Competition Irrelevant Hardcover – January 20, 2015, Harvard Business Review Press Website: https://www.blueoceanstrategy.com/

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Successful Implementation of Blue Ocean Strategy
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Strategic Questions before NetJets
- How to enter into the Aviation Space when the market was dominated by the big airlines groups ?
The RED Ocean
- Over 20 Domestic and international Airlines Competing in the Space
- All of the attracted Business Travelers, Holiday Travelers and Casual Travelers
- Corporate Spent millions on executive travel every year
- All travelers had to go through the long check ins, security checks , hectic flight transfers , congested airports, Baggage Claims ….. etc.
- Business Travelers only have the option of business class/first class or corporate jet
The Blue Ocean
- Identified that Business Travelers are the most frequent and regular flyers
- NETJETS offered Business Travelers “The Convenience of a Private Jet at the Price of a Airline Ticket”
- NETJETS also provided factional 1/16 ownership of the aircraft – with no hassles Aircraft Maintenance
- Private Aircraft Made Available to corporate at 4 hours notice (much less than flight booking)
- No Hassles or responsibilities of Aircraft Maintenance.
- Customized in flight services – only for the traveler Created a B2B industry when the entire industry was still B2C

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Successful Implementation of Blue Ocean Strategy
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The Story of INDOCHINO.COM
- World’s first self service virtual suit company
- Customer can choose the fabric , design , style and accessories – Online
- Buttons lapels , linings, pockets , cuff signature –everything is customizable
- Customer themselves and provide fitting details online with video tutorial
- Delivery within 3 Weeks
- If Order is less than perfect , INDOCHINO pays for local tailoring or remake the suit for free
- Most Suits prices under US$ 500 ( Where cheap suits cost around US$2000 and the designer once around US$1500
Traditional Apparel / Suit Companies
- Industry divided into five segments : Haute Couture, Luxury , Affordable Luxury Mainstream and Discount
- The traditional companies competed among each other on the factor like : No. of stores , location of stores , premium stores , premium
brand , range or no. of lines offered, Hi fashion Vs. customization Vs. Price Tradeoff
- Marketing and brand reputation (Top Brand associated with Designer Labels)
- High Customization Cost
INDOCHINO
- INDOCHINO.COM Does not compete in any of the segment
- INDOCHINO.COM does not get affected by the industry factors
- INDOCHINO.COM built its brand reputation by delivering value
- INDOCHINO.COM outsources al suits to quality and reputed local and tailor network of Shanghai.
Created and captured a new Market Demand by focusing on Buyer Utility

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Successful Implementation of Blue Ocean Strategy
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The Story of ZYNGA
- Founded Zynga in April 2007 with a mission “Connect the World through games”
- Has over 3000 Employees and 270 million customers , 60 Mn. Daily active users.
- Largest Social games developer of Facebook
- Now Provides games in multiple platforms like : Facebook , Myspace, Android , iPad, iPhone , Yahoo and Framvile.com
Traditional Gaming Companies
- Industry divided into four Segments : Console based Games, Online Games , Mobile Games and Flash Games
- Console based games dominated the marketplace with 75% of the revenues
- The big three of the gaming dominated 95% of the console market place (Sony, Nintendo , Xbox )
- The traditional gaming companies competed each other in the following factors : Consoles – type speed , Capabilities , No of title in
each game , speed of the title release –weekly, monthly , High-end real time graphics , High- end accessors
- Catered only to gamers- teenage boys to professional gamers
- Addictive and had lot of side effect- Too much violence, addiction , lack of exercise , not mind simulating.
- Parents Usually don’t recommend /buy.
Zynga
- Zynga did not compete in any of the segment or market player dominance
- Zynga’s (Farm Vile) did not get affected by the industry factors
- Zynga built it’s brand reputation by sharing and work of mouth connect
- Zynga catered to all – children , parents , professional…
- Zynga created a new genre of education/ simulation games.
Created and captured a new Market Demand by focusing noncustomer

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Successful Implementation of Blue Ocean Strategy
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The Story of KHAN ACADEMY
- A non-profit educational organization created in 2006 by Salman Khan – A MIT and Harvard Business School Alumni
- Free Online Collection of more than 3,300 micro lectures
- Most Viewed online courses and lectures in the world-over 172 million of total views.
- Over 177 million lessons delivered till date
- Close to quarter billion dollars in donation
- Team size just 20
- Amongst the 100 most influential people of the world
Traditional Education Companies
- Industry divided into 2 segments : Brick and Mortar Learning – School / College , Online Learning
- Learning was centered around students
- The factors that the industry was completing: Student Teacher Ratio , Class room interaction, cost of Learning /Education , interactive learning
- Smart kids get more attention than other kids
- Focused Pedagogy – Teacher talks – Students Listen- Therefore Students learn
- Teacher judge Student’s strength/weakness
Created and captured a new Market Demand by focusing on functionality & emotional appeal
KHAN ACADEMY
- Khan Academy filled the gaps exist in traditional brick and mortar school learning : Videos and exercise to be used as a teaching aid and not
replacement for teacher , Use analytics and technology to figure out the strengths and weakness of students.
- Learning is centered around students , teacher and parents
- Everybody gets equal opportunity/attention /leaning
- Unique pedagogy- Stop , rewind , understand and then play
- Analytics drive the understanding of each students strengths & weakness

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PART-B : Compare and Contrast BOS Approach with Other Strategic Model
 Comparison Matrix
 Similarities of Blue Ocean Strategy and Porter’s Generic Strategy
 Limitations of Blue ocean Strategy and Porter's Generic Strategy
 Why are the approaches interesting?
 To what extent are the Blue Ocean Strategy is susceptible or immune to
the common flaws in strategic thinking?
 Conclusion

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Comparison Matrix
Management Gurus ANSOF (1979) PORTER (1980) HAX AND WILDE (1999) Kim and Mauborgne (2005)
Strategy Product/Market Growth
Matrix
Generic Strategy Delta Model BLUE OCEAN Strategy
OBJECTIVE New product has
“commonality”
with existing
products
Find best generic
strategic position
New sources of
profitability
Value innovation
INTERNAL ANALYSIS SWOT
Analysis
Analysis of the
five forces
Costs x
differentiation
dilemma
Rebuild market
frontiers
MACRO ENVIRONMENT SWOT
Analysis
Analysis of the
five forces
Align strategic
option with firm
activities
Focus on broad
panorama, not on
numbers
FUTURE SENARIOS Product/Market
growth matrix
Identification of
opportunities
Continually
respond to an
environment of
uncertainties
Create
uncontested
market space
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References : Jussani, A. C., Krakauer, P. V., & Polo, E. F. (2010). REFLECTIONS ON BLUE OCEAN STRATEGY: A COMPARISON WITH
ANSOFF’S, PORTER’S, AND HAX AND WILDE’S STRATEGIES. Future Studies Research Journal : Trends and Strategies, 17-35.

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Limitations of Blue Ocean Strategies
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Limitations Description Example
Arriving too early Entering a market too early is a clear risk.
Customers might not understand what you are
trying to sell. The technology might not be fully
developed.
The Amiga computer was a decade ahead of
PCs and Macs, it was a technological
marvel, and it died because the World was
not ready for it.
Being too new, too different. 1. Some blue oceans are free of predators, but
also free of fish. Many companies come up
with great ideas but the market is not ready.
2. Consumers don’t like too much change.
1. When P&G introduced their improved
concentrated laundry detergents, it
failed because consumers could not
conceive how a few drops could clean as
well as a cap-full of Tide.
2. QWERTY keyboard layout, designed in
the early mechanical typewriter era
(1873) to slow typing down. The
DVORAK keyboard, designed in 1936, is
clearly superior for this age, yet we
don’t want to change.
Defensibility The moment you find a new ocean, other sharks
from your former red ocean and other adjacent
oceans will be attracted to your new market.
Eventually become red ocean , Example :
1. Air Asia mode of operations is copied
form Virgin Atlantic international Airline
2. MYDIN Hyper Market --- concept
copied from Best Buy.

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Limitations of Porters Generic Strategies
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Limitations Description Consequences
Heavy reliance on modern equipment Porter states that “heavy up-front capital
investment in the state-of the-art equipment” is
required (Porter, 1998, p. 40).
Investing a big fortune in state-of the-art
equipment when one is not clear about its
advantage for sure would lead to investing a
majority of money in something that may not be
profitable at all (Datta, 2009, p. 6).
Requirement of High Market Shares Porter stated that: “low overall cost position
often requires a high relative market share or
other advantages, such as favourable access to
raw materials” (Porter, 1998, p. 36).
But how one can achieve high market share in the
first place? Scholars are arguing that market share
leaders are actually coming to that point through
differentiation strategy let it be of higher quality or
attractive packaging, rather than through cost
leadership (Datta, 2009, p. 22).

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Similarities of Blue Ocean and Porter’s Generic Strategy
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• Through Differentiation Strategy, the company invests heavily in image, technology,
technical assistance, distribution, research and development, human resources, market
research, and quality in order to differentiate its products for its clients.
• On the other hand Through Strategy Canvas, the company clearly see the factors that the
industry competes and based on that and Reorienting their focus from competitors to
alternatives and from customers to noncustomers

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Why Blue Ocean and Porter’s Generic Strategy is Interesting ?
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BLUE OCEAN STRATEGY A Rising Call for Creative
Solutions
There is a rising need for organisations of every stripe
to simultaneously pursue differentiation at low cost to
stand out in the market. That’s what we call value
innovation’, the cornerstone of blue ocean strategy.
Read more at
PORTER’S GENERIC
STRATEGY
Parameters of choice According to Porter’s companies have option to choose
any of the three Strategy -DIFFERENTIATION SRATEGY,
COST LEADERSHIP STRATEGY , FOCUS STRATEGY

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To what extent Blue Ocean Strategies is susceptible or immune
to the common flaws in strategic thinking?
Theme Factors Extent of Flaws Blue Ocean Strategy
Assessment - Realistic Execution Capabilities
- Ccompetitors Reactions
- Demand Forecasting
- Evaluation of Specific Decisions
Less Biased STRATEGY CANVAS
1. To clearly see the factors that the
industry competes
2. Reorienting their focus from
competitors to alternatives and from
customers to noncustomers
Process - Reviewing the business case
- Innovative Idea reached to top
Management
Availability of Critical
Information to decision
Maker
SEQUENCE OF BLUE OCEAN STRATEGY
1. Is there exceptional buyer utility in
your business idea?
2. Is your price easily accessible to the
mass of buyers?
3. Can you attain your cost target to profit
at your strategic price?
4. What are the adoption hurdles in
actualizing your business idea?
Are you addressing them upfront?
Focus on
Targets
- Financial and Strategic targets
- Short terms and Long terms Target
Well aligned incentives with
strategic objectives
New Value Curve depict –
1. Strong Focus
2. Stands apart from competitors
3. Clear-cut and easy to communicate
tagline
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References: Dye, Renee; Sibony, Olivier and Truong, Vincent (2009) “Flaws in strategic decision making:
McKinsey Global Survey results,” January 2009, McKinsey & Company

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Conclusion
 A company must master its traditional markets using conventional strategic planning tools.
 It will always be important to swim successfully in the red ocean by out competing rivals. Red
oceans will always matter and will always be a fact of business life.
 But to focus on the red ocean is therefore to accept the key constraining factors of war- limited
terrain and the need to beat an enemy to succeed – and to deny the distinctive strength of the
business world: the capacity to create new market space that is uncontested.
 But to sustain high performance, companies must create their own blue oceans, and make the
competition irrelevant!
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