Post on 12-May-2015
What Color is your Business Strategy?
Iyad Mourtada
BLUE OCEAN
STRATEGY
Renée Mauborgne W. Chan Kim
Harvard Business School Press
Red Ocean StrategyCompete in existing market space.
Beat the competition.
Exploit existing demand.
Make the value-cost trade-off.
Align the whole system of a firm’s activities with its choice of differentiation or low cost.
Blue Ocean StrategyCreate uncontested market space.
Make the competition irrelevant.
Create and capture new demand.
Break the value-cost trade-off.
Align the whole system of a firm’s activities in pursuit of differentiation and low cost.
Analytical Tools
Frameworks
Jackson Pollock No.5, 1948 = $156.8
Margin
Value--- Benefit = $20
--- Price = $15
--- Cost = $5
Buyer
Seller
The Value of a buying the BookShopping
Margin
Value
--- Benefit = $20
--- Price = $10
--- Cost = $2
Buyer
Seller
Discount the Price
Margin
Value
--- Benefit = $25
--- Price = $18
--- Cost = $8
Buyer
Seller
Enhance the Offer
- Free WIFI
- Better Service
- Relaxing Music
- No Waiting lines
- Cost
Value Innovation
+ Value
--- Benefit = $35
--- Price = $15
--- Cost = $3
Margin
Value
Bu
sin
ess M
od
el
Can
vas
Bu
sin
ess M
od
el
Can
vas +
Value
Value Innovation
- Cost
Pioneers
Migrators
Settlers
Today Tomorrow
Pioneer, Settler, Migrator Map
Diagram courtesy of http://softwarecreation.org/2008/ideas-in-software-development-revolution-vs-evolution-part-1/
Disruptive Innovation
"We were naive to think that the best technology would prevail" - Steve Wozniak, Founder of Apple
(Time, Quality, Utility)
© 2004-2012, Kim & Mauborgne.
Strategy Map
Strategy CanvasHigh
Low
Price
Indu
stry
In
vesti
ng F
acto
rsWhat the Buyer Receives
How attractive is your industry?
It is not about how big your ship is
It is not who will do it first
How do you do strategic Planning?
Blue Ocean Strategy
Evolution of Video Games
Four Steps of Visualizing Strategy1. Visual Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
Buyer utility Is there exceptional buyer utility in your business idea?
No-- RethinkYes
Sequence of Blue Ocean Strategy
Price Is your price easily accessible to the mass of buyers?
Cost Can you attain your cost target to profit at your strategic price?
Adoption What are the adoption hurdles in actualizing your business idea? Are you addressing them up front?
No-- RethinkYes
No-- RethinkYes
No-- RethinkYes
A blue ocean strategic move is achieved by developing and aligning the three strategy propositions :
Value Proposition Profit proposition People proposition
Integrate Online, Mobile, and Social Media Channels with your
existing retail channels to
create value
Don't just build a mobile app. Build a business model
around
What is your business model?
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