Blue Ocean Strategy
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MY TV WIDE Blue ocean strategy Strategic management and globalization Gocha Sharvashidze [email protected] Budapest Business University
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Transcript of Blue Ocean Strategy
MY TV
WIDE
Blue ocean strategyStrategic management and globalization
Gocha [email protected]
Budapest Business University
What is blue ocean strategy?
Blue Ocean Strategy vs Red Ocean StrategyValue Innovation The Cornerstone of Blue Ocean StrategyAnalytical tools for blue ocean (strategic canvas)Four actions framework
Six paths framework
Objectives
What is blue ocean strategy?
Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne.
Meaning of blue ocean strategy
Blue Ocean Strategy vs Red Ocean Strategy
The only way to beat the competition is to stop trying to beat the competition
In this concept, a market space is created which is free from any competition.
It involves competing in an existing market
spaceCompetition is irrelevant here and it has no effect on the success of a business.
industry boundaries are defined and accepted,
and the competitive rules of the game are known
prospects for profits and
growth are reduced
Blue oceans denote all theindustries not in existence today. This is the unknown market space
Business Launch
Revenue Impact
Profit Impact
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
14
38
61
86
62
39
The Profit and Growth Consequences of Creating Blue Oceans
launched in blue ocean launched in red ocean
Value Innovation The Cornerstone of Blue Ocean Strategy
value creation
focusing on beating the competition,you focus on making the competition irrelevant by creating a leapin value for buyers and your company, thereby opening up new anduncontested market space
Technology driven
Analytical tools for blue ocean (strategic canvas)
The strategy canvas serves two purposes:
• To capture the current state of play in the known market space• ,,from competitors to alternatives and from customers to noncustomers of the industry”
By looking across alternatives, however, Casella Wines, an Australian winery, redefined the problem of the wine industry to a new one: how to make a fun and nontraditional wine that’s easy to drink for everyone.
Example of us wine industry
Four actions framework
Southwest Airlines Low Price Short Routes
No Frills Point-to-Point One Aircraft:
Boeing 737 High number of
Aircraft per Route No Meals Flexible/ Lower Staffing Cost focus
American Airlines Premium Price Short, Long, & Int’l Variety
Hub & Spoke System Multiple Aircraft Low number of
Aircraft per Route Meals & Service Higher Staffing Differentiation focus
The Eliminate-Reduce-Raise-Create Grid
SIX PATHS FRAMEWORK
Industry 1Industry 2
Industry 3
Untapped market
New product
Reconstruct the boundaries of industry
THANK YOU FOR YOUR ATTENTION!
