Blue Ocean Strategy-Appendix A,B,C
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Transcript of Blue Ocean Strategy-Appendix A,B,C
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Blue Ocean Strategy-Appendix A,B,CMICHAL MEDRANOCASEY HARVEYMASON STONEJULIO GARCIACOURTNEY ELLISGLEN LESLYTRAVIS TEMPELROBERTO PADILLA
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Key Topics:• Open New market Space• Value Innovation- Linked to what buyers value• Competition• Buyer Value at an accessible price• Two Distinct Views on Industry Structure• Structuralist Strategies• Reconstructionist Strategy• Reconstruction & Recombination• Market Dynamics of Value Innovation Appendix C• Monopolies
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Automobile Industry• Started back in 1893• Woodrow Wilson said " the horseless carriage at the present is a
luxury for the wealthy. It will never come into consumer use as the bicycle.
The Model T• Henry Ford• Revolutionary Assembly Line• Market Share rose from 9% in 1908 to 62% in 1921
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General Motors
• 1924
• Strategy- Produce a car for every purse and purpose
• Buyers trade up for fashion and comfort
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Japanese Jump Into Blue Ocean
Opportunity• Small, Fuel Efficient cars• Cars made were the Honda, Toyota, and Nissan• Oil Crisis in the 1970's, Consumers flocked the Japanese cars
Chrysler• On edge of bankruptcy• Introduce the minivan• Ignites SUV market
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Two Distinct Views on Industry Structure Structuralist View – Has its roots in industrial
organization economicsIndustrial Organization
Reconstructionist View – built on theory of endogenous growth
Joseph A Schumpeter
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Structuralist Strategies
Structuralist – important implications often leads to competition-based strategic thinking.Leads to deciding whether or not to enter.
Leads firms to divide industries into attractive and unattractive one.
Decide whether or not to enter.
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Reconstructionist Strategy
Recognizing that structure and market boundaries.
Managers & Practitioners do not let this view limit their thinking
Creating Demand
Reordering existing elements
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Reconstruction & Recombination
A change in market structure
Stimulating the demand side
Cirque de Soleil
Reconstructing existing buyer value elements
Reconstruction & Recombination
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Market Dynamics of Value InnovationAppendix C
Value innovation vs. technology innovation Value innovation rapidly increases demand Lowers price and long run average costs
UnderArmour Submit and Idea
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Monopolies
Harm social welfare Charge high prices that exclude consumers Waste society’s resources-deadweight loss
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Conclusion:
Auto Industry Structuralist Reconstructionist Value Innovation and Monopolies