Blue Oceans
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Blue Ocean Strategy Blue Ocean Strategy How to Create Uncontested Market Space How to Create Uncontested Market Space and Make the Competition Irrelevant and Make the Competition Irrelevant BY M .SHANTI REDDY( 23) P.M. VAMSI VARMA (27) R. KRISHNA CHAITANYA (31) T. SWATHI (38)
Transcript of Blue Oceans
Blue Ocean StrategyBlue Ocean StrategyHow to Create Uncontested Market SpaceHow to Create Uncontested Market Space
and Make the Competition Irrelevantand Make the Competition Irrelevant
BYM .SHANTI REDDY( 23)P.M. VAMSI VARMA (27)
R. KRISHNA CHAITANYA (31)T. SWATHI (38)
Two worlds …
Two worlds …
Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space.
Create uncontested market space.
Beat the competition. Make the competition irrelevant.
Exploit existing demand. Create and capture new demand.
Make the value-cost trade-off. Break the value-cost trade-off.
Align the whole system of a strategic firm's activities with its choice of differentiation or low cost.
Align the whole system of a firm's activities in pursuit of differentiation and low cost.
VALUE INNOVATION
The rising Imperative of Creating Blue Oceans
• supply exceeds demand
• globalization
• accelerated commoditization of products and services
• increasing price wars
• shrinking profit margins
• brands are becoming more similar
select based on price
• ...
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Reconstruct market boundaries
IndustryFocuses on rivals within its industry
Strategic GroupFocuses on competitive position within strategic group
Buyer GroupFocuses on better serving the buyer group
Scope of Product and Service
Offerings
Focuses on maximizing the value of product and service offerings within the bounds of its industry
Functional-emotional Orientation of an
Industry
Focuses on improving price-performance with the functional-emotional orientation of this industry
Time/TrendsFocuses on adapting to external
trends as they occur
Looks across alternative industries
Looks across strategic groups within its industry
Redefines the buyer group of the industry
Looks across to complementary product and service offerings that go beyond the bounds of its industry
Rethinks the functional-emotional orientation of its industry
Participation in shaping external trends over time
Boundaries of Competition
Head-to-HeadCompetition
Creating New Market Space
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Reach beyond existing demand
Core Customer Noncostumer
Soon-to-be-NCRefusing Customer
BOS Logic: The Core Principles
Reconstruct Market Boundaries… overcome believes.
Reach beyondexisting Demand… go for uncontested space.
Get the strategic sequence right… value [innovation] first.
VIVI
COST
VALUE
BOS Logic: Get the Strategic Sequence right
Buyer utility
Is there exceptional buyer utility in your business idea?
Adoption
What are the adoption hurdles in actualizing your business idea?
Are you addressing them up front?
Price
Is your price easily accessible to the mass of buyers?
Cost
Can you attain your cost target to profit at your strategic price?
A commercially viable Blue Ocean Strategy
YES
YES
YES
YES
No Rethink
No Rethink
No Rethink
No Rethink
Continuing Creation of Blue OceansContinuing Creation of Blue Oceans
Ford’s 1908 Model T
CNN 1980 Real-Time News 24/7
QuickTime™ and aTIFF (Uncompressed) decompressor
are needed to see this picture.
2002 Apple’s ipod
QuickTime™ and aTIFF (Uncompressed) decompressor
are needed to see this picture.
1970 The First Mouse
New Market Space New Market Space Creating Blue Oceans Is Consistent Across Time Creating Blue Oceans Is Consistent Across Time
Regardless of IndustryRegardless of Industry
Impact of Creating Blue OceansImpact of Creating Blue Oceans
Formulating and Executing Blue OceansFormulating and Executing Blue Oceans
Value Innovation, Blue Oceans CornerstoneValue Innovation, Blue Oceans Cornerstone
From Company and Industry to Strategic MoveFrom Company and Industry to Strategic Move
Summary of Blue Ocean StrategySummary of Blue Ocean Strategy
New Market Space New Market Space
Continuing Creation of Blue OceansContinuing Creation of Blue Oceans
Impact of Creating Blue OceansImpact of Creating Blue Oceans
Rising Imperative of Creating Blue OceansRising Imperative of Creating Blue Oceans
From Company and Industry to Strategic MoveFrom Company and Industry to Strategic Move
Value InnovationValue Innovation
Formulating and Executing Blue OceansFormulating and Executing Blue Oceans
3 Things I’ve Learned3 Things I’ve Learned
1.1. Blue Oceans aren’t always accepted at firstBlue Oceans aren’t always accepted at first
2.2. Blue Oceans can be profitableBlue Oceans can be profitable
What I Disagree WithWhat I Disagree With
That there exists a strategic framework for Blue That there exists a strategic framework for Blue
Oceans. By nature they do not conform to one frameworkOceans. By nature they do not conform to one framework
Examples of blue Ocean Strategy
Air Asia in Malaysia.
LG.
Air Asia in Malaysia.
Eliminate:* Over the counter booking system* Free Food/Beverage on the plane* Seating Class booking system
Reduce :* "luxury" facilities provided by Airport
Lounge* No of attendance service on the plane* Seat Quality
Raise:* Focus on several key destination* Increase frequency of flightCreate :* Online Booking system* Point to point travel system The successful implementation of this
Blue Ocean, Air Asia have venture into other businesses such as Tune Hotel and Tune Money.
LG'Chocolate' (LG KG800).LG plans to double its sales volume and
profit by 2010, with 30% of sales and 50% of its profit being derived through "innovative, category-creating Blue Ocean Products“.
The way LG understands it, Blue Ocean strategy is "about an epoch-making move to strengthen business capabilities and streamline business structure in the five arenas of products, business models, work, systems and human resources."
In Korea, where LG Chocolate was launched last November, sales have
exceeded 400,000 units. It was also a sellout in Europe when it was launched on May 3. In Malaysia, 3,500 units have
gone out to the retail channels during the pre-launch where the target was only
5,000 units.
Blue Ocean Strategy up-and-comers. B2C (Business-to-Consumer) Examples
Crocs, Inc. ING Direct Commerce Bank More Coming Soon
B2B (Business-to-Business) Examples Boeing's 787 Dreamliner RIM's BlackBerry VistaPrint More Coming Soon
Non-Profit & Public Sector Examples Kiva.org LAPD
Historical Blue Ocean Strategic Move Examples Muzak More Coming Soon
Blue Ocean Strategy Up-And-Comers Tesla Motors Bunkspeed's HyperShot
Are you ready to Are you ready to dive…..???dive…..???
