Chapter 4: Focus on the Big Picture, Not the Numbers Blue Ocean Strategy By: W. Chan Kim and Renee Mauborgne Team 1 MGT 4380 – 001 Patrick Morales, William Turner, Becky Alvarado, Christopher Mathis, Jared Stowe

Introduction  How to align your strategic planning process  Focus on the big picture  What is a strategic canvas  Advantages of a strategic canvas

 Step 1: Visual Awakening  Step 2: Visual Exploration  Step 3: Visual Strategy Fair  Step 4: Visual Communication The Four Steps of Visualizing Strategy

Step 1: Visual Awakening  Most strategy starts without a clear picture of company’s current state  European Financial Services(EFC) example:  2 teams, 90 minutes each  Strategy canvases revealed defects in company’s strategy

Step 1: Visual Awakening  Takeaway: EFS strategy lacked focus and had contradictions  Allowed EFS management to proceed in the strategic planning process

Step 2: Visual Exploration  Send managers into the field  How people use or don’t use their products or services  Michael Bloomberg  Complimentary products  A company should never outsource it’s eyes  EFS Field Research  Account Relationship Managers  Speedy confirmation

Step 3: Visual Strategy Fair  Teams presented multiple strategy canvases at visual strategy fair  Each canvas received votes for and against  Allowed EFS to narrow down their strategy to common competitive factors  Allowed EFS to make:  Before and After strategy canvas  Eliminate-Reduce-Raise-Create grid

Step 3: Visual Strategy Fair  Eliminate-Reduce-Raise-Create grid Eliminate Relationship Management Raise Ease of use Security Accuracy Speed Market Commentary Reduce Account Executives Corporate Dealers Create Confirmation Tracking

Step 4: Visual Communication  Communicate strategic vision to employees  What needs to be eliminated, reduced, raised, and created  Create reference point for all investment decisions  Decisions must further strategic vision

The Strategy Canvas of American Apparel and Competitors High Low

Visualizing Strategy at the Corporate Level  Visualizing strategy can inform the dialogue among businesses and corporate centers when transforming from red ocean to blue ocean

Using the Strategy Canvas  Samsung strategy canvases at 2000 corporate conference  Seventy top managers including the CEO  Established Value Innovation Program (VIP) in 1998 as a strategy canvas

Using the Strategy Canvas  VIP Program assists the units in making product and service decisions  Program branches out to meet business units’ rising demands  The 40 inch LCD TV, launched in 2002, is a result of efforts made at the center

Using the Strategy Canvas  VIP Projects shared through presentations and exhibitions at the corporate conference  Awards given to the best cases  Establish a common language system that drives its portfolio from red to blue ocean

Pioneer-Migrator-Settler Map  Pioneers: businesses that offer unprecedented value (blue ocean strategists)  Settlers: businesses whose value curves conform to the industry  Migrators: offer improved value, but not innovative value (red and blue ocean)

Conclusion  Collective wisdom over top down or bottom up processing  Focus on the big picture  Let the numbers fall in place