Introduction to Blue Ocean Strategy Strategy where you consciously target an uncultivated blue market rather than attempting to manage the tough competition on the red market, where your competitors are. Source: Blue Ocean Strategy by W. Chan Kim & Renee Maubourgne www.blueoceanstrategy.com

Blue Ocean Strategy Red Ocean Strategy Blue Ocean Strategy Competes on existing markets Create a new uncultivated market Beat competition Make competition irrelevant Exploit the existing demand Create and capture new demand Trade-off between value/price No trade-off between value/price Adjust all of the company’s activities for the sake of either differentiation or low costs Adjust all of the company’s activities for the sake of both differentiation and low costs

Six ways towards blue ocean strategy Industry Strategic group Purchase group Extent of offer of product or service The industry’s functional-emotional orientation Time From competing with To creating across

Example of a strategy canvas The blue line shows how a blue strategy can separate itself radically from the traditional red strategies.

Four actions framework A new value curve Reduce Which factors should be limited considerably below the industry standard? Create Which factors should be created that the industry have not thought of before? Raise Which factors should be raised considerably above the industry standard? Eliminate Which factors that the industry take for granted should be eliminated?

Risk minimization and opportunity maximization in the formulation and implementation of blue ocean strategy Formulation principles Formulation risks Recreate market limitations Search risk Focus on ”the big picture” not on numbers Planning risk Exceed the existing needs Scale risk Ensure that the strategic order is right Business model risk Implementation principles Implementation risk Overcome central organizational resistance Organizational risk Integrate implementation and strategy Management risk