Chapter 2: Analytical Tools and Framework Team 6 Garrett Johnathan Alex Allison Chapter 2: Analytical Tools and Framework

Strategy Canvas Compares core competencies for competition Both a diagnostic and an action framework for building a compelling blue ocean strategy. It serves two purposes: 1. captures the current state of play in the known market space which allows you to understand where the competition is currently investing. 2. Offering level that buyers recevie across all these key competing factors.

Strategy Canvas in Blue Ocean Focus on: Move focus from competitors to alternatives Move focus from customers to noncustomers Don’t Focus on: Offer more for less Choose between differentiation and cost leadership To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategic focus from competitors to alternatives, and from customers to noncustomers of the industry. This will help you gain insight into how to redefine the problem the industry focuses on and thereby reconstruct buyer value elements that reside across industry boundaries.

The Four Actions Framework

The Four Actions Framework Eliminate- the first question ask you to look at your competition and how you can eliminate factors that you have long competed on Reduce- this factor forces you to look at overdesign of product and over serving customers Raise- here you must eliminate compromise Create- discover new sources and create new demand

[yellow tail]’s Framework Eliminate Reduce Wordy terminology / distinctions Aging quantities Above-the-line marketing Wine complexity Wine range Vineyard prestige

[yellow tails]’s Framework Raise Create Price versus budget wines Retail store involvement Easy drinking Ease of selection Fun and adventure

Subway’s Framework Eliminate Raise Reduce Create Unhealthy atmosphere Food standards Reduce Sugary drinks, fatty sandwiches Create Fresh fit combo meal

Three Characteristics of a Good Strategy [yellow tail] Focus Easy Drinking, Ease of Selection, Fun/Adventure Divergence Set themselves apart as a new, laid back wine Compelling Tagline “Go-To” Conveyed as America’s go to wine No knowledge of classified wine necessary

Three Characteristics of a Good Strategy Focus Divergence Compelling Tagline These serve as an initial litmus test of the commercial viability of blue ocean ideas

FOCUS Identify key factors of competition Choose on factor EX: Southwest Airlines Quality, Speed, Price, Innovation… Choose on factor Focus on that one factor

DIVERGENCE Break out of the common competing Techniques Price wars, meals, seating Revolutionize the industry Point-to-point travel between midsize cities Previously: hub-and-spoke systems Make changes to the way things done in the industry EX: Southwest Airlines

COMPELLING TAGLINE What is a tagline? Tagline should be: “The speed of a plane at the price of a car-whenever you need it.” What is a tagline? A short descriptive phrase Tagline should be: Short and Clear Truthful Updated EX: yellowtail A fun and simple wine to be enjoyed every day

The Strategy Canvas

Reading the Value Curves 1st question value curves answer is does the company deserve to be a winner? Does it meet the three criteria: focus, divergence, and compelling tagline A business does not want it’s value curve to converge with that of its competitors Does your company’s value curve show high levels across all factors?

Reading the Value Curves Incoherent strategy: company does not have one main goal, but has many independent sub strategies Are there strategic contradictions? Is your company internally driven? Inside-out strategy or outside-in strategy?

Key Points Diagnostic and Action Framework for building a compelling strategy Create unique identity and value Use the Four Actions Framework to create a new value curve Focus on one key competitive factor and differentiate yourself from your industry Using the value curve can help reveal strategic information that can aid a company in gaining market share and becoming a powerhouse in their industry