1 Planning Process Where are we now? What’s happening out there? Audit & Analysis, PEST & SWOT How will we get there? Objectives, Targets, Action Where do we want to be? Vision, Mission, Values, Goals How will we know? Monitor, Evaluate, Report Planning Process Your Planning Narrative

2 Compete in existing markets Beat the competition Exploit existing demand Make the value-cost trade-off Align the organisation to differentiation or low cost Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the organisation to differentiation and low cost Blue Ocean Red Ocean Kim, Chan W., and Mauborgne, Renee (2005) Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant Boston, Harvard Business School Press.

3 Value Innovation The Cornerstone of Blue Ocean Strategy Value Innovation Cost Buyer Value The simultaneous pursuit of differentiation and low cost.

4 Strategy Canvas and Value Curve Price Marketing Quality New Factors Prestige Factors Low High New Factors Red Ocean Average

5 Conventional Logic Blue Ocean Logic Industry Assumption Industry conditions are given Industry condition can be shaped. Blue Ocean Logic Strategic Focus Build competitive advantages to beat the competition. Create a quantum leap in buyer value to dominate the market. CustomersRetain and expand the customer base through further segmentation and customisation. Think in terms of embracing customer differences. Go for the mass of buyers and willingly let some existing customers go. Think in terms of embracing key customer value commonalities.

6 A Good Blue Ocean Strategy:- Focus Divergence Compelling Tagline

7 Six principles Formulation Reconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Execution Overcome key organisational hurdles Build execution into strategy

8 Reduce Which factors should be reduced well below the industry standard? Create Which factors should be created that the industry has never offered? Eliminate Which of the factors the industry takes for granted should be eliminated? Raise Which factors should be raised well above the industry standard? A New Value Curve The Four Actions Framework Reduce Cost Raise Demand Particularly eliminate and create to make the existing rules of competition irrelevant and move beyond competition onto new space…

9 Strategy Canvas and Blue Ocean Value Curve Price Marketing Quality New Factors Prestige Factors Low High New Factors Blue Ocean Red Ocean Average