Clay Dibrell, Ph.D. Associate Professor of Strategic Management, Oregon State University Blue Ocean Strategy

Blue ocean –Uncontested market space. Red ocean –Contested market space. Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

Red Ocean vs. Blue Ocean Strategy Red Ocean Strategy Compete in existing space. Beat the competition. Exploit existing demand. Make the value/cost trade-off. Align the whole system of company’s activities with its strategic choice of differentiation or low cost. Blue Ocean Strategy Create uncontested market space. Make the competition irrelevant. Create and capture new demand. Break the value/cost trade- off. Align the whole system of a company’s activities in pursuit of differentiation and low cost. Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

So What? Results of Their Study (n = 108 firms) New Venture Launches Created Revenue Derived Profits 14%86% 61% 62% 39% 38% Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

Attributes of a Blue Ocean Who sails in blue ocean? –Often incumbent firms What is the driver of technology pioneering? –Value Pioneering vs. Technology Pioneering Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

Attributes of a Blue Ocean Blue oceans are not about technology innovation. Incumbents often create blue oceans, usually within their core businesses. Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

Attributes of a Blue Ocean Company and industry are wrong units of analysis. The power of creating blue oceans builds brands. Kim, W. C. & Mauborgne, R Blue Ocean Strategy. Harvard Business Review, 82(10):

Dealing with Darwin by Geoffrey Moore

Disruptive Innovation Application Innovation Product Innovation Platform Innovation Enhancement Innovation Integration Innovation Experiential Innovation Process Innovation Marketing Innovation A Broad Universe of Innovation Types Value Migration Innovation Line Extension Innovation Value Engineering Innovation Harvest & Exit Renewal Innovation Organic Renewal Acquisition Renewal

Disruptive Innovation Application Innovation Product Innovation Platform Innovation Innovation Types for Growth Markets The Product Leadership Zone

Innovation Types for Growth Markets Product NewExisting Market New Existing Disruptive Innovation Product Innovation Application Innovation Platform Innovation

Experiential Innovation Marketing Innovation Innovation Types for Mature Markets The Customer Intimacy Zone Customer Intimacy Zone Enhancement Innovation Line Extension Innovation

Innovation Types for Mature Markets The Operational Excellence Zone Integration Innovation Process Innovation Value Migration Innovation Value Engineering Innovation Operational Excellence Zone

Innovation Types for Declining Markets Leveraging Category Renewal Harvest & Exit Category Renewal OrganicAcquisition

Core & Context ContextCore

Core/Context Analysis Framework Core Process creates differentiation that wins customers Context All other processes Mission Critical Process shortfall creates serious and immediate risk Non-Mission-Critical All other processes Differentiation Risk

Critical Questions to create wealth generating activities. Where and in what ways is change creating the potential for new rules and new space? What is the potential for revolution inherent in the things that are changing right now, or have already changed? What are the discontinuities we could exploit? Hamel, Gary Leading the Revolution. Harvard Business School Press, Boston.

Critical Questions to create wealth generating activities. What aspect of what’s changing can we come to understand better than anyone else in our industry? What’s the deep dynamic that will make our new business concept oh-so-relevant right now? (Hamel, 2000) Hamel, Gary Leading the Revolution. Harvard Business School Press, Boston.

Additional Information RM RM