Blue Ocean Strategy

Blue Ocean vs. Red Ocean Strategy

Blue Ocean vs. Red Ocean Strategy Blue Ocean Strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Red Ocean Strategy Compete in existing market space Beat the competition Exploit existing demand.

Blue Ocean Strategy Tools Strategy Canvas Blue Ocean Strategy Tools A diagnostic tool for building a compelling blue ocean strategy. It captures the current “state-of-play” in the known market space Allows you to understand: Where the competition is currently investing The factors the industry currently competes on in product, service, and delivery What customers receive from existing competitive offerings in the market

Four Action Framework Eliminate Raise Reduce Create

Four Action Framework Eliminate Reduce Raise Create Which of the factors that the industry takes for granted should be eliminated? -------------------------------------------- Which factors should be reduced well below the industry standard? Which factors should be raised well above the industry standard? Which factors should be created that the industry has never offered? Reduce Raise Create

Four Action Framework: The Case of Cirque du Soleil Eliminate Reduce Star performers Animal Shows Aisle concession sales Multiple Show Arenas Fun and Humour Thrill and Danger

Four Action Framework: The Case of Cirque du Soleil Create Raise Theme Refined environment Multiple Productions Artistic Music and Dance Unique Venue

Six Principles of Blue Ocean Strategy Formulation Principles Reconstruct market boundaries Focus on the big picture- not the numbers Reach beyond existing demand Get the strategic sequence right Execution Principles Overcome organizational hurdles Build execution into strategy

Blue Ocean Activity In groups of two or three you are to head out into the community and investigate three different players in a certain market. ( i.e. Pizza Hut, Boston Pizza, and Colonnade Pizza are all in the Pizza Restaurant market). Your job is to compare these three competitors in the market and create a “Four Action Framework” to identify potential areas for new business. You must have visited your three competitors by Friday as we will work on these frameworks in class at that time. You will also present your frameworks to the class on Friday.