Get the Strategic Sequence Right Chapter 6 Blue Ocean Strategy By: Laura Carr, Brad Klingberg, Ike Huestis, Treanne Turner

Summary

Get the Strategic Sequence Right 4 th principal Fleshing out and validating blue ocean ideas ▫Ensure commercial viability Understand the right commercial sequence How it asses blue ocean ideas ▫Dramatically reduce business risk

The Right Strategic Sequence Buyer utility Price Cost Adoption

Buyer Utility Does your offering unlock exceptional utility? Is there a reason for a mass number of people to buy it? ▫No? there is no blue ocean potential  Rethink it or get rid of idea ▫Yes?  Continue to step two

Price Price to create demand Product priced to create or attract target buyers so they have ability to pay for the product? ▫No? Customers can't buy it and will not last in market

Cost Can you make a profit on the product? ▫Easily accessible to target buyers Don’t let cost drive price

Adoption What are the adoption hurdles in making your business idea actually happen? Need to address up front

Stages of Buyers Experience Cycle Purchase- how long does it take Delivery- get product delivered Use- training or experience? Supplements-other products Maintenance- easy to maintain? Disposal- waste items? Dispose?

Utility Layers (cont.) Unlock exponential utility for buyers Productivity- so things faster Simplicity- easy to use? Convenience- easy to obtain? Risk- reduce customers financial, physical, or credibility Fun and image- like product? Environmental Friendless

Strategic Pricing (Cont.) Step 1: Identify the Price Corridor of the Mass ▫Different form, same function (i.e. Ford’s Model T vs. horse-drawn carriage) ▫Different form and function, same objective (i.e. Cirque du Soleil vs. restaurants/bars)

Strategic Pricing (Cont.) Step 2: Specify a Level Within the Price Corridor ▫The degree to which a product/service is legally protected through patents or copyrights ▫The degree to which the company owns some exclusive asset or core capability (i.e. expensive production plant)

Strategic Pricing (Cont.)

Target Costing Streamlining & Cost Innovations Partnering Pricing Innovation

Target Costing

Adoption Employees Business Partners The General Public

The Blue Ocean Idea Index

Summary of other Chapters

SMaC Recipe Specific, Methodical, and Consistent Includes what to do and what not to do A great company must evolve its recipe, revising selected elements when conditions merit, while keeping most of its recipe intact.

Amending the SMaC Recipe 2 approaches: ▫Exercising empirical creativity ▫Exercising productive paranoia

Property Rights Patents Copyrights Trademarks Trade Secrets

Dish Network

The First and Only Interactive Golf Store

How is it Different? On-staff PGA and LPGA Professionals On-Site Certified Club Technicians Golf Course Simulators Indoor driving bay On-site full-sized bent-grass putting green

Buyer Utility Purcha se Delive ry Us e Suppleme nts Maintena nce Dispos al Customer Productivity Simplicity XX Convenience Risk Fun and Image Environment al friendliness X

Strategic Pricing: Identify the Price Corridor of the Mass People usually buy their equipment and get tips/lessons separately. In order to attract customers, pricing must be compared to that standard.

Strategic Pricing: Specifying a Level in the Price Corridor Nonrival good: The idea of a interactive golf store can be imitated No legal protection but some resource protection PGA and LPGA pros are hired for Gold Galaxy only Lower to middle level pricing is optimal

Target Costing Streamlining: Pros can advise what equipment to buy as well as give lessons, giving customers more for the same cost. Partnering: Suppliers with high margin brand name products get specialty treatment, such as better product placement.