Team 3 – Hayley Jacobs, Paige Adams, Dan Lawson, Gage Mitchell, Laura Freeman, Haley Smith

 What are blue oceans?  How do you create a blue ocean?  Why are blue oceans important?  What is value innovation? Learning Objectives

“Creating uncontested new market space that makes the competition irrelevant.”

New Market Spaces Blue Untapped market space Demand creation Opportunity for highly profitable growth Most blue oceans are created from within a red ocean Little practical guidance exists on how to create them Risky from a business standpoint Red Represents all industries already in existence Industry boundaries are defined and accepted Competitive rules of the game are known Companies try to outperform rivals The more competition there is, the slower growth becomes Will always be necessary

Creation of Blue Oceans  Blue oceans have evolved over time  Standard Industrial Classification (SIC) system vs. North American Industry Classification Standards (NAICS) system  Ten sectors into twenty  Service sector expanded into seven

What Blue Oceans have been created in our lifetime?

Rising Imperative of Creating Blue Oceans  Price vs. Brand Loyalty Nike vs. Adidas  Technology innovation leads to supply exceeding demand  Shrinking profit margin

From Company and Industry to Strategic Move In Search of Excellence, Built to Last, and Creative Destruction “Stable excellent visionary companies” tend to fall quickly Strategic move: a move that delivers goods and services that opens and captures new market spaces Strategic move is the unit of analysis for blue oceans Blue oceans are in all industries Not predominantly in any one industry according to the authors

Value Innovation Focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.  Value without Innovation is not sufficient  Innovation without Value is not considerate of buyers  ISQS Tucker: The Man and His Dream

What to Consider in Value Innovation  The whole system  Differentiation and Low Cost – Blue Oceans use both strategies  Apple vs. HP Cost Buyer Value Value Innovation

Structuralist vs. Reconstructionist Standard view of business Contains standards and guidelines Create new “best practice” Breaks existing value-cost trade-off

Conclusion Blue Ocean Strategy will always contain both opportunity and risk Managers are concerned about the risks and don’t take the opportunity Red oceans will continue even as Blue Ocean Strategy becomes urgent