Chapter 3: Reconstruct Market Boundaries Group 4 Blue Ocean Strategy Chapter 3: Reconstruct Market Boundaries Group 4

6 Paths Framework Look across: Alternative Industries Strategic Groups Chain of Buyers Complementary Product Offerings Functional/Emotional Appeal Time

Path 1: Alternative Industries Compete with alternative products/services

Red Bull Example VS.

Path 2: Strategic Groups in Industries Unlock blue oceans Strategic groups: companies within industries

Red Bull Example Red Bull Cola

Path 3: Chain of Buyers Industries tend to focus on one group Retailers Purchasers Consumers Can create blue ocean by switching the norm. Novo Nordisk

Path 4:Complimentary Product Offerings Products value are affected by other products that are outside the industry focus. Movie Theaters Buses 5 Hour Energy vs. Red Bull Energy Shots

Path 5:Look Across Functional or Emotional Appeal to Buyers Functional and emotional appeals are embedded Functional- compete on price and function Emotional- compete on feelings of products/services Opportunity for Blue Ocean Companies and industries are normally embedded in either emotional or functional appeal.

Functional and Emotional Appeal How separate from a functional red ocean? Example: Starbucks and Cemex How to separate from a emotional red ocean? Example: QB House

Red Bull’s Emotional Appeal Blue Ocean Brand idea Lifestyle Sports Nightlife Youth

Path 6: Look Across Time External trends affect companies Most act passively and adapt incrementally Trends that have affected companies Example: internet and protecting the environment.

Look Across Time Opportunity for Blue Oceans Future Telling? Systematic Approach Decisive Irreversible Clear Trajectory Example: Apple and Sex and the City

Red Bull’s Look Across Time Social Media Explosion Cohesive with brand image and target market Facebook 22 million “likes” Twitter 729,000 followers