2. Chapter 1: Blue Ocean Strategy - Who is Guy Laliberte? - What did he do? - - Why did he do it? What was the state of the circus business at the time? Alternative forms of entertainment – game consoles PETA, expensive animals, Trainers, trains What is New Market Space and how is it created? ANSWER: By appealing to an entirely new set of customers Adults, Theater Go-ers, Corporate clients at higher prices ANSWER: Stop competing

15. Cha-Ching

17. Blue vs. Red Ocean Competition is irrelevant in Blue Oceans, since the rules of the game are waiting to be set We need an “Analytic framework” Let’s look back first!

18. The Blue Ocean The term Blue Ocean is new, their existence is not Look back 100 years….. Cars, Music recording, Aviation, Petrochemicals, Health care were unheard of Now look back just 30 years See multi-billion dollar companies jump out, such as mutual funds, cell phones, personal computers, express delivery, snowboards, etc. Now think forward 30 years and try to imagine what kind of companies will exist

20. A study of 108 companies in both profit and revenue showed the following fascinating results;

21. Blue Ocean Strategy Why create Blue Oceans Technology improved productivity Unprecedented array of products and services Supply to exceed demand Dramatic decrease in prices Commoditization – price wars – brand blurring Are there “excellent” or “visionary” companies? “Managing the Edge” 66% of the companies were gone in 2 years

22. Blue Ocean Strategy Step- 1 Strategic Moves Managerial actions that make a major market- creating business offering Compaq and HP Step 2: Value Innovation Increase Buyer Value Decrease Costs Both Value AND Innovation Align Innovation with Utility, Price & Cost Defy “value-cost trade off”

23. Competition is not the benchmark Cost savings are made by eliminating and reducing Buyer value is lifted by raising and creating Value Innovation is differentiation and low cost

24. Defies the value-cost trade-off Offers a better solution to the problems of the current business Fun and thrill + sophistication and richness Married the Circus and the Theatre Glamorized the tent, changed clowns and put in great seats

26. Blue Ocean Strategy

28. Reconstruct market boundaries Search Risk Focus on the big picture, not the numbers Planning Risk Reach beyond existing demand Scale Risk Get the strategic sequence right Business Model Risk Overcome key organizational hurdles Organization Risk Build execution into a strategy Management Risk Execution Principles Execution Risk