1. Turn back the clock Which industries did not exist? 100 years 50 years

2. You may ask what Cirque du Soleil has to do with Blue Ocean BUSINESS STRATEGIES….If you have been a cirque du soleil show, you know it is like nothing like a traditional circus OR a traditional theater experience. And that is why they are a )click) good example of Blue Ocean Strategy…..

3. Cirque du Soleil Blue Ocean Strategy
Creating Uncontested Market Space and Making the Competition Irrelevant
An that is exactly why Cirque du Soleil has everything to do with Blue Oceans….
Blue Ocean Strategy
Cirque du Soleil

4. Red Ocean Strategy Blue Ocean Strategy
Cirque du Soleil broke the best practice rule of the circus industry,
achieving both differentiation and low cost by reconstructing
elements across existing industry boundaries.In the red ocean, differentiation costs because
firms compete with the same best-practice rule. Here, the
strategic choices for firms are to pursue either differentiation or
low cost. In the reconstructionist world, however, the strategic aim
is to create new best-practice rules by breaking the existing value cost
trade-off and thereby creating a blue ocean. (For more discussions
on this, see appendix B, “Value Innovation: A Reconstructionist
View of Strategy.”)
elements across existing industry boundaries.

5. Summary of Blue Ocean Strategy
New Market Space
Continuing Creation of Blue Oceans
Impact of Creating Blue Oceans
Rising Imperative of Creating Blue Oceans
From Company and Industry to Strategic Move
Value Innovation
Formulating and Executing Blue Oceans
Create Uncontested Market Space
Make the Competition Irrelevant

6. Continuing Creation of Blue Oceans
New Market Space
Creating Blue Oceans Is Consistent Across Time Regardless of Industry
Ford’s 1908 Model T
CNN 1980
Real-Time News 24/7
2002 Apple’s ipod
1970 The First Mouse
We studied more than one hundred fifty strategic moves made from 1880 to 2000 in more than thirty industries, and we closely examined the relevant business players in each of these events. Industries ranged from hotels, the cinema, retail, airlines, energy, computers, broadcasting, and construction to automobiles and steel. We analyzed not only winning business players who created blue oceans but also their less successful competitors.study shows that the strategic move, and not the company or the industry, is the right unit of analysis for explaining the creation of blue oceans and sustained high performance
Continuing Creation of Blue Oceans

7. Impact of Creating Blue Oceans

8. Rising Imperative of Creating Blue Oceans
Driving forces include:
Technological advances & improved industrial productivity
Unprecedented array of products and services available
Supply exceeds demand
Globalization, niche markets and monopolies disappear
20th century strategy and management approach waning

9. Formulating and Executing Blue Oceans

10. From Company and Industry to Strategic Move
Value Innovation, Blue Oceans Cornerstone
Cost savings are made by eliminating
and reducing the factors an industry competes on. Buyer value is lifted by raising and
creating elements the industry has never offered. Over time, costs are reduced further as
scale economies kick in due to the high sales volumes that superior value generates.
By offering unprecedented
utility, Cirque du Soleil has created a blue ocean and
has invented a new form of live entertainment, one that is markedly
different from both traditional circus and theater. At the same time,
by eliminating many of the most costly elements of the circus, it has
dramatically reduced its cost structure, achieving both differentiation
and low cost. Le Cirque strategically priced its tickets against
those of the theater, lifting the price point of the circus industry by
several multiples while still pricing its productions to capture the
mass of adult customers, who were used to theater prices.
As shown in figure 1-2, the creation of blue oceans is about driving
costs down while simultaneously driving value up for buyers.
This is how a leap in value for both the company and its buyers is
achieved. Because buyer value comes from the utility and price
that the company offers to buyers and because the value to the company
is generated from price and its cost structure, value innovation
is achieved only when the whole system of the company’s utility,
price, and cost activities is properly aligned. It is this whole-system
approach that makes the creation of blue oceans a sustainable
strategy. Blue ocean strategy integrates the range of a firm’s functional
and operational activities.

14. The Paradox of strategy
The very language of strategy is deeply imbued with military references - chief executive "officers" in "headquarters,“ "troops" on the "front lines."
Described this way, strategy is all about red ocean competition. It is about confronting an opponent and driving him off a battlefield of limited territory.
Blue ocean strategy, by contrast, is about doing business where there is no competitor. It is about creating new land, not dividing up existing land.

16. The Simultaneous Pursuit of Differentiation and Low Cost
A blue ocean is created in the region where a company's actions favorably affect both its cost structure and its value proposition to buyers. Cost savings are made from eliminating
and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in, due to the high sales volumes that superior value generates.
The Simultaneous Pursuit of Differentiation and Low Cost

17. The Book and the Authors
Prof Renee Mauborgne
© JOHN ABBOTT
Prof Chan Kim

18. Accolades
Over 2 million copies sold
Translated into over 41 foreign languages – a world record
Taught as the major theory of strategy at leading business schools
Gives insights to CEOs, Executives, Heads of State and Prime Ministers

19. What is the Blue Ocean? High profit growth at low risk
Industries not in existence today
Untapped market demand
Unknown market space

20. Summary Conventional Logic Blue Ocean Logic Industry Assumption
Industry conditions are given
Industry condition can be shaped.
Strategic
Focus
Build competitive advantages to beat the competition.
Create a quantum leap in buyer value to dominate the market.
Customers
Retain and expand the customer base through further segmentation and customization.
Think in terms of embracing customer differences.
Go for the mass of buyers and willingly let some existing customers go. Think in terms of embracing key customer value commonalities.

21. Summary Conventional Logic Blue Ocean Logic Assets & Capabilities
Think in terms of a company’s existing assets and capabilities.
Build on what it has.
Think free from a company’s existing assets and capabilities.
Ask, what if we start anew?
Product/
Service
offerings
Think in terms of products/services offered by the industry. Seek to maximize the value of these offerings.
Think in terms of buyers’ solution even if that transcends the industry. Seek to solve buyers’ major bottlenecks/chief compromises in using the products/services of the industry.

22. Four Actions to create a Blue Ocean
What factors should be raised well beyond the industry standard?
Raise
What factors should be eliminated that the industry has taken for granted?
Eliminate
What factors should be created that the industry has never offered?
Create
What factors should be reduced well below the industry standard?
Reduce