1. Blue Ocean Strategy Chapter 4: Focus On The Big Picture, Not The Numbers
Group 1
Tara Ferguson
Jt Lehotsky
Taylor Skidmore
Sunny To

2. Next Question After knowing the paths to creating blue oceans
“How do you align your strategic planning process to focus on the big picture and apply these ideas in drawing your company’s strategy canvas to arrive at a blue ocean strategy?”
Most companies’ strategic planning process back to red ocean = compete within existing market space

3. Why so serious? Typical strategic plan.
Current industry conditions & competitive situations
How to increase market share, capture new segments, cut loss  goals & initiatives
Attached budget, graphes, ect…
Data provided by people various parts of organization w/ conflicting agendas & poor communication
Managers do what?
Result: Oh so… not good! – managers paralyzed, employees no idea
Closer look  no plan? Tactics w/ no direction

4. Focus on the Big Picture, Not the Numbers!!!
Drawing a strategy canvas, build strategic planning process around it:
Visualize a company’s current strategic position
Chart future strategy
Managers and employees focus on the big picture > numbers and jargon and details
How?
Shows the strategic profile of an industry by depicting very clearly the factors that affect competition among industry players
Shows the strategic profile of current and potential competitors, indentifying which factors they invest in strategically
Shows the company’s strategic profile (value curve): how it invests in the factors of competition and how it might invest (w/ all 3 qualities: focus, divergence, and a compelling tagline)

5. Drawing strategy Canvas
Assessing to what extent your company and its competitors offer the various competitive factors = challenging
w/in own responsibilty = ok
The whole industry = hard
Ex: catering manager of an airline & refreshment vs. customers & the complete offering
Ex: CIO & the company’s IT infrastructure for its data- mining capacity vs. customers & speed, ease of use
Drawing strategy canvas is awfully hard

6. So what to do?
Last ten years, a structured process for drawing and discussing a strategy canvas  blue ocean
150-year-old financial services group- European Financial Services adopted this process to develop a strategy that breaks away from the competition  30% revenue boost in its initial year
Process builds on the 6 paths of creating blue oceans & has a lot of visual stimulation to unlock people’s creativity = 4 major steps

8. Step 1: Visual Awakening
Common mistakes
Discussing changes in strategy before resolving differences of opinion about the current state of play
Reluctance to the need of change
Then how do you get around to making changes?

9. European Financial Services
Poorly communicated strategy
Deeply divided among regional subsidiaries and corporate executives
Asked to chart their company’s strategy – but found that they must first reach a common understanding of their current position
20 + senior managers
Team 1 – Produce a value curve for EFS’s current strategic profile in traditional corporate foreign exchange business relative to competitors
Team 2 – Produce the same but for EFS’s emerging online foreign exchange business

10. What constituted a competitive factor and what are those factors?
Both teams dealt with heated debated because of different opinions
Europeans – EFS had to offer consulting services on risk management
Americans – Stressed the value of speed and ease of use
Other – Customers would be drawn in by the promise of instant confirmation of their transactions
Presented their work – Revealed defects
Lack of focus
Investing in diverse and numerous factors in both businesses
Both were very similar to competitors
Neither team could create a tagline to match their value curve
Contradictions

13. “How Google Grows..and Grows..and Grows” by Keith Hammonds 2007
“Instead, we went into the ranks and talked with the project managers and engineers who make Google tick. Here's what we learned...”
Rule 1: The User is in Charge
“Google tracks the outcome of a huge sample of the queries that we throw at it. What percentage of users click on the first result that Google delivers? How many users click on something from the first page?
If you can do something that will improve the user's experience, do it…. It obsesses over search-traffic figures, and it reads its .
In fact, 10 full-time employees do nothing but read s from users, distributing them to the appropriate colleagues or responding to them themselves.”
“How Google Grows..and Grows..and Grows” by Keith Hammonds 2007

14. Step 2: Visual Exploration
Go into the field to explore the 6 paths to creating blue oceans
Look across alternative industries
Look across strategic groups within industries
Look across the chain of buyers
Look across complementary product and service offerings
Look across functional or emotional appeal to buyers
Look across time
See what managers must make sense of – How people use or don’t use their products or services

15. Never outsource your eyes!
Talk to and watch Customers, Noncustomers, Users
Look at how they might find alternative ways of fulfilling the need that your product/service satisfies
Ex: Driving vs. flying
Google vs. local library or newspaper
Google vs. Yellow pages

16. EFS mangers in the field for 4 weeks
Observe 10 people in corporate foreign exchange
Lost customers
New customers
Customers of EFS’s competitors and alternatives
Companies who did not yet use corporate foreign exchange services
End users of corporate and foreign exchange services – the accounting and treasury departments
Ancillary products and services also used – pricing simulations

17. Results Sent back to the drawing boards
Each team had to create 6 value curves using the 6 path framework
Each had to depict a strategy that would make EFS stand out in its market and a tagline
Hopes to push the managers to break the boundaries of conventional thinking

18. Step 3: Visual Strategy Fair
Draw your “to be” strategy canvas based on insights from field observations.
The EFS teams presented their strategy canvases at the visual strategy fair to senior executives and external constituencies.
Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.

19. Step 3: Continued
EFS realized that one-third of what they had thought were key competitive factors were marginal to customers.
Used feedback to build the best “to be” future strategy.
EFS was able to draw a value curve that was truer to the existing strategic profile.

21. Eliminate-Reduce-Raise-Create
The Case of EFS
Eliminate
Relationship management
Raise
Ease of use
Security
Accuracy
Speed
Market commentary
Reduce
Account executives
Corporate dealers
Create
Confirmation
Tracking

22. Step 4: Visual Communication
Distribute your before and after strategic profiles to all employees for easy comparison.
Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

23. Visualizing Strategy at the Corporate Level

24. Using the Strategy Canvas
Blue Ocean companies have to communicate and not just worry about the numbers

25. Samsung Electronics Value Innovation Program (VIP)
At the conference projects are shared through presentations and exhibitions and awards are given to the best.
World’s leading 40” LCD TV in 2002
SGH T-100 worlds bestselling mobile phone

27. Pioneer- the businesses that offer unprecedented value. (RSS Feed)
Settlers- businesses whose value curves conform to the basic shape of the industry’s. (Google Images)
Migrators- lie somewhere in between Pioneers and Settlers. (Google Maps)

28. Strategic planning should be more about collective wisdom building than top-down or bottom-up planning.
It should be more conversational than solely documentation driven.