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Blue Ocean Strategy What’s it all about?.

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Presentation on theme: "Blue Ocean Strategy What’s it all about?."— Presentation transcript:

1 Blue Ocean Strategy What’s it all about?

2 - Blue Oceans – definitions and examples
- Formulating Blue Ocean strategies - Executing Blue Ocean strategies - key take aways

3 Blue Oceans – definitions and examples
Red Ocean Blue Ocean Compete in existing mtks Create uncontested mkt space Beat the competition Make the comp irrelevant Exploit existing demand Create and capture new demand Make the value cost trade off Break the value cost trade off Costs Value Innovation Examples of “blue Ocean” Cirque du Soleil Apple Ryan Air (European Low cost airline) Value Innovation “instead of focusing on beating the competition focus on making the competition irrelevant by creating a leap in value for the customer “must align innovation to utility, price and cost and must time entry accordingly” Of all business launches in 108 companies studied 86% line extensions (red ocean) – 62% total revenue and only 39% profit 14% - “blue ocean” releases – 38% revenue and 61% profit Buyer Value

4 Formulating Blue Ocean Strategy
Formulation Principles Reconstruct Market Boundaries Focus on big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Overcome key org hurdles Build execution into the strategy Choosing which “factors” to attack (industry specific – eg airline – price, meals, lounges, seating class choices, hub connectivity, service, speed, frequency point to point flights etc etc) – and using this to create a “strategy canvas” BA – focus on lounges, meals, seating class, hub connectivity Ryan air – focus in price, cost, point to point Red Ocean Blue Ocean Industry Focuses on rivals within industry Looks across alternative industries Strategic Group Focus on strategic position within group Looks across strategic groups in industry Buyer power Focus on better serving buyer group Redefines the industry buyer group Scope of product offering Maximises value of prod within industry Looks across to complimentary product offerings Functional / emotional orientation Focus on improving price performance Re-thinks the orientation within the industry Time Focus on adapting to external trends Participates in shaping ext trends

5 A “fictional” Strategy Map for Psion Teklogix…
Where would you draw the strategy canvas for Psion Teklogix and our competitors?????

6 Eliminate - reduce - Raise - Create grid:
Trying to have a complete product for every market (IKON Variants) Raise Quality Ease to do business with Relationship Management Reduce Focus on price Focus on Ruggedness Create OSM & Modularity & commercialize this

7 Getting the Strategic sequence right
Exceptional utility Exceptional utility Revenue Focused No Yes Price No Yes Cost Profit Focused Yes No Adaption Yes Sustain, re – value innovate (protected by barriers to entry) Blue Ocean

8 Key Take-away’s Look outside “the box” and beyond the competition to generate “value innovation” Strategy maps can be used to show the strategic path Make decisions on “features” to eliminate, start, enhance or reduce Blue Oceans are usually “self protecting for a number of years” but will turn red over time – so continually look for fresh blue Oceans…..

9 Where is Psion Teklogix next Blue Ocean?????

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