Presentation on theme: "Blue Ocean Strategy Whats it all about?. - Blue Oceans – definitions and examples - Formulating Blue Ocean strategies - Executing Blue Ocean strategies."— Presentation transcript:
Blue Ocean Strategy Whats it all about?
- Blue Oceans – definitions and examples - Formulating Blue Ocean strategies - Executing Blue Ocean strategies - key take aways
Blue Oceans – definitions and examples 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 Costs Buyer Value Value Innovation Red OceanBlue Ocean Compete in existing mtksCreate uncontested mkt space Beat the competitionMake the comp irrelevant Exploit existing demandCreate and capture new demand Make the value cost trade offBreak the value cost trade off
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 OceanBlue Ocean IndustryFocuses on rivals within industryLooks across alternative industries Strategic GroupFocus on strategic position within groupLooks across strategic groups in industry Buyer powerFocus on better serving buyer groupRedefines 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 trendsParticipates in shaping ext trends
A fictional Strategy Map for Psion Teklogix… Where would you draw the strategy canvas for Psion Teklogix and our competitors?????
Eliminate - reduce - Raise - Create grid: Eliminate 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
Getting the Strategic sequence right Exceptional utility Cost Adaption Blue Ocean Price Yes No Revenue Focused Profit Focused Sustain, re – value innovate (protected by barriers to entry)
Key Take-aways 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…..