1. Blue Ocean Strategy Chapter 4
Focus on the Big Picture, Not the Numbers
February 10, 2009
Group 1
Anna Sterling
Clay Jones
Johnnie Davis
Kimberly Smith
Nolan Bosworth
Shaina Weaver
Zane Barnes

2. Focusing on the Big Picture
Draw your company’s Strategy Canvas:
Shows the strategic profile of the industry by divulging factors of competition the shape the industry.
Shows the strategic profile of current and potential competitors and what factors they concentrate on.
Shows your own company’s strategic profile against those or you competitors and the factors your organization focuses on.

3. Drawing Your Strategy Canvas
The Four Steps of Visualizing Strategy: A summary
Visual Awakening – Compare your business with competitors’ businesses by creating an “as is” strategy canvas. Discuss what changes should be made.
Visual Exploration – Management must go into the field and decide where best to implement the 6 paths of Blue Oceans. Observe advantages and disadvantages of new products and services. Decide which factors to keep, eliminate, or modify.

4. Drawing Your Strategy Canvas (Cont.)
The Four Steps of Visualizing Strategy: A summary
Visual Strategy Fair – Draw a second strategy canvas based on observations from time spent in the field. Receive feedback from customers, competitors’ customers, and employees. Use this feedback to construct your final canvas.
Visual Communication – Distribute all drafts of your strategy canvas on a single page for comparison. Accept projects and operational moves only if they are in-line with your new strategy.

5. Step 1: Visual Awakening
Common Mistakes:
Discussing changes in strategy before resolving differences of opinion about the current state of play
Executives are often reluctant to accept the need for change
Executives’ answer:
A highly determined leader or a crisis

6. Step 1: Continued, Helping Executives Understand
Ask them to draw the value curve of their company’s strategy bring home the need for change
This can be a forceful wake-up call for companies to challenge their existing strategies
Example: EFS

7. EFS: European Financial Services
Had been struggling for a long time with an ill-defined and poorly communicated strategy
Began the strategy process by bringing together upper management from Europe, N. American, Asia, and Australia
2 Teams: Value curve production and emerging online foreign exchange business

8. EFS: Continued The experience: Europe vs. America
The power of the website
EFS strategy vs. competitors (Clearskies)

9. Step 2: Visual Exploration: EFS Example
EFS sent managers out for four weeks to gather information.
They had to interview ten people involved in corporate foreign exchange.
Also reached outside the industry’s traditional boundaries to other companies that did not yet use corporate foreign exchange.

10. Step 2: Visual Exploration: EFS Example
EFS Findings:
What they thought was important turned out not to be what the customer thought was important.
Because of these findings, EFS was able to reformulate new strategies.
Redid the value curves and formulated new compelling taglines that fit their business model.

11. Step 3: Visual Strategy Fair
Both teams presented their strategy canvases at a visual strategy fair.
(6 by the online group/6 by the offline group)  
Attendees included…
senior corporate executives
noncustomers
customers of competitors
demanding EFS customers
After all 12 strategies were presented, each judge was given 5 sticky notes and told to put them next to his/her favorite, then explain why they did not choose certain curves.
They realized that 1/3 of what they had thought were key competitive factors were, in fact, marginal to customers. Another 1/3 either were not well articulated or had been overlooked in the visual awakening phase. It then became clear that the executives needed to reassess things such as EFS’s separation of its online & traditional business.
Following the visual strategy fair, the teams were able to draw a value curve that was a truer likeness of the existing strategic profile than anything they had produced earlier.

12. Step 3: Visual Strategy Fair

13. Step 3: Visual Strategy Fair
Figure 4-5 summarizes EFS’s 4 actions to create value innovation, which is the cornerstone of blue ocean strategy.
Figure 4-5: Eliminate-Reduce-Raise-Create Grid: The Case of EFS
Eliminate
Relationship Management
Raise
Ease of use
Security
Accuracy
Speed
Market commentary
Reduce
Account Executives
Corporate Dealers
Create
Confirmation
Tracking

14. Step 3: Visual Strategy Fair
The new value curve exhibited the criteria of a successful strategy, and it displayed more focus than the previous strategy.
By collapsing its online & traditional businesses into 1 offering, EFS substantially cut the operational complexity of its business model, making systematic execution far easier.

15. Visualizing Strategy at a Corporate Level
Using a strategy canvas aides in informing individual business units throughout the corporation about the necessary path to a blue ocean
When business units present their strategy canvases to one another, they deepen their understanding of the other businesses in the corporate portfolio
transfer of strategic best practices across units

16. Step 4: VISUAL COMMUNICATION Easily Understood
When communicating the future strategy, you need to “dumb it down”.
All employees, in all departments, need to understand.
Use only one page for easy comprehension.
Make sure everyone understands.
Support only plans in the direction of the new strategy.

17. Step 4: VISUAL COMMUNICATION What EFS did…
Gave every employee a one-page picture showing the new and old strategies.
This allowed the employees to focus their efforts on the future.
Meetings were held to explain what needed to be reduced, raised, eliminated and created to get them into a blue ocean
EFS employees were so motivated by this plan that they even hung up the one-page picture in their cubes.
All investment decisions had to fit this picture.

18. Visualizing Strategy at a Corporate Level
Samsung Electronics of Korea
used strategy canvases at 2000 corporate conference
seventy top managers attended, including CEO
unit heads presented canvases and implementation plans with focus towards a blue ocean

19. Visualizing Strategy at a Corporate Level
Samsung Electronics has institutionalized the use of the strategy canvas through its establishment of the Value Innovation Program (VIP) Center
equipped with 20 project rooms
teams discuss strategic projects focusing on strategy canvases

20. Visualizing Strategy at a Corporate Level
Do your business heads lack an understanding of the other businesses in your corporate portfolio?
Are your strategic best practices poorly communicated across your business units?
Are your low-performing units quick to blame their competitive situations for their results?

21. Using the Pioneer-Migrator-Settler (PMS) Map
PMS Map- helps visualize, plan, and predict a companies future growth and profit.
Pioneers- business that offer unprecedented value and are powerful sources of profitable growth. Their value curves are different form the competitions on a strategy canvas. All pioneers are blue oceans.
Migrators- are in between pioneers and settlers. They offer improved value, but not innovative value.
Settlers- do not contribute to much future growth and are stuck in a red ocean. Their value curves match the basic shape of the industry.

22. Example PMS Map

23. Overcoming the Limitations of Strategic Planning
Big picture (use a strategy canvas, and PMS map)
Use creative components
Be motivational, invoking commitment
Discuss number-crunching and documents
“The soul never thinks without an image”, Aristotle

24. Takeaways
Step 1: Visual Awakening – Compare your business with competitors’ businesses by creating an “as is” strategy canvas. Discuss what changes should be made.
Step 2: Visual Exploration – Management must go into the field and decide where best to implement the 6 paths of Blue Oceans. Observe advantages and disadvantages of new products and services. Decide which factors to keep, eliminate, or modify.

25. Takeaways Step 3: Visual Strategy Fair
First, draw your “to be” strategy canvas based on insights from field observations
Second, get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers
Third, use feedback to build the best “to be” future strategy

26. Takeaways Step 4: Visual Communication
Distribute your before-and-after strategic profiles on one page for easy comparison.
Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

27. Takeaways
Make a Pioneer-Migrator-Settler (PMS) Map to identify strengths and weakness.