Blue Ocean Strategy Chapter 4 Larin Sanders Brian Davis Ivan Salazar

Chapter Overview Discovering the right strategic plan to get to the blue ocean strategy Four steps 1. Visual Awakening 2. Visual Exploration 3. Visual Strategy Fair 4. Visual Communication

Drawing a Strategy Canvas Produces strategies that unlock creativity Focus on the big picture Shows the strategic profile of an industry Shows the strategic profile of current and potential competitors Shows the company’s value curve

Focus on the Big Picture, Not the Numbers Step 1: Visual Awakening Ask executives what prompts them to seek out blue oceans and change Draw a value curve of the company’s strategy See where your strategy needs to change

Focus on the Big Picture, Not the Numbers

Focus on the Big Picture, Not the Numbers Step 1: Visual Awakening European Financial Services Did not have a defined or communicated strategy Value curve for both offline and online business lacked focus Creating strong desire in top management to seriously rethink the company’s current strategy results

Focus on the Big Picture, Not the Numbers Step 2: Visual Exploration The next step is to send a team into the field A company should never outsource its eyes. Great strategic insights are “less the product of genius than of getting into the field and challenging the boundaries of competition.”

Focus on the Big Picture, Not the Numbers Step 2: Visual Exploration The first area of concern, when visually exploring, obviously resides in the customer Identifying the array of complementary products and services that are consumed alongside your own may give you an insight into bundling opportunities. One needs to look at how customers might find alternative ways of fulfilling the need that your product or service satisfies.

Focus on the Big Picture, Not the Numbers Step 2: Visual Exploration EFS (European Financial Services) example Sent managers into the field for 4 weeks Each manager to interview 10 people in corporate foreign exchange services Found that what they thought was key to their success was actually their achilles’ heel. The factor which was valued most was getting speedy confirmation of transactions

Focus on the Big Picture, Not the Numbers Step 2: Visual Exploration EFS continued… After their findings, the teams were sent back to the drawing board to draw 6 new value curves using the six path framework Hope to push managers to create innovative proposals and break the boundaries of conventional thinking Also asked to create compelling taglines for each strategy.

Focus on the Big Picture, Not the Numbers Step 3: Visual Strategy Fair The EFS example continued….. After two weeks of drawing and redrawing the teams were ready to present in a visual strategy fair. The teams were only allowed to present each curve for no more than 10 min The pictures were hung on the walls so the audience could see them and vote.

Focus on the Big Picture, Not the Numbers Step 3: Visual Strategy Fair After all strategies were given, the judges were to place 5 sticky notes on their favorites strategy. Judges were then asked to explain why they voted on the ones that they did and why they didn’t vote on the others. Found that one-third of what they thought were key competitive factors were only marginal to customers. Another one-third was not articulated well or was overlooked.

Focus on the Big Picture, Not the Numbers Step 3: Visual Strategy Fair After the strategy fair, the managers could complete their mission….. Being able to “draw a value curve that was truer likeness of the existing strategic profile” More important.. Managers could now draw a future strategy that would be distinctive and now reveal a true but hidden need in the marketplace.

Focus on the Big Picture, Not the Numbers Eliminate Relationship management Raise Ease of use Security Accuracy Speed Market commentary Reduce Account executives Corporate dealers Create Confirmation tracking

Focus on the Big Picture, Not the Numbers 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 gap to actualize the new strategy.

Focus on the Big Picture, Not the Numbers Visualizing Strategy at the Corporate Level Using the Strategy Canvas It captures the current state of play in the known market space. This allows you to understand where the competition is currently investing and the factors that the industry competes on. Also, it propels you to action by reorienting your focus from competitors to alternatives and from customers to noncustomers of the industry.

Focus on the Big Picture, Not the Numbers Example of Strategy Canvas http://www.youtube.com/watch?v=6OxGugvQg6s

Focus on the Big Picture, Not the Numbers Visualizing Strategy at the Corporate Level Using the Pioneer-Migrator-Settler (PMS) Map Visualizing the potential of each product in the future growth of the company. The Pioneers are products that offer unprecedented value and high profit growth potential. The Migrators are goods and services that have value but are not innovative. The Settlers are goods and services that follow the industry norms.

Focus on the Big Picture, Not the Numbers Review “The soul never thinks without an image”-Aristotle Step 1: Visual Awakening Step 2: Visual Exploration Step 3: Visual Strategy Fair Step 4: Visual Communication How do you maximize the size of the blue ocean you are creating?

Summary of Chapter Visual Awakening Visual Exploration Visual Strategy Fair Visual Communication -Compare your business with your competitors’ by drawing your “as is” strategy canvas -See where your strategy needs to change -Go into the field to explore the six paths to creating blue oceans -Observe the distinctive advantages of altercative products and services -See which factors you should eliminate, create, or change -Draw your “to be” strategy canvas based on insights from field observation -Get feedback on alternative strategy canvases from customers. Competitors’ customers and noncustomers -Use feedback to build the best “to be” future strategy -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 c lose the gaps to actualize the new strategy