By: Jake Alonzo Charly Cone Natalie Bohman Meredithe Marshall Michael Scott Mikey Via Virginie Charlotte Milhaud BLUE OCEAN STRATEGY Chapter 4: Focus on Big Picture, Not the Numbers

Strategy canvas visualizes a company's current strategic position in its marketplace Strategy helps the company charts its future strategy. shows the strategic profile of an industry shows the strategic profile of competitors shows the company's strategic profile Focus on the Big Picture

Before visualizing your future strategy…  You need to analyze to what extent your company and its competitors have competing factors (drawing a strategy canvas)  Difficulty: Finding manager comfortable along all dimensions to analyze well  BOS describes a four step, structured process that addresses the Strategy Canvas and plans future strategy.  The Four Steps of Visualizing Strategy.

Step 1: Visual Awakening Step 2 Visual Exploration Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication  Before you plan a new strategy, you must agree on the company’s current state in its industry.  Company’s managers may not have clear, universal understanding of what’s wrong with the company’s current state against competitors.  In this first step: Upper level managers from different locations must agree what their company’s value chain does compared to their competitors.  You cannot start discussing changes in company strategy until you resolve the differences of opinion from your leaders.

Step 1: Visual Awakening Step 2 Visual Exploration Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication  The Book uses a 150 year old finance company that they make up a name for called European Financial Services (EFS)  Example of Team opinions, formulating company value chains  Once managers decided on value chain, realized company was investing in unfavorably diverse value factors compared to their main competitors such as banks.

Step 1: Visual Awakening Step 2 Visual Exploration Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication  The Book uses a 150 year old finance company that they make up a name for called European Financial Services (EFS)  Example of Team opinions, formulating company value chains  Once managers decided on value chain, realized company was investing in unfavorably diverse value factors compared to their main competitors such as banks.

Step 2: Visual Exploration Step 2 Visual Exploration Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication “A company should never outsource its eyes” No substitute for seeing for yourself Need to get into the field Challenge the boundaries of competition Focus on the big picture Look at your CUSTOMERS But also go after the NONCUSTOMERS And actual USERS (if different from customers) “A company should never outsource its eyes” No substitute for seeing for yourself Need to get into the field Challenge the boundaries of competition Focus on the big picture Look at your CUSTOMERS But also go after the NONCUSTOMERS And actual USERS (if different from customers)

Step 2: Visual Exploration  Google Apps for Arizona State University Google Apps for Arizona State University  Google offered a full solution based on the final user needs and expectancies  The Google package includes  Application for  Application for agenda  Application for Instant messaging

 Companies need to focus on complementary products and services that are consumed alongside their products or services  Companies need to offer a solution which respond to your consumers total needs  Finding the Blue Oceans alongside your industry Step 2: Visual Exploration Ex: Google Search Engine Sort Information Up-to-date information Translate information Product and share documents Communicate and share information Collect official docs and articles

Step 3: Visual Strategy Fair Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Step 2 Visual Exploration Draw your “to be” strategy canvas based on insights from field observations. Get feedback on alternative strategy canvases, from customers, competitors’ customers, and noncustomers. Use feedback to build the best “to be” future strategy

Step 3: Visual Strategy Fair Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Step 2 Visual Exploration After two weeks of drawing, the team presented a strategy canvas, also called Visual Strategy Fair. Senior Corporate executives including representatives of EPS’s external constituencies were among the Attendees for the fair The attendees where mangers that you met with during field trips, which included noncustomers, customers of competitors, and demanding EPS’s customers.

Step 3: Visual Strategy Fair Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Step 2 Visual Exploration In two hours, the 12 teams were divided into 6 online groups and 6 offline groups where they presented the curves. The groups had only 10 minutes to present because any longer would be confusing and under 10 minutes keeps your attention.

Step 3: Visual Strategy Fair Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Step 2 Visual Exploration After the 12 groups presented, the judge picked its five favorite groups and explained their decision on their picks. Also, the judge had to explain why they did not pick their other value curves.

Step 3: Visual Strategy Fair Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Step 2 Visual Exploration Afterwards, the teams looked over what the judges disliked and liked. 1/3 of the what they thought was key competitive factors, another 1/3 was either were not well articulated or had overlooked the visual awakening phase.

Step 4: Visual Communication Step 2 Visual Exploration Step 1 Visual Awakening Step 3 Visual Strategy Fair Step 4 Visual Communication Communicate in ways people can understand through visuals Pictures Charts Make easy references for employees to look at often and remember the what direction their company is headed. Google managements consideration of google maps and google earth.

Visualizing Strategy: Corporate level strategy  Goal: the transfer of strategic practices across the business units  Has to be efficient with a strong level of strategic management  Like discussed in previous presentation  Create a blue ocean status rather then maintaining a red ocean

Using Strategy Canvas  captures the current state of play in the known market space. understand where the competition is currently investing and the factors that the industry competes on.  Ex. Google with their music sharing program, , search engine, telecommunications  it propels you to action by reorienting your focus from competitors to alternatives and from customers and noncustomers of the industry.

Strategy Canvas Book Example  Samsung  Telecommunications branch  Utilize team members from various business units to discuss strategic projects  Huge success, many high level positions developed through increased business demand and successfulness  TRANSFER OF RED TO BLUE OCEANS  Through this process of Samsung utilizing innovation through the strategy canvas  Google and the mail and now recently the music program

Pioneer-Migrator-Settler PMS map  Way of highlighting the growth potential of current/future business conditions  Pioneer – blue ocean strategists  Migrator – in between settler and pioneer  Settler – conform to the basic industry standards, void of innovativeness in pioneers (Red Ocean)  Then plot the company's portfolios  Want to be a pioneer meaning want to be innovative.  Google is predominately a pioneer

Overcoming the Limitations of Strategic Planning In today business environment managers are dissatisfied with strategic planning. Strategic planning needs to be: Should be more collective rather than using the centralization approach More interaction and less documentation Build on big picture More commitment

Conclusion Drawing a strategy canvas is not the only portion of strategic planning. The following three take aways will improve your chances of creating a blue ocean. Documents must be compiled and discussed Start with the big picture of how to break away from your competition Four methods of Visualizing Strategy