Analytical Tools & Frameworks Group 6 Justin Shamp Ryan Moeller Michael Grizzle Stuart Gaston Tate Roueche Rachel Camunez

Shell Founded in 1900 as the Royal Dutch Shell Company (England and Wales) A global organization of energy and petrochemical companies 2nd largest globally in revenue as of 2011 Core Values: “honesty, integrity and respect for people” http://www.youtube.com/watch?v=kIrFlBIlqcE

Example U.S. wine industry [yellow tail] 3rd largest consumption of wine worldwide Competes against other major wine countries Top 8 wine makers in the U.S. produce more than 75% [yellow tail] Created a blue ocean by having wine resemble the characteristics of the Australian culture Bold, laid back, fun and adventurous Ended up appealing to a broad cross section of alcoholic beverage consumers

The Strategy Canvas Serves 2 purposes Captures the current state of play in the market place (horizontal axis) Allows you to understand what is being invested in by the competition Allows you to understand the factors the industry currently competes in Makes you see what customers are receiving from the competition Captures the offering level that buyers receive across all these key competing factors (vertical axis) High score = a company offers buyers more, which means they invest more In case of price a high score = high price

Value Curve Value curve A graphic depiction of a company’s relative performance across its industry’s factors of competition

The 4 Actions Framework Reduce Eliminate Create A New Value Curve Which factors should be reduced well below the industry’s standard? Eliminate Which of the factors that the industry takes for granted should be eliminated? Create Which factors should be created that the industry has never offered? A New Value Curve Raise Which factors should be raised well above the industry’s standard?

Eliminate-Reduce-Raise-Create Grid EX: Yellow Tail wine ELIMINATE Enological terminology & distinctions Aging qualities Above-the-line marketing RAISE - Price versus budget wines REDUCE Wine complexity Wine range Vineyard prestige CREATE Easy drinking Ease of selection Fun and adventure

Eliminate-Reduce-Raise-Create Grid EX: Shell ELIMINATE Harmful chemicals & substances in the gas that ruins engines The lowest price & quality of gas RAISE Quality Idea that low price gas will harm your vehicle’s engine REDUCE Low quality gas that corrodes engines CREATE Gas that performs better & doesn’t harm a vehicle’s engine

3 Characteristics of a Good Strategy Focus Not diffusing efforts across all key factors of competition Divergence How you differentiate from the competition Compelling Tagline “Passionate about our products and the people who use them”

Reading the Value Curves A blue ocean strategy Meets the 3 characteristics of a good strategy: focus, divergence, and a tagline A company caught in the red ocean When a company’s value curve converges with competitors Overdelivery without payback A company’s value curve has high levels of all factors across the strategy canvas but maybe oversupplying customers An incoherent strategy The company has independent substrategies Strategic contradictions A company is offering a high level on 1 factor while ignoring others An internally driven company How does a company label the industry’s competing factors