3. RED OCEANS
BLUE OCEANS
THE MARKET UNIVERSE

4. RED OCEANS = THE KNOWN

5. COMPETITION IS WITHIN
EXISTING MARKET SPACE

6. FOCUS IS ON EXISTING
CUSTOMERS

7. EXPLOTATION OF EXISTING
DEMAND

8. Cosmetic industry Anti wrinkles brands models promises Skin creams
Youth beauty
Expensive advertising

9. BLUE OCEANS = THE UNKNOWN

10. NEW MARKETS AND
NEW DEMAND

11. COMPETITION IS IRRELAVANT

12. Body shop
vitamins
functional
Essential oil
prevention
mineral

13. FOCUS IS ON
NON CUSTOMERS

14. The Three Tiers of Noncustomers
Although the universe of noncustomers typically offers big blue ocean opportunities ,few companies have keen insight into who noncustomers are and how to unlock them.To convert this huge latent demand into real demand in the form of thriving new customer,companies need to deepen their understand of the universe of noncustomers.
Your
Market
First
Tier
Second
Third
First Tier: “Soon-to-be” noncustomers who are on the edge of your market, waiting to jump ship.
Second Tier: “Refusing” noncustomers who consciously choose against your market.
Third Tier: “Unexplored” noncustomer who are in markets distant from yours.

15. The three Tiers of Non- customers
First Tier:”Soon-to be” noncusmers who are on the edge of your market waiting to jump ship.
Second Tier:”Refusing” noncustomers who consciously choose against your market.
Third Tier: “Unexplored” noncusmers who are in market distant from ours.

16. Examples of strategic moves that created blue oceans of new, untapped demand:
Cirque du Soleil (the circus reinvented for the entertainment market)
- Starbucks (coffee as low-cost luxury for high-end consumers)
- Ebay (online auctioning)
- Sony (the Walkman - personal portable stereos)
- Cars: Japanese fuel-efficient autos (mid-70s) and Chrysler minivan (1984)
- Computers: Apple personal computer (1978) and Dell's built-to-order computers (mid-1990s).

17. Creating Blue Oceans
Companies have long engaged in head to head competition in search of sustained, profitable growth. They have fought for competitive advantage, battled over market share ,and struggled for differentiation.
Yet in today’s overcrowded industries, competing head on results in nothing but a bloody “red ocean” of rivals fighting over a shirking profit pool.
Blue ocean strategy provide a systemic approach to making the competition irrelevant.

18. Red Ocean Vs Blue Ocean Strategy
Red Ocean Strategy
Blue Ocean Strategy
Competing in existing market space.
Create uncontested market space.
Beat the competition.
Make the competition irrelevant.
Exploit existing demand.
Create and capture new trade-off.
Make the value cost trade-off.
Break the value-cost trade off.

19. Cirque du Soleil - an example of creating a new market space, by blending opera and ballet with the circus format while eliminating star performer and animals

20. Ignoring the competition and focusing on the buyer
VALUE INNOVATION
Ignoring the competition
and focusing on the buyer
Will help create value
For everyone

21. Value Innovating:The Cornerstone of Blue Ocean Strategy
What consistency separated winners from losers in creating blue oceans was their approach to strategy.The companies caught in the red ocean followed a conventional approach,racing to beat the competition by building a defensible position within the existing industry order.The creator of blue ocean ,surprisingly,didn’t use the competition as their benchmark. Instead ,they followed different strategic logic that we call value innovation.
Value innovation place equal emphasis on value and innovation .Value without innovation tends to focus on value creation on an incremental scale,sometime that improve value but is not sufficient to make you stand out n he marketplace.Innovation with out value tends to be technology-driven,market pioneering,of futuristic,often shooting beyond what buyers are ready to accept and pay for. In this sense,it is important to distinguish between value innovation as opposed to technology innovation and market pioneering.

22. Value Innovation: The Cornerstone of Blue Ocean Strategy
Value innovation is created in the region where a company's actions favorably affect both its cost structure and its value proposition to buyers. Cost savings are made by eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates.
Costs
Value
Innovation
Buyer Value
The Simultaneous Pursuit of Differentiation and Low Cost

23. The Four Actions Framework
To reconstruct buyer value element in crafting a new value curve we have developed the four actions framework.
Reduce
Which factors should be reduced well below the industry’s standard ?
A New Value Curve
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 ?
Raise
Which factors should be raised well above the industry’s standard ?

24. Chapter 2:The Eliminate-Reduce-Raise-Create Grid
There is a third tool that is key to creation oceans.It is a supplementary analytic to the four actions framework Given below:
Eliminate
Star performers
Animal show
Multiple show arenas
Raise
Unique venue
Reduce
Fun and humor
Thrill and danger
Create
Theme
Redefined environment
Multiple production
Artistic music and dance