1. Ch. 3 Reconstruct Market Boundaries
Blue Ocean Strategy
Sara, Cher, Sarah, Daisy, & Sean

2. 1st Principle of Blue Ocean Strategy
Break from the competition
Create blue oceans
Questions
Are there systematic patterns for reconstructing market boundaries to create blue oceans?
If so, can they be applied across all industry sectors?
Yes, there are six basic approaches to remaking market boundaries.
Six Paths Framework

3. Six Assumptions Define industry and focus on being the best in it.
Look at the industry through generally accepted strategic groups and strive to stand out in the group they play in.
Focus on same buyer group. (Be it the purchaser, user, or influencer.)
Define scope of products and services offered by their industry.
Accept industry’s functional or emotional orientation
Focus on same point in time (current competitive threats) in creating strategy.

4. Six Paths Framework Path 1: Look Across Alternative Industries
Compete with industry and alternative products and services
Alternatives
Substitutes
Sellers abandon intuitive thinking.
Creation of blue oceans
NetJets
NTT DoCoMo’s i-mode

5. Six Paths Framework
Path 2: Look Across Strategic Groups Within Industry
Strategic groups- group of companies within an industry that pursue similar strategies.
Two dimensions:
Break from narrow tunnel vision by determining factors that influence customers’ decisions
Ex: Curves for Women
Why do customer’s trade up or down?

6. Six Paths Framework Path 3: Look Across the Chain of Buyers
Chain of buyers who are involved in directly or indirectly in the buying process.
Discovery of a new blue ocean
Novo Nordisk
Focus from doctors to users- NovoPen
Bloomberg
Purchasers to users
What are the chain of buyers in your industry?
By shifting the buyer group, what new value will you add?

7. Six Paths Framework
Path 4: Look Across Complementary Product and Service Offerings
Value in complementary products and services
Define solution buyers seek in choosing products and services.
Before, during, and after product is used
NABI- bus transit
How do you eliminate pain points in products and offerings?

8. Six Paths Framework
Path 5: Look Across Functional or Emotional Appeal to Buyers
Two basis of Appeals
Functional (rational)
Emotional
Customers’ expectations
Challenge functional-emotional orientation and discover a new market space.
Ex. QB House- eliminating time
What elements of emotional appeal can you add to a functional orientation and vice versa?

9. Six Paths Framework Path 6: Look Across Time External Trends
The value a market delivers today and the value it might deliver tomorrow.
Finding insights in trends
Decisive to business
Must be irreversible
Must have clear trajectory
Ex. Apple- illegal music

10. Head to Head Competition
Blue Ocean Creation
Industry
Focuses on rivals within its industry
Locks across alternative industries
Strategic Group
Focuses on competitive position within strategic group
Looks across strategic groups within industry
Buyer Group
Focuses on better serving the buyer group
Redefines the industry buyer group
Scope of Product/Service Offering
Focuses on maximizing the value of product and service offerings within the bounds of its industry
Looks across to complementary product and service offerings
Functional-emotional Orientation
Focuses on improving price performance within the functional-emotional orientation of its industry
Rethinks the functional emotional orientation of its industry
Time
Focuses on adapting to external trends as they occur
Participates in shaping external trends over time
Take Aways