1. Conclusion To Blue Ocean Strategy
Ashleigh Wright
Lucas Raney
Marshall Lester
Michael Greene

2. The People Proposition
Optimally, a People Proposition:
Makes everyone a “winner”
Makes buy-in easy
Is differentiated from the competition
Is also low cost
The People Proposition
“Incentives put in place for the people needed to support and implement the strategy”

3. Spotify’s People Proposition
Spotify is in a blue ocean, blending song selection (such as iTunes) and free music (such as Pandora) into one platform
Supports users AND contributors--everyone’s a winner:
Free/inexpensive music for listeners
Revenue for musicians per listen
Ad visibility for companies doubles as revenue for Spotify
Easy to use and runs on all platforms
Buy-in costs nothing for free users and $9.99 monthly for paid users

4. Strategy Misalignment
All angles must be considered:
Strategy must differentiate and be low-cost
Must consider all stakeholders
People have to want to use your product
Strategy Misalignment
Value, Profit and People Propositions must all align for success!

5. Microsoft Zune: Failure to Differentiate
Microsoft’s answer to Apple’s iPod
Zune HD = iPod Touch
Performed well, fantastic software
Priced similarly to iPod
Why did it fail?
Released in 2006, iPod in too late to market, big player already established
Very similar to iPod, no highly differentiating features, seen as a “copycat”
“Its design marked it as being different from an iPod, but that was pretty much the only difference”
Survived until 2011 with only single digit percentages of the market

6. All Blue Oceans Become Red
Barriers to Entry
When to find a new ocean
Making the jump repeatable
Renewing Blue Oceans
“A dynamic process”

7. Barriers to Imitation of a BOS
Value innovation does not make sense to a company’s conventional logic.
Blue ocean strategy may conflict with other companies’ brand image.
Natural monopoly: The market often cannot support a second player.
Patents or legal permits block imitation.
High volume leads to rapid cost advantage for the value innovator, discouraging followers from entering the market.
Network externalities discourage imitation.
Imitation often requires significant political, operational, and cultural changes.
Companies that value-innovate earn brand buzz and a loyal customer following that tends to shun imitators.

8. Value Innovation
Value innovation does not make sense based on conventional strategic logic.
Value innovation takes risk and is often ridiculed because it doesn’t follow conventional business logic, and ridicule doesn’t inspire imitation.
Chart Industries used value innovation for their venture in LNG for vehicle fueling.

9. 2. Brand Image
Established brand image prevents companies from imitating a Blue Ocean Strategy.
Many companies already have a well established image and don’t want to damage it by imitating other brands.
For example: Crocs footwear

10. 3. Natural Monopoly
Natural Monopoly blocks imitation when the size of a market cannot support another company.
Railways are a good example of Natural Monopoly.

11. 4. Patents or Legal Permits
Patents or Legal permits prevent imitation.
Chart Industries uses patents to protect their products and prevent imitation by competitors.
Cryocooler design patent

12. 5. Cost Advantages
Rapid cost advantages for larger companies from buying in high volume.
Imitators cannot keep up with production because volume is not as high.

13. 6. Network Externalities
Innovative companies will have a larger follower/customer base than an imitator.
Gives customer no incentive to use alternatives.
Wickr, Slingshot

14. 7. Politics
Many companies are stuck in their ways and do not have the resources to imitate new blue oceans.
Many times the politics of a company cannot bear the significant changes in the short term.

15. 8. Brand Buzz
People want the latest products from the actual innovator themselves, not a knock-off.
Brand Buzz can make or break your company.
Important when being a value innovator to get your brand out and make sure your product/service is being reciprocated well.

16. When to Value-Innovate Again
All blue oceans tend to eventually have competition.
Important to monitor value curve signals.
When converging with competition, innovation is necessary.
When to Value-Innovate Again

17. Chart Industries Patents Most Recent Patents 3 in ‘06 1 in ‘07

18. References
Zune Article: