1. Blue Ocean Strategy
Book Review
Daisy, Sara, Cher, Sarah, Sean

2. Ch. 1 Creating Blue Oceans
Red Oceans
Blue Oceans
Compete in existing market space.
Create uncontested market space.
Beat the competition.
Make the competition irrelevant.
Exploit the existing demand.
Create and capture new demand.
Make the value-cost trade-off.
Break the value-cost trade-off.
Strategic choice of differentiation or low cost.
Pursuit of differentiation and low cost.

3. Value Innovation: Cornerstone of BOS
Approach to strategy separates the winners from the losers.
Creators do not use the competition as a benchmark.
Value Innovation
Instead of beating the competition, focus on making competition irrelevant.
Value innovation occurs when innovation is aligned with utility, price, and cost positions.
Create Blue Oceans by pursuing differentiation and low cost simultaneously.

4. Six Principles of Blue Ocean Strategy
Reconstruct market boundaries
Focus on the big picture, not the numbers
Reach beyond existing demand
Get the strategic sequence right
Overcome key organizational hurdles
Build execution into strategy

5. Ch. 2 Analytical Tool and Frameworks
Strategy Canvas
An analytic framework that is central to value innovation and the creation of blue oceans.
Value Curve
graphic depiction of a company’s relative performance across its industry’s factors of competition.
Four Actions Framework
Questions to challenge strategic logic and business model
Eliminate-Reduce-Raise-Create Grid
Act on Four Actions to create a new value curve
Characteristics of a Good Strategy
Focus, Divergence, & Compelling Tagline
Company is on the right track if it meets the criteria.

6. CH 3: Breaking from Competition
Break from the competition to create blue oceans
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

7. CH 3: Six Paths Framework
Path 1: Look across Alternative Industries
Path 2: Look Across Strategic Groups Within Industry
Path 3: Look Across the Chain of Buyers
Path 4: Look Across Complementary Product and Service Offerings
Path 5: Look Across Functional or Emotional Appeal to Buyers
Path 6: Look Across Time

8. CH 4: Visual Awakening Strategy
Step 1: Visual Awakening
As-Is strategy- compare your company with competitors
Step 2: Visual Exploration
Send managers into field to study use of products
Observe advantages of alternative products
Find factors to eliminate, create or change in your business
Step 3: Visual Strategy Fair
Business units present their strategy to everyone to see business portfolio and big picture

9. CH 4: Using the Pioneer-Migrator-Settler (PMS) Map
Pioneer- the businesses that offer unprecedented value
Pioneers have maximum growth potential but often consume cash to finance growth as they expand.
Settler - the businesses whose value curves conform to the basic shape of the industry’s
Even though settlers have marginal growth potential, they are frequently today’s cash generators.
Migrators- lie somewhere in between the pioneers and the settlers, and fall between red oceans and blue oceans.

10. Chapter 5: Reach Beyond Existing Demand
How do you maximize the size of the blue ocean you are creating?
You reach beyond existing demand (the 3rd principle of blue ocean strategy)
To maximize the size of your blue ocean you need to concentrate your focus on non-customers and commonalities in what those buyers value
Non-customers before customers
Commonalties before differences
De-segmentation before finer segmentation

11. Chapter 5: Reach Beyond Existing Demand
Three tiers of non-customers
Soon-to-be non-customers
Refusing non-customers
Unexplored non-customers
Within these three groups there is an ocean of untapped demand waiting to be released

12. Chapter 5: Reach Beyond Existing Demand
Remember you should go for the biggest catchment, or the biggest group of non-customers

13. Chapter 6: Get the Strategic Sequence Right
The 4th principle of blue ocean strategy: get the strategic sequence right
Discusses the strategic sequence of fleshing out and validating blue ocean ideas to ensure their commercial viability

14. Chapter 6: Get the Strategic Sequence Right
Your business must pass all of these four tests to become a viable blue ocean idea

15. CH 7: Breaking through Hurdles
Break through the cognitive hurdle
Jump the resource hurdle
Jump the motivational hurdle
Knock over the political hurdle

16. CH 7: Tipping Point Leadership
Tipping Point Leadership-allows you to overcome these four hurdles fast and at low cost while winning employees’ backing in executing a break from the status quo.
Ex. Target

17. CH 8: The power of fair process
Strategy formulation process- fair process
Attitudes-trust and commitment
Behavior-voluntary cooperation
Strategy Execution-exceeds expectations

18. CH 8: Successful companies
Successful companies do not consist of top, middle, and bottom hierarchies; it is a collective process that includes all who make up the organization.
Intangible capital(commitment, trust, voluntary cooperation) is a must have in order to be successful.
Ex. Target in the community

19. CH 9: Imitators
Once a company creates a blue ocean and their performance is known…
Sooner or later there will be companies trying to imitate
As they succeed and expand the blue ocean, more companies will try to join themselves.
Barriers to Imitation
Some are operational, and others are cognitive.
Most often a blue ocean strategy will go without competition for 10 to 15 years.
This is due to imitation barriers rooted in blue ocean strategy

20. CH 9: Imitation Barriers
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 of legal permits block imitation.
High volume leads to rapid cost advantage for the value innovator, discouraging followers from entering the market

21. CH 9: When to Value- Innovate Again
Almost every blue strategy will be imitated.
Avoid the trap of competing by monitoring value curves on the strategy canvas.
This will signal when to value-innovate and when not to.
You should swim as far as possible in the blue ocean, making yourself a moving target, distancing yourself from your early imitators, and discouraging them in the process.
You need to dominate the blue ocean over your imitators for as long as possible.

22. Conclusion: Blue Ocean Strategy
Ch 2: Six Principles to Blue Ocean Strategy
Ch 3: Six Paths Framework
Ch 5: Go for the biggest catchment
Ch 6: The four tests: Utility, Price, Cost, Adoption
Ch 7: Breaking through Hurdles
Ch 9: Imitation Barriers