1. 423110 Brooks Garner, Alex Mills, and Grayson Watson
Blue Ocean Strategy Chapter 6:
Get The Strategic Sequence Right
Team 4
Ford Motor Company
423110
Brooks Garner, Alex Mills, and Grayson Watson

2. Building their Blue Ocean Strategy
Buyer utility- Is there a compelling reason for the target mass of people to buy it?
Price- Don’t rely solely on price to create demand.
Cost- Can you produce your offering at the target cost and still earn a healthy profit margin.
Adoption- address your adoption hurdles up front.

3. Testing for Exceptional Utility
Philips CD-i was an engineering marvel that failed to offer people a compelling reason to buy it.
Don’t revel in the bells and whistles of new technology.
Bleeding-edge technology doesn’t necessarily relate to bleeding-edge utility
Typically, unless technology will make people’s lives simpler, more convenient, and more productive, then technology will not attract the masses no matter how many awards it wins.

4. 6 Stages of the Buyer Experience Cycle
Purchase- Time to find product? Is place of purchase accessible? How rapidly can you make the purchase?
Delivery- Delivery time? Difficulty to unpack and install?
Use- Requires training? How easy to store? How effective? Does it have excess things we don’t need?
Supplements- Need any other products to make it work? How costly? Time? Pain and effort? Easy to obtain?
Maintenance- Requires external maintenance? Easy to maintain or upgrade? Costly?
Disposal- Create waste items? Easy to dispose? Legal or environmental issues of disposing? Costly?

5. Ford uncovering the blocks to buyer utility
More than 500 automakers in the United States focused on building custom-made luxury autos for the wealthy.
Ford made the Model T and it was a car for every man.
All companies created cars that could not handle most roads during this time.
Ford beat the two utility blocks by creating a car that was easy to fix, dependable, durable, and a car for everyday use. This set them above all of the other companies in the United States.

6. From Exceptional Utility to Strategic Pricing
Changes in costs: R&D vs. MFG
“Volume generates higher returns”
Number of people using a product dictates value
Ideas are unlimited in who uses them
Excludability
Price must attract and retain customers

8. From Strategic Pricing to Target Costing
Price-MINUS Costing
Operations
Partnering
Price model

9. Price and Value Innovation
Begins with strategic price
Deduct target profit margin to arrive at target cost
Factor in cost innovations and partnerships
End with pricing innovation

10. From Utility, Price, and Cost to Adoption
Unbeatable business model is not enough for blue ocean
Blue Oceans challenge the status quo
Promotes fear and resistance among stakeholders, employees, partners, and general public
Must first educate the fearful

13. Employees
Failure to inform employees on new business idea can be catastrophic
Before companies go public with an idea they should make an effort to communicate to employees
Try and diffuse threats so everyone in the company wins
Keep them engaged/involved and reward employees when successful

14. Business Partners
Potentially more damaging than employees is fearful or hesitant business partners
Solve dilemmas by openly discussing issues
Properly incentivise partners to implement new ideas and systems which is usually done by proving increases in efficiency and profits

15. The General Public
New Business ideas can and will also spread to the general public
Especially dangerous if challenges social or political norms
Proactively educate the public about your new concept
Social Media a strong influencer in today's society
Key in all three aspects to have open and honest communication

16. Blue Ocean Idea Index

17. Once You Pass
Ready to shift gears from formulation to execution of strategy
Must bring entire company with you to execute new idea and depart from the past
It is challenging to ingrain a new process within a company, but must stick to it to see results

18. THANK YOU