1. Blue Ocean Strategy: Get the Strategic Sequence Right
Team 4 (11am): Haylee Berner, Sofia Paredes, Dylan Hawkins, Linna Wu

2. Introduction: Our New Challenge: We Will Discuss:
To build a robust business model that insures a healthy profit for a firm’s blue ocean idea
We Will Discuss:
The strategic sequence of validating blue ocean ideas to ensure commercial achievement.
How to reduce business model risk by understanding the strategic sequence and assessing blue ocean ideas

3. The Right Strategic Sequence
Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost, and adoption.
This allows them to build a viable business model and ensure that a company profits from the blue ocean it is creating.
Companies will dramatically reduce business model risk

4. Testing for Exceptional Utility: The Buyer Utility Map
Buyer Utility is essentially what a customer can get from your product.
There are six stages of the buyer experience cycle and also six levers of utility
The Buyer Utility Map outlines all the levers companies can pull to deliver exceptional utility to buyers as well as the various experiences buyers can have with a product or service
Managers can identify the full range of utility spaces that product or services can potentially fill.

5. The Six Stages of the Buyer Experience Cycle
A buyer’s experience from purchase to disposal
Encompassing a wide variety of specific experiences
Example of Purchasing: While you’re at a car dealership, you could also be browsing facebook marketplace for a vehicle
The Six Utility Levers:
Customer Productivity
Simplicity
Convenience
Risk
Fun and Image
Environmental Friendliness

6. Ford Model T. BEFORE the debut,
Automakers focused on building custom made luxury cars for the wealthy. The entire industry focused on image in the use phase; creating luxury cars for fashionable weekend outings
Only one of the thirty-six utility spaces was occupied

7. Strategic Pricing:
Understanding how to set the right strategic price firstly allows you to not only attract buyers in large numbers, but also help you to retain them.
-strategic pricing sets a product’s price based on the product’s value to the customer, or on competitive strategy, rather than on the cost of production.
- we defined strategic pricing as value creation. This approach recognizes that people often make purchasing decisions based more on psychology than on logic, and that what is most valuable to the customers.

8. Identifying the Price Corridor of the Target Mass
Step 1:
Identifying the Price Corridor of the Target Mass
3 alternative product/service types:
Same form
Different from, same function
Different form and function, same objective

9. Step 2: Specify a Level within the Price Corridor
You’ll need to determine how high a price you can afford to set within the price corridor without inviting competition to imitate your offering. You can estimate this through understanding two principles: 1. The level of legal protection through patents or copyrights.
2.the degree to which the company owns some exclusive assets or core capability. Such as unique design competence that can block imitation.
Upper-level pricing appeals to companies with strong patents and hard-to-imitate capabilities.
Mid-level pricing appeals to companies with uncertain patent and asset protection.
Low-level pricing appeals to companies with no such protection.

10. Target Costing
Price-minus costing, and not cost-plus pricing is a focus here. There are also three principle levers that help to hit the cost target:
Streamlining operations and introducing cost innovations from manufacturing and distribution
Partnering to secure needed capabilities while dropping cost structure
Changing the price model of the industry; e.g. from selling to renting

11. Adoption
Before investing in a new idea, the company must educate the fearful — the stakeholders. This includes:
Employees — make them aware of the threats posed and work with them to find ways of defusing the threats
Business Partners — openly discuss issues with them and convince them that they will gain more business by cooperating
The Public — engage in an open discussion about why the adoption of the new idea is necessary, and don’t let others take charge of the debate

12. The Blue Ocean Idea Index
This tool allows you to understand your blue ocean offering in relation to the sequence of utility, price, cost, and adoption.