1. Blue Ocean Strategy Chapter Three
Grant Moffett Dylan Taylor
Jenny Broussard Scott Bednorz

2. Path 2: Look Across Strategic Groups Within Industries
Traditionally price and performance
Mercedes, BMW, Jaguar, compete within strategic group

3. Strategic Groups In Fitness Industry
Traditional health clubs (LA Fitness, LifeTime)
At home fitness videos
Neither what women want

4. Curves Took a different approach
Acquired 2 million+ members and revenues at $1 billion mark
Blue ocean of the everyday woman’s struggling fitness needs

5. Curves Curves focuses on the strengths of the strategic group
Different system: Workout in circles, easy to use machines, quick workouts 30min

6. Path 3: Look Across The Chain Of Buyers
Purchasers: (office supplies corporate purchasing dept)
Users: (clothing industry end of the line customers)
Influencers: (pharmaceutical companies doctors)

7. Novo Nordisk
Challenged the idea of marketing drugs to doctors (influencers)
Marketed an insulin to the patients themselves (users)
NovoPen and NovoLet
From insulin producer to diabetes care

8. Bloomberg
Traditionally the business information provider industry focused on IT managers, or “purchasers”
Bloomberg provided information easy to interpret by traders and analysts “users”

9. Path 4: Look Across Complimentary Product and Service Offerings
Few products and services are used in a vacuum
Untapped value is often hidden in complementary products and services
Define total solution buyers seek when they choose a product or service

10. Nabi Hungarian bus company
In the industry, companies competed on low purchase price
NABI discovered high-cost element to municipalities was the costs that came after the purchase of a bus
NABI created a new bus made out of fiberglass

11. Nabi Value Curve

12. Other Examples Philips Electronics Borders and Barnes & Noble
Tea kettle industry in Britain
Lime scale found in tap water
Created a tea kettle with a mouth filter
Borders and Barnes & Noble
Transformed their product from just
the book to the pleasure of reading and
gaining knowledge
Lounges and coffee bars

13. Path 5: Look Across Functional or Emotional Appeal to Buyers
Most companies either compete on functional appeal or emotion appeal
Industries have trained customers what to expect
Emotionally oriented industries
Many extras that add price but not value
Functionally oriented industries
Commodity products with no emotional appeal

14. QB House Barbershop company in Asia
Asian barbershop industry is emotionally-oriented
A man’s haircut takes around one hour and costs between 3, ,000 yen ($27 to $45)
QB changed the industry to a highly functional one
Reduced the time to 10 minutes and about 1,000 yen ($9)

15. QB House Value Curve

16. CEMEX Third largest cement producer
The Mexican market was unattractive
More noncustomers than customers
Introduced Patrimonio Hoy program, which made their product more emotionally appealing
Tandas
Festivities
Increased demand for cement and growth for Cemex

17. Path 6: Look Across Time Industries are subject to external trends
Trends must:
Be decisive to your business
Be irreversible
Have a clear trajectory
Trends can be unpredictable and risky

18. Apple and the Music Industry
Illegal music file sharing
Capitalized on digital music and iPod
Launched iTunes store in 2003
Broke a key customer annoyance factor

19. Apple and iTunes Search and browsing function of iTunes was superior
Sold more than 70 million songs in its first year
Accounts for 70% of the legal music market
Needs to keep its sights on evolving mass market

20. Cisco Systems Capitalized on high-speed data exchange
Internet users were doubling every 100 days
Today more than 80 percent of all traffic on the Internet goes through Cisco’s products

21. Conceiving New Market Space

22. ExxonMobil
What trends have a high probability of impacting ExxonMobil or any other oil company?
What trends or technology may evolve in a clear trajectory?

23. ExxonMobil Quiz
Take the quiz: