1. Blue Ocean Strategy: Chapter 4 Jacob Felty Sabrea Hebb Alexandra Hill Shaady Ibrahim Callie Myers Colby Wulf

2. Visualizing Strategy Creating company strategy – Blue Ocean Strategy Increase Market Share, capture new segments (cut costs), and outline goals Focus on Big Picture

3. “Strategy Canvas” of the planning process 1)Strategic profile of industry (factors/ affect of competition) 2)Strategic profile of current/potential competitors 3)Invested factors of competition – Strategic profile completmentary qualities: » Focus/ divergence/ compelling tagline

4. Drawing Strategy Canvas 1.Visual Awakening 2.Visual Exploration 3.Visual Strategy Fair 4.Visual Communication

5. Visual Awakening Don’t change strategy without resolving different opinions Executives like status quo; slow to make changes Can see need for change with value curve – Reveals weaknesses, false choices Bring people together to discuss views, find needed strategy

6. Value Curves

8. Visual Exploration Get managers on the ground; meet people face-to-face “A company should never outsource its eyes” Go after customers and non- customers – Talk to them, see them in action – I.D. complimentary goods/services for bundling options (Kinepolis with childcare services) EFS surprised that relationship managers were Achilles heel – Customers wanted fast transaction confirmations

9. Visual Strategy Fair Executives consist of representatives of external constituencies – noncustomers, customers of competitors and demanding customers Presentations include pictures and limited to 10 minutes Transparent and immediate judging Emphasis on originality and clarity of pitches Markets have a basic set of needs and expected similar services – customers will forgo other needs if common needs are met

10. Visual Strategy Fair Allows value curves, shows existing strategic profile Future strategy can be focused on: ease of use, security, accuracy and speed Four actions to create value innovation: 1) Eliminate 2) Raise 3) Reduce 4) Create

11. Visual Communication Created after future strategy is set Communicate strategy in an easily understood manner Managers walk through the picture, explain what is eliminated, reduced, raised and created to produce a Blue Ocean Employees will become motivated when there is a clear, visual communication New picture becomes reference point for investment decisions, only ideas that help move the company forward from old to new value curves are allowed

12. Visualizing Strategy at the Corporate Level Using the Strategy Canvas Using the Pioneer-Migrator- Settler Map Overcoming the Limitations of Strategic Planning

13. Using the Strategy Canvas Samsung Electronics of Korea Value Innovation Program – Recorded progress from VIP program Ask yourself some questions – Draw then share strategy canvases

14. Using the Pioneer- Migrator-Settler Map Companies that create blue oceans are pioneers – Offer unprecedented value – Powerful sources of profitable growth Settlers  businesses whose value curves conform – “Me too” businesses – Stuck in the red Migrators  extend the industry’s curve – more for less – Improved value

15. PMS Map Settlers – Low growth trajectory – Fallen into a trap Competitive benchmarking Imitation Intense price competition Migrators – Reasonable growth – Risks being marginalized

16. Overcoming the Limitations of Strategic Planning Strategic planning  core activity of strategy Managers believe: – Strategic planning  collective wisdom – Building top down or bottom up – Conversational – Building the big picture Actually: – Creative component – Motivational – Viable alternatives

17. Current Event Coca Cola has over 100 products in almost every country around the world Pepsi, Snapple, and Monster all major competitors of Coca Cola What are Coca Cola plans for the future?

18. Discussion Questions 1. Do you think Coca Cola is a Pioneer, Migrator, or Settler? 2. Can you think of any companies that failed because they were “Settlers”?