1. Blue Ocean Strategy Chapter 4
Focus on the Big Picture, Not the Numbers

2. The Big Picture Focus on the Big Picture, Not the numbers
Use the strategy canvas
Blue Ocean strategies have three qualities
Focus
Divergence
Compelling tagline
The book starts off with the idea about looking at the bigger picture. this approach provides an opportunity for a wide range of people to express their creativity that could potentially lead to a blue ocean
The strategy canvas is one of the main tools used in this process. By building your strategic planning around the canvas, it allows you to focus on the bigger pictures as opposed to all the numbers. The strategy canvas does three things. It shows the strategic profile of and industry by showing the competitive factors, shows the strategic profile of competitors, and it shows the value curve, showing how you stack up compared to the competition.
Blue ocean strategies: focus, divergence, compelling tagline. A good strategy will clearly point out these three distinct things, which will help lead to a blue oecan

3. Difficulty of the Canvas
Drawing the strategy canvas is not an easy task
Four Steps
Visual Awakening
Visual Exploration
Visual Strategy Fair
Visual Communication
It is difficult to draw a strategy canvas. Managers tend to have an idea of how they are stacking up, but they may be focusing on the wrong competitive offerings. To draw up a good strategy canvas to lead to a blue ocean, there are four steps that should be taken. Step 1 is visual awakening, step 2 is visual exploration, step 3 is visual strategy fair, and the last step is visual communication. These are all important to developing a good working strategy canvas, and im gonna pass it on to….to tell you more about these.

4. European Financial Services
European Financial Services (EFS) is 150 year old service that adopted this method of developing strategy.
Because of the strategy it yielded a 30% revenue boost in the first year.
Is the example company used in the book.

5. Step 1: Visual Awakening
Problems
Its common mistake to discuss changes in strategy before resolving difference of opinion about the current state of play.
Executives are reluctant to accept the need for change
Compare side by side with your competitors by drawing your “as is” strategy
See where your strategy needs to be changed.

6. Step 2: Visual Exploration
Explore the six paths to creating a blue ocean.
1. Look across alternative industries
2. Look across strategic group within industry
3. Redefine the industry buyer group.
4. Look across to complementary products and service offerings.
5. Rethink the functional-emotional orientation of its industry.
6. Participate in shaping external trends over time.

7. Step 2: Visual Exploration cont.
Observe the advantages of alternative products and services.
See what factors your should eliminate, create, or change.
EFS sent managers to find information about how to create a blue ocean.

8. Step 3: Visual Strategy Fair
EFS held a visual strategy fair where both teams presented their strategy canvases
Attendees ranged from noncustomers to senior corporate executives
12 strategies were presented and after each judge was given 5 sticky notes to place next to their favorite and explain why they did not vote for the other value curves

9. Visual Strategy Fair Results
1/3 of what they thought were key competitive factors, were marginal to customers
1/3 were not well articulated or had been overlooked in the visual awakening phase
Executives needed to reassess assumptions, such as EFS’s separation of its online and traditional business
Following the strategy fair, the teams were able to draw a value curve that was a truer likeness of the existing strategic profile than anything they had produced earlier.
By collapsing its online and traditional businesses into one compelling offering, EFS substantially cut the operational complexity of its business model, making systematic execution far easier.

10. EFS Eliminate-Raise-Reduce-Create Grid
Relationship Management
Raise
Ease of use
Security
Accuracy
Speed
Market Commentary
Reduce
Account executives
Corporate dealers
Create
Confirmation
Tracking

11. Step 4: Visual Communication
EFS gave every employee a one-page picture showing its new and old strategic profiles so that everyone could see where to focus their efforts to create a compelling future.
The new picture became a reference point for all investment decisions.
Only ideas that would help EFS move from the old to the new value curve were approved.

12. Visualizing Strategy at the Corporate Level
When businesses presents their strategy canvases to one another, they deepen their understanding of the other businesses in the corporate portfolio.
Creation of the Value Innovation Program (VIP) Center
Various business units come together to typically discuss strategy canvases.

13. PMS Map
A visualizing strategy can help managers see future growth and profits.
Company’s are sorted into three different categories.
Pioneers- Blue ocean strategist most powerful source of profitable growth. Value curve diverges from competition.
Settlers- Have a “me to” approach to business, stuck in the red ocean. Value curve conforms to the basic shape of the industry.
Migrators- “more for less business approach, offer improved value but no innovative value. The try to extend the industries value curve

14. Innovation!!
The more settlers the better opportunity to value-innovate and create a blue ocean.

15. PMS MAP Shift your future growth to pioneers
Settlers generate cash but marginal growth.
Pioneers have much growth potential as a offset of growth.
Managers should manage their portfolios wisely with a balance between profitable growth and cach flows.

16. Overcoming the Limitations of Strategic Planning
Ideal Strategic Planning:
Collective wisdom building
Conversational
Building the big picture
Creative component
Motivational/invoking willing commitment
Existing Strategic Planning:
Top-down or bottom-up planning
Solely documentation-driven
Number-crunching exercises
Strictly analysis-driven
Bargaining-driven/producing negotiated commitment
Managers are often unhappy with existing strategic planning—the core activity of strategy.

17. “The soul never thinks without an image”
-Aristotle