2. Clustermeeting 4 Blue Ocean Strategy 9 mei 2012 De Barrier Houthalen Voorzitter: dhr. Matty Zadnikar, Z-Group Professor: Prof. dr. Wim Vanhaverbeke, UHasselt Spreker: dhr. Jo Nelissen, ABN Klimatisatie

3. Blue Ocean Strategy Go where the profits and growth are - and where the competition isn’t W. Chan Kim & Renée Mauborgne

4. Analytical tools and frameworks

5. Strategy Canvas High Low PriceUse of enological terminology Above-the-line marketing Aging quality Vineyard prestige and legacy Wine complexity Wine range Figure 2-1

6. Price Fun & humor Multiple productions Artistic music & dance Aisle concessions Animal shows Star Performers Multiple show arenas High Low Ringling Bros. & Barnum & Bailey The strategy canvas of Cirque du Soleil Theme Refined watching enjoinment Thrills & danger Unique venue Cirque du Soleil Smaller Regional Circuses

7. Strategy Canvas High Low

8. 8 What factors should be eliminated that the industry has taken for granted? Eliminate What factors should be reduced well below the industry standard? Reduce What factors should be created that the industry has never offered? Create What factors should be raised well beyond the industry standard? Raise Four Actions Framework: Key to Value Curve The key to discovering a new value curve lies in answering four basic questions

9. BOS Logic: Reconstruct market boundaries Industry Focuses on rivals within its industry Strategic Group Focuses on competitive position within strategic group Buyer Group Focuses on better serving the buyer group Scope of Product and Service Offerings Focuses on maximizing the value of product and service offerings within the bounds of its industry Functional-emotional Orientation of an Industry Focuses on improving price- performance with the functional- emotional orientation of this industry Time/Trends Focuses on adapting to external trends as they occur Looks across alternative industries Looks across strategic groups within its industry Redefines the buyer group of the industry Looks across to complementary product and service offerings that go beyond the bounds of its industry Rethinks the functional-emotional orientation of its industry Participation in shaping external trends over time Boundaries of Competition Head-to-Head Competition Creating New Market Space

10. Four Steps of Visualizing Strategy 1.Visual Awakening 2.Visual Exploration 3.Visual Strategy Fair 4.Visual Communication Compare your business with your competitors’ by drawing your “as is” strategy canvas. See where your strategy needs to change Go into the field to explore the six paths to creating blue oceans. Observe the distinctive advantages of alternative products and services. See which factors you should eliminate, create, or change. Draw your “to be” strategy canvas based on insights from field observations. Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers. Use feedback to build the best “to be” future strategy. Distribute your before-and-after strategic profiles on one page for easy comparison. Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

11. Three Tiers of Customers There is a universe of noncustomers which can be turned into customers to offer a big blue ocean market. 1st tier: “Soon-to-be” noncustomers who are on the edge of your market 2nd tier: “Refusing” noncustomers who consciously choose against your market 3rd tier: “Unexplored” noncustomers who are in markets distant from yours Your Market First Tier Second Tier Third Tier

12. BOS Logic: Get the strategic sequence right Buyer utility Is there exceptional buyer utility in your business idea? Price Is your price easily accessible to the mass of buyers? Cost Can you attain your cost target to profit at your strategic price? Adoption What are the adoption hurdles in actualizing your business idea? Are you addressing them up front? A Commercially Viable Blue Ocean Idea No  Rethink Yes No  Rethink

13. Buyer Utility Map 1.Purchase 2.Delivery 3.Use 4.Supplements 5.Maintenance 6.Disposal Customer Productivity Simplicity Convenience Risk Fun and Image Environmental friendliness The Six Stages of the Buyer Experience Cycle The Six Utility Levers

14. Buyer Experience Cycle. PurchaseDeliveryUseSupplementsMaintenanceDisposal How long does it take to find the product you need? Is the place of purchase attractive and accessible? How secure is the transaction environment? How rapidly can you make a purchase? How long does it take to get the product delivered? How difficult is it to unpack and install the new product? Do buyers have to arrange delivery themselves? If yes, how costly and difficult is this? Does the product require training or expert assistance? Is the product easy to store when not in use? How effective are the product’s features and functions? Does the product or service deliver far more power or options than required by the average user? Is in overcharged with bells and whistles? Do you need other products and services to make this product work? If so, how costly are they? How much time do they take? How easy are they to obtain? Does the product require external maintenance? How easy is it to maintain and upgrade the product? How costly is maintenance? Does use of the product create waste items? How easy is it to dispose of the product? Are there legal or environmenta l issues in disposing of the product safely? How costly is disposal?

15. Uncovering Blocks to Buyer Utility PurchaseDeliveryUseSupple- ments Mainte- nance Disposal Customer Productivity:In which stage are the biggest blocks to customer productivity? Simplicity:In which stages are the biggest blocks to simplicity? Convenience:In which stage are the biggest blocks to convenience? Risk:In which stage are the biggest blocks to reducing risks? Fun and Image:In which stage are the biggest blocks to fun and image? Environmental Friendliness: In which stage are the biggest blocks to environmental friendliness?

16. Profit Model of Blue Ocean Strategy The profit model of blue ocean strategy shows how value innovation typically maximizes profit by using the three levers of strategic price, target cost, and pricing innovation. The Strategic Price The Target Profit The Target Cost Streamlining and Cost Innovations Partnering Pricing Innovation