blue ocean strategy ®
Go where profits and growth are – and where the competition isn’t
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Researching the history of blue ocean creation
•Data: 150 strategic moves, more than 30 industries, over 100 years (1800‐2000)
• Variables considered: industrial, organizational and strategic
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© Kim & Mauborgne
Red versus blue Red Ocean Strategy
Blue Ocean Strategy
Compete in existing market space
Create uncontested market space
Beat the competition
Make the competition irrelevant
Exploit existing demand
Create and capture new demand
Make the value‐cost trade‐off
Break the value‐cost trade‐off
Align the whole system of a company’s activities with its strategic choice of differentiation or low cost
Align the whole system of a company’s activities in pursuit of differentiation and low cost
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© Kim & Mauborgne
Six paths to blue ocean strategy Industry Strategic group
From Competing Within
Buyer group Scope of product or service offering
To Creating Across
Functional‐emotional orientation of an industry Time
The six conventional boundaries of competition www.blueoceanstrategy.com
© Kim & Mauborgne
Strategy canvas of [yellow tail] High
Premium wines
[yellow tail]
Budget wines
Low
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© Kim & Mauborgne
Four actions framework Reduce Which factors should be reduced well below the industry’s standard?
Eliminate Which of factors that the industry takes for granted should be eliminated?
Create A New Value Curve
Which factors should be created that the industry has never offered?
Raise Which factors should be raised well above the industry’s standard? www.blueoceanstrategy.com
© Kim & Mauborgne
Minimizing risks & maximizing opportunities in formulation & executing blue ocean creation Formulation Principles
Formulation Risks
Reconstruct market boundaries
Search Risk
Focus on the big picture, not the numbers
Planning Risk
Reach beyond existing demand
Scale Risk
Get the strategic sequence right
Business Model Risk
Execution Principles
Execution Risks
Overcome key organizational hurdles
Organizational Risk
Build execution into strategy
Management Risk
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© Kim & Mauborgne
blue ocean strategy ®
How to create uncontested market space and make the competition irrelevant. www.blueoceanstrategy.com
© Kim & Mauborgne