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blue ocean strategy ®

Go where profits and growth are – and where the competition isn’t

© Kim & Mauborgne

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

© 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

© 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

© Kim & Mauborgne

Strategy canvas of [yellow tail]   High

Premium wines

[yellow tail]

Budget wines


© 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?

© 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

© Kim & Mauborgne

blue ocean strategy ®

How to create uncontested market space and  make the competition irrelevant.

© Kim & Mauborgne

Blue Ocean Stratergy  

Upload May, 2010