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Blue Ocean Strategy
     Summary
                    by Jay Robinson



Source: Blue Ocean Strategy
by W. Chan Kim & Renée Mauborgne
Red Ocean: Companies compete for customers




   Chapter 1
Blue Ocean: Company creates new market

Chapter 1
Value Innovation


            Decrease costs



                                GOAL


            Increase value to
            consumer




Chapter 2
Analytical Tools and Frameworks

 • Strategy Canvas
 • Four Actions Framework
 • Eliminate-Reduce-Raise-Create Grid
3 Characteristics of Blue Ocean Strategy

 1. Focus
 2. Divergence
 3. Compelling Tag line
 Chapter 2
Strategy Canvas



V
a
l
u
e


                    Variables
    Chapter 2
Four Actions Framework

                Reduce factors
                  below the
                  standard

  Eliminate         New             Create
factors taken       Value        factors never
 for granted        Curve        before offered


                Raise factors
                well below the
                  standard

Chapter 2
Eliminate-Reduce-Raise-Create

                 Eliminate       Raise
             •               •
             •               •
             •               •

                 Reduce          Create
             •               •
             •               •
             •               •

 Chapter 2
Reconstruct Market Boundaries
    Look Across Alternative Industries
    Look Across Strategic Groups Within
      Industries
    Look Across the Chain of Buyers
    Look Across Complementary Product and
      Service Offerings
    Look Across Functional or Emotional Appeal
      to Buyers
    Look Across Time
  Chapter 3
Visualize Strategy
  Visual Awakening; See where you are
  Visual Exploration; See how others see
     you
  Visual Strategy Fair; See where you could
     be
  Visual Communication; Draw a Map for
     everyone (Pioneer-Migrator-Settler
     Map)


Chapter 4
3 Tiers of Noncustomers
                     3rd Tier


                 2nd Tier

              1st Tier
            Your Market




Chapter 5
3 Tiers of Noncustomers
  1st Tier - “Soon-to-be” noncustomers


  2nd Tier - Those who consciously refuse
    your market


  3rd Tier - “Unexplored” noncustomers in
     distant markets


Chapter 5
Sequence of Blue Ocean Strategy
           Buyer utility
     Is there exceptional buyer
     utility in your business idea?

 No -- Rethink    Yes

                                      Price
                         Is your price easily
                         accessible to the mass of
                         buyers?

                    No -- Rethink      Yes

                                                        Cost
                                              Can you attain your cost
                                              target to profit at your
                                              strategic price?

                                        No -- Rethink     Yes

                                                                         Adoption                               A
                                                                                                    Yes   Commercially
                                                                 What are the adoption hurdles in
                                                                 actualizing your business idea?           Viable Blue
                                                                 Are you addressing them up                Ocean Idea
                                                                 front?
        Chapter 6                                           No -- Rethink
The Buyer Utility Map
                                            The Six Stages of the Buyer Experience Cycle

                                             1.        2.        3.        4.            5.          6.
                                          Purchase   Delivery   Use   Supplements   Maintenance   Disposal

                            Customer
                           productivity
The Six Utility Levers




                            Simplicity


                          Convenience


                              Risk


                          Fun and image


                          Environmental
                           friendliness




                         Chapter 6

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Blue Ocean Strategy Summary

  • 1. Blue Ocean Strategy Summary by Jay Robinson Source: Blue Ocean Strategy by W. Chan Kim & Renée Mauborgne
  • 2. Red Ocean: Companies compete for customers Chapter 1
  • 3. Blue Ocean: Company creates new market Chapter 1
  • 4. Value Innovation Decrease costs GOAL Increase value to consumer Chapter 2
  • 5. Analytical Tools and Frameworks • Strategy Canvas • Four Actions Framework • Eliminate-Reduce-Raise-Create Grid 3 Characteristics of Blue Ocean Strategy 1. Focus 2. Divergence 3. Compelling Tag line Chapter 2
  • 6. Strategy Canvas V a l u e Variables Chapter 2
  • 7. Four Actions Framework Reduce factors below the standard Eliminate New Create factors taken Value factors never for granted Curve before offered Raise factors well below the standard Chapter 2
  • 8. Eliminate-Reduce-Raise-Create Eliminate Raise • • • • • • Reduce Create • • • • • • Chapter 2
  • 9. Reconstruct Market Boundaries Look Across Alternative Industries Look Across Strategic Groups Within Industries Look Across the Chain of Buyers Look Across Complementary Product and Service Offerings Look Across Functional or Emotional Appeal to Buyers Look Across Time Chapter 3
  • 10. Visualize Strategy Visual Awakening; See where you are Visual Exploration; See how others see you Visual Strategy Fair; See where you could be Visual Communication; Draw a Map for everyone (Pioneer-Migrator-Settler Map) Chapter 4
  • 11. 3 Tiers of Noncustomers 3rd Tier 2nd Tier 1st Tier Your Market Chapter 5
  • 12. 3 Tiers of Noncustomers 1st Tier - “Soon-to-be” noncustomers 2nd Tier - Those who consciously refuse your market 3rd Tier - “Unexplored” noncustomers in distant markets Chapter 5
  • 13. Sequence of Blue Ocean Strategy Buyer utility Is there exceptional buyer utility in your business idea? No -- Rethink Yes Price Is your price easily accessible to the mass of buyers? No -- Rethink Yes Cost Can you attain your cost target to profit at your strategic price? No -- Rethink Yes Adoption A Yes Commercially What are the adoption hurdles in actualizing your business idea? Viable Blue Are you addressing them up Ocean Idea front? Chapter 6 No -- Rethink
  • 14. The Buyer Utility Map The Six Stages of the Buyer Experience Cycle 1. 2. 3. 4. 5. 6. Purchase Delivery Use Supplements Maintenance Disposal Customer productivity The Six Utility Levers Simplicity Convenience Risk Fun and image Environmental friendliness Chapter 6