Blue Ocean Strategy is about creating new market space and rendering competition irrelevant. It involves reconstructing market boundaries to make the competition meaningless and open up new demand. The key principles of Blue Ocean Strategy are to eliminate and reduce certain factors and raise and create others to open up a new value-cost frontier. By applying these principles, companies can pursue opportunities in untouched market spaces and make the competition irrelevant.
1. Blue Ocean Strategy
Prepared By : Nitish Raj
IIPM ; New Delhi
Mentor : Lauren Mathys ; Ph.D.
INSEAD
Founder Of Blue Crest Consulting(Switzerland)
Vice President : Merck Soreno International
2. Overview
• 7,50,000 species are yet to be discovered in
the world.
• As there is strategy, so there is industry
• Not that there is strategy, so there is
industry
• Productivity is not all explained by capital
and labour.
• Innovation and technological change comes
from the “Unternehmergeist”.
3. Innovation
• Process which leads an invention from the
idea to the market place – Joseph
Schumpeter
• Innovation an alliance between
research, marketing, instinct, imagination, p
roducts and industrial courage
• Value Innovation is the cornerstone of Blue
Ocean Strategy
4. Innovation In Terms Of Blue Ocean
Strategy
• Innovation when defined in terms of value
to the customers is:
Value = Utility- Price
This is sometimes also called value
innovation.
11. Ways To Change Customer Experience
Of Utilizing A Product
Helping a customer
to do things faster
or better
Contribute to No physical or
improve the intellectual
environment difficulty
Creating a
Easy to obtain or
particular image
use or dispose of
for the customer
Reduce financial
pressure
12. Secret Of Increasing The Customers
• Lower the cost to the minimum level
• Increase the value to the customer
Cost
Buyer
Value To
Customer
13. Six Path Framework For Choosing Industries
Using Blue Ocean Strategy When Applying
Innovative Idea
• Alternative Industries (SouthWest Airlines)
• Strategic Group Industry(French Budget
Hotel)
• Chain Of Buyers Industries(Nove Nordisk
Company)
• Complementary Services/Products
Industry(North American Bus Industries)
• Functional – Emotional Appeal Industries(The
Body Shop)
• Time/Trends Industries(Kimberly-Clark )
14. Hurdles Of Blue Ocean Strategy
Cognitive Resource
Motivational Political
15. Implementation Of BOS
• Value Innovation
• Tipping Point Leadership(To overcome the
4 hurdles mentioned in previous slide)
• Fair Process
16. Fair Process
The three E principles of Fair process are:
(a) Engagement
(b) Explanation
(c) Expectation Clarity
17. Choosing The Right Approach To BOS
High Blue Red Red
Resources Blue Depends On Blue
And Strategic
Capabilities Mindset
Low Unattractive Little Attractive
Attractive
18. How To Determine It Is A BOS
Other Strategy Blue Ocean Strategy
Structuralist Reconstructionist
Competing Creating
Focus On Existing Customer Focus On Non- Customer
Premium/ Low Pricing Strategic
Cost+ Pricing Target
Value Improvement Align people, profit, value
proposition
