Blue Ocean Strategy practical application algorithms and methodology. Presentation at a conference by Gints Turlajs.

1. «Blue Ocean Strategy: its practical application and the possible use of mathematical methods.» Conference at the University of Latvia February 2 , 201 2 , Riga, Latvia Gints Turlajs MSc Econ, PhD candidate Accounting & Consulting Institute (www.aci.lv), General Manager Email: [email_address] , Telephone: +371 29409509

2. «Zilā okeāna stratēģija: tās praktiskais pielietojums un iespējamā matemātisko metožu izmantošana.» LU konference 2. februāris , 201 2 , R ī ga, Latvi j a Gints Turlajs MSc Econ, doktora grāda pretendents Accounting & Consulting Institute (www.aci.lv), Vadītājs E pasts : [email_address] , Tele fons : +371 29409509

7. Red Ocean Versus Blue Ocean St ra tegy In the red ocean, differentiation costs because firms compete with the same best-practice principle. Here, the strategic choices for firms are to pursue either differentiation or low cost. In the reconstructionist world, however, the strategic aim is to create new best-practice rules by breaking the existing value-cost trade-off and thereby creating blue ocean. 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 firm’s activities with its strategic choice of differentiation or low cost. Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

9. Strategy Canvas High Low Price Use of enological terminology Above-the-line marketing Aging quality Vineyard prestige and legacy Wine complexity Wine range Easy to drink

10. Decision steps

12. Most well known game theory problem – prisoner’s dilemma

19. Decision sequency