1. Blue Ocean Strategy
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2. Contents
1. Blue Ocean Vs. Red Ocean Strategy
2. Blue Ocean Strategy Tools
3. Strategy Canvas and Four Action Framework
4. Six Principles of Blue Ocean Strategy
5. Formulating Blue Ocean Strategy
6. Executing Blue Ocean Strategy
I
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3. Blue Ocean Vs. Red Ocean
Strategy
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4. Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
•• Create uncontested
Create uncontested •• Compete in existing
Compete in existing
market space
market space market space
market space
•• Make the competition
Make the competition •• Beat the competition
Beat the competition
irrelevant
irrelevant
•• Create and capture
Create and capture •• Exploit existing
Exploit existing
new demand
new demand demand
demand
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5. Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
•• Break the value- cost
Break the value- cost •• Make the value-cost
Make the value-cost
trade off
trade off trade off
trade off
•• Align the whole system
Align the whole system •• Align the whole system
Align the whole system
of a firm’s activities with
of a firm’s activities with of a firm’s activities with
of a firm’s activities with
its strategic choice of
its strategic choice of its strategic choice of
its strategic choice of
differentiation and low
differentiation and low differentiation or low
differentiation or low
cost
cost cost
cost
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6. Blue Ocean Strategy Tools
• A diagnostic tool for building a
Strategy compelling blue ocean strategy
Canvas • It captures the current state of play in
the known market space
• Allow you to understand :
• where the competition is currently
investing
• the factors the industry currently
competes on in product, service and
delivery
• what customers receive from existing
competitive offerings on the market
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7. Four Action Framework
Eliminate Raise
Reduce Create
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8. Four Action Framework
Which of the factors that the industry
Eliminate takes for granted should be eliminated?
Which factors should be reduced well
Reduce below the industry’s standard?
Which factors should be raised well
Raise above the industry’s standard?
Which factors should be created that
Create the industry has never offered?
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9. Four Action Framework
The Case of Cirque du Soleil (A Circus Company)
Eliminate Reduce
• Star performers • Fun and humor
• Animal shows • Thrill and danger
• Aisle concession sales
• Multiple show arenas
Create Raise
• Theme • Unique venue
• Refined environment
• Multiple productions
• Artistic music and dance
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10. Six Principles of Blue Ocean Strategy
Formulation Principles Execution Principles
1. Reconstruct market 5. Overcome key
boundaries organizational
2. Focus on the big picture, hurdles
not the numbers 6. Build execution into
3. Reach beyond existing strategy
demand
4. Get the strategic
sequence right
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11. 1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
•Focuses on maximizing the • Looks across to
complementary product
•Focuses on adapting to and service offerings
• Participates in shaping
external trends over time
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12. 2. Focus on the Big Picture, not the Numbers
• Compare your business with your
Visual competitors’ by drawing your “as is”
Awakening strategy canvas
• See where your strategy needs to
change
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13. 3. Reach Beyond Existing Demand
• First tier: “Soon to be” non-
customers who are the edge of
your market, waiting to jump ship
The Three
Tier of Non- • Second tier: “Refusing” non-
customers customers who consciously
choose against your market
• Third tier: “Unexplored” non-
customers who are in markets
distant from yours
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14. Executing
Blue Ocean Strategy
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15. End of Material
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