2. Academic Journey
E-Business MBA Program – ISC Paris
University College Cork
Course of Blue Ocean
Strategy
February 21st , 2012
Professor François Cazals
2
3. Agenda
ISC Paris School of
Management
The Professor
Competition-based
strategy
A little film
Blue Ocean Strategy
3
4. ISC Paris group
1800 students « grande
école »
250 students MBA’s
Business Executive
MBA
School Education
4
5. François Cazals
CEO Distriforce
ISC Paris
Affiliate Professor
Head
ISC Executive Education
E-Business MBA Program
Speaker
HEC Paris Executive
fcazals@iscparis.com Education
Twitter: @distriforce ESSEC Paris Executive
Blog: cazals.fr Education
5
8. Subtle War Brutal War
Blue Red
“To subdue the enemy “ War is an act of violence
without fighting is the acme intended to compel our
of skill”. opponent to fulfill our will”.
Sun Tzu (544-496 BC J.-C.) Clausewitz (1780-1831)
8
9. A founding principle
“Competition is at the core
of the success or failure of
firms”.
1st sentence of Michael Porter’s
most important book
9
Michael PORTER
10. Two generic strategies
Low Cost Differentiation
Paris-Dublin
Ryanair 55 €
Air France 286 €
10
12. The Book and the Authors
Prof Chan Kim
Prof Renée
Mauborgne
12
13. 10
Strategy Canvas
9
8
The value curve, the basic
component of the strategy
7 canvas, is a graphic
6 depiction of a company’s
relative performance across
5
its industries factors of
4 competition.
3
2
1
0
Comp Fact 1 Comp Fact 2 Comp Fact 3 Comp Fact 4 Comp Fact 5 Comp Fact 6 Comp Fact 7 Comp Fact 8
Firm Competitor
13
14. Strategic corridor
10
9
8
7
6
5
Corridor
4
3
2
1
0
Var 1 Var 2 Var 3 Var 4 Var 5 Var 6 Var 7 Var 8
Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Comp 6
14
15. Industry Cycle
Start Growth Maturity Decline
Loyalty
One to One
Innovation
Low Cost
15
16. Red Ocean Vs. Blue Ocean
Compete in existing market Create uncontested market
space space
Beat the competition Make the competition
Exploit existing demand irrelevant
Make the value-cost trade- Create and capture new
off demand
Align the whole system of a Break the value-cost trade-
firm’s activities with its off
strategic choice of Align the whole system of a
differentiation or low cost firm’s activities in pursuit of
differentiation and low cost
17. 4 actions framework
Reduce
Create a
new
Eliminate
value
Create
curve
Raise
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18. Raise
What factors
should be raised
well beyond the
industry standard?
Eliminate Create
What factors What factors should
should be be created that the
eliminated that the industry has never
industry has taken offered?
for granted?
Reduce
What factors
should be reduced
well below the
industry standard?
19. 6 Paths Framework Head-to-head competition Blue Ocean Creation
Focuses on rivals within its Looks across alternative
Industry industry industries
Focuses on competitive Looks across strategic
Strategic Group position within strategic groups within industry
group
Focuses on better serving Redefines the industry
Buyer Group the buyer group buyer group
Focuses on maximizing the Looks across to
Scope of product or value of product and service complementary product
service offering offerings within the bounds and service offerings
of its industry
Focuses on improving price Rethinks the functional-
Functional-Emotional performance within the emotional orientation of its
orientation functional-emotional industry
orientation of its industry
Focuses on adapting to Participates in shaping
Time external trends as they external trends over time
occur
19
20. Look across alternative
industries
Rent a apartment
+
Go to the hotel
= Corporate Apartements
= apart-hotel concept 20
34. Blue ocean
Variables iPad
Price 489 €
Weight 0,613 kg
Screen 9,7 inches
Hard Drive 64 Go
Connectivity 3/10
Keyboard No
Design 9/10
Touch New
interface
iCloud New
AppStore New
Market Touch Pads 34
40. Exercise
• 1. List Factors of
Competition
• 2. Top 2 or 3 in ERRC
Grid Quadrants
• Clearly define the
group of “non-
customer” that you are
going after.