group 4 strategic ppt blue ocean

7/30/2019 Group 4 Strategic Ppt Blue Ocean

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Blue Ocean StrategyGROUP 4


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What is Blue Ocean Strategy ?

Result of a decade long study of 150 strategic movesspanning more than 30 industries over 100 years.

BOS relentlessly pursues for differentiation and low cost

Aim of BOS is not to outperform the competition in theexisting industry but to create new market space orblue ocean thereby making the competition irrelevant.


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BLUE OCEAN STRATEGY

FINDINGS

Blue oceans are not about technology innovations

Often created by incumbents and not within their core business

Creating blue ocean builds brands


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Defining characteristics

Creators of blue oceans never use competition as theirbenchmark

No trade off between value and cost


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Red Ocean Strategy

It refers to the known market space , I e industriesthat are in existence today

Industry boundaries are defined and accepted

Companies try to outperform their rivals by grabbing alarger chunk of the market of offering marginal changesin price or the product.


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COMPARISON

RED OCEAN

Compete in existing marketplace

Beat the competition

Exploit existing demand

Make the value-cost tradeoff

BLUE OCEAN

Create uncontested marketspace

Make the competitionirrelevant

Create and capture newdemand

Break the value cost tradeoff


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Value Innovation: The Cornerstone of Blue Ocean Strategy

Value innovation is created in the region where acompanys actions favourably affect both its coststructure and its value proposition to buyers.

Cost savings are made by eliminating and reducing the factors an industry competes on.

Buyer value is lifted by raising and creating elementsthe industry has never offered.

Over time, costs are reduced further as scaleeconomies kick in due to the high sales volumes thatsuperior value generates.


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The Simultaneous Pursuit of Differentiation and Low Cost


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Blue Ocean strategy tools

Strategy Canvas

Four action framework


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Strategy CanvasA diagnostic tool for building a compelling blue oceanstrategy.

It captures the current state of play in the known

market spaceIt allows you to understand:

Where the competition is currently investing

The factors the industry currently competes on in product ,

service and deliveryWhat customers receive from existing competitive offeringsin the market.


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Four Action Framework


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Six principles of BOS

formulation principles risk factor

1 reconstruct market boundaries search risk

2 focus on the big picture, not the numbers planning risk

3 reach beyond existing demand scale risk

4 get the strategic sequence right business model risk

evaluation principles risk factor5 overcome key organizational hurdles organizational risk

6 build execution into strategy management risk


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Formulating Blue OceanStrategy


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1.Reconstruct market boundaries

1. Look across alternative industries

2. Look across strategic group within the industry

3. Redefine the industry buyer group

4. Look across to complementary product and serviceofferings.

5. Participate in shaping external trends over time.


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2.Focus on the big picture not thenumbers

Four steps of visualising strategy are

Visual Awakening

Visual Exploration

Visual strategy fair

Visual Communication


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Visual Awakening

Compare your business with your competitors bydrawing out the strategy canvas

See where your strategy needs to change


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Visual exploration

Go to the field to explore the six paths to creating blueoceans

Observe the distinctive advantages of alternativeproducts and services.

See which factors you should eliminate ,create orchange.


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Visual Strategy Fair

Draw your to be strategy canvas based on insightsfrom field observations

Get feedback on alternative strategy canvases fromcustomers , competitors and non customers.

Draw feedback to build the best to be future strategy


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Visual Communication

Distribute your before and after strategic profiles onone page for easy communication.

Support those projects and operational moves thatallow your company to close the gap and actualise thenew strategy.


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3.Reach beyond existing demand

First tier Soon to be non customers who are on theedge of your market waiting to jump.

Second tier Refusing non customers who consciouslychose against your company

Third tier Unexplored non customers who are inmarkets distant from yours.


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4.Get the strategic sequenceright.

1. Buyer utility- Is there an exceptional buyer utility inyour business idea?

2. Price Is your price easily accessible by mass of thebuyers.

3. Cost Can you attain your cost to target profit at yourstrategic price?

4. Adoption What are the adoption hurdles inactualizing your business ideas?


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5.Overcome key organizationalhurdles

Cognitive hurdle

Resource hurdle

Motivational hurdle

Political hurdle


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Cognitive hurdle(status quo)

Ride the electric sewer

Meet the disgruntled customers


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Resource hurdle

Redistribute resources to your hotspots

Redirect resources from your cold spots

Engage in horse trading


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Motivational hurdles

Zoom in on kingpins(key influencers)

Place key influencers on a fishbowl

Atomize the organization to change itself.


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Political hurdle

Secure a leader in your top management team

Leverage your angels and silence your demons.


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6.Build Execution into strategy

Strategy formulation process Fair process involvingengagement, explanation , expectation and clarity.

Attitudes Trust and Commitment I feel my opinioncounts

Behavior Voluntary cooperation Ill go beyond thecall of duty

Strategy Execution Exceeds expectation self initiated


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EXAMPLE


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THANK YOU

group 4 strategic ppt blue ocean

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