what is blue ocean strategy?

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What is a Blue Ocean?

Industries not in existence today

Untapped market demand

Unknown market space

Blue Ocean generally refers to the new, uncontested market space that creates new consumer value


What is Strategy?

Value Proposition

Profit Proposition

People Proposition

Blue Ocean Strategy defines “Strategy” as the development and alignment of the three propositions to reconstruct the industrial and economic environment in which an organization operates:

1. A Value Proposition that attracts buyers;

2. A Profit Proposition that enables the company to make money out of the value proposition;

3. A People Proposition that motivates those working for the company to execute the strategy.


What is Blue Ocean Strategy?

BOS is the result of a decade-long study of:

150 strategic moves

more than 30 industries

over 100 years (1800 2000)‐

The aim of BOS is to create new market space or a blue ocean, thereby making the competition irrelevant.

BOS offers systematic and reproducible methodologies and processes in pursuit of blue oceans.

BOS covers both strategy formulation and strategy execution.

[Renee Mauborgne & W. Chan Kim]


Red Ocean VS Blue Ocean Strategy

vsRed OceanCompete in existing market

space

Constantly outperform our rivalry

Confined by Rule –Differentiation OR Low Cost

Exploit existing demand

Blue OceanCreate own uncontested market

space

Make competition irrelevant

Differentiation AND Low Cost (Value Innovation)

Create and capture new demand


The Profit and Growth consequences of creating Blue Oceans

Me-Too & Value Improvement Blue Ocean Creation

Study of business launches - 108 cases

86%

14%

Business Launch

Revenue Impact

ProfitImpact

62%

38%

39%

61%


Value Innovation is a cornerstone of BOSIt is about driving costs down while simultaneously driving value up for buyers and the company

Costs

Buyer Value

Value Innovation

Cost savings thanks to the elimination or reduction of non essential value attributes

Costs advantages due to economies of scale generated by high volumes and obtained

thanks to a price which appeals to the largest market catchment

Superior value obtained thanks to the raise and/or creation of value attributes that really

matter to the mass of buyers

The obtainable benefits


Six principles of Blue Ocean Strategy

Search Risk

Planning Risk

Scale Risk

BusinessModel Risk

Strategy Formulation

Reconstruct market boundaries

Focus on the big picture, not the numbers

Reach beyond existing demand

Get the strategic sequence right

Strategy Execution

Organizational

Risk

Overcome key organizational hurdles

Build execution into strategy

ManagementRisk


Blue Ocean Strategy

“Don’t Compete with Rivals –

Make Them Irrelevant “

W. Chan Kim and Renée Mauborgne


Thank You!

UCSI Blue Ocean Strategy Regional Centre is the Official Regional Licensee to conduct commercial Blue Ocean Strategy activities in:

Malaysia | Australia | Canada | China | India | Indonesia | Philippines | Singapore |Taiwan | Thailand

@ucsibosrc#bethebos www.ucsiblueoceanstrategy.com

UCSI CONSULTING (774433-W)

UCSI University, KL Campus,North Wing, Jalan Choo Lip Kung,

Taman Taynton View, Cheras, 56000Kuala Lumpur, Malaysia.