blue ocean strategy mayra garcia cory logan gary taylor nick watkins lindsey pacatte garrett...

Blue Ocean StrategyBlue Ocean StrategyMayra Garcia Mayra Garcia

Cory LoganCory LoganGary TaylorGary Taylor

Nick WatkinsNick WatkinsLindsey PacatteLindsey Pacatte

Garrett MatthewsGarrett MatthewsDavid HaywardDavid Hayward

Red Oceans vs. Blue OceansRed Oceans vs. Blue Oceans

What are Red Oceans?What are Red Oceans?► Industries that are already in existenceIndustries that are already in existence► Limited demandLimited demand► Firms compete to capture more market Firms compete to capture more market

shareshare► Limited room for growth Limited room for growth ► Limited outlook for profit growthLimited outlook for profit growth► Most strategy is developed to compete in Most strategy is developed to compete in

Red OceansRed Oceans

Red Oceans vs. Blue OceansRed Oceans vs. Blue Oceans

What are Blue Oceans?What are Blue Oceans?► Are untapped market spaceAre untapped market space► Unlimited potential for growth in demandUnlimited potential for growth in demand► Room for highly profitable growthRoom for highly profitable growth► Largely unchartedLargely uncharted► Very little research into creating these Very little research into creating these

marketsmarkets

New Market SpaceNew Market Space

Where are Blue Oceans found?Where are Blue Oceans found?► Some are created well beyond existing Some are created well beyond existing

industriesindustries► Some are created within established red Some are created within established red

oceans by expanding industry boundariesoceans by expanding industry boundaries► Increasingly important for existing firms to Increasingly important for existing firms to

create Blue Oceanscreate Blue Oceans

Continuous Creation of Blue Continuous Creation of Blue OceansOceans

Although the term Blue oceans is Although the term Blue oceans is newnew


► Industries never stand still. Industries never stand still.

► Operations Improve, and markets expand.Operations Improve, and markets expand.

► History states we have underestimated to History states we have underestimated to create new industries create new industries

► Re-create existing ones.Re-create existing ones.


► Flying to a new beatFlying to a new beat

► Cheeky ads, funky staff attitudeCheeky ads, funky staff attitude

► Easy online booking has kept planes fullEasy online booking has kept planes full

► 15 % profit margin on 36 million in revenues15 % profit margin on 36 million in revenues


► Air Asia is an idea whose time has Air Asia is an idea whose time has come.come.

► "I think the tyranny of traditional "I think the tyranny of traditional airlines is about to end.“ Tony airlines is about to end.“ Tony FernandezFernandez


► Positioning an organization to have a Positioning an organization to have a competitive advantagecompetitive advantage

► Military referencesMilitary references

► Chief “officers” in the “headquarters”Chief “officers” in the “headquarters”

► industry shows us the market has never industry shows us the market has never been constant been constant


►To focus on Red Oceans is accepting To focus on Red Oceans is accepting the key constraining factors of warthe key constraining factors of war

►The need to beat the enemyThe need to beat the enemy

►To deny the strength of the business To deny the strength of the business worldworld

Impact of Creating blue Impact of Creating blue oceansoceans

►The authors attempted to quantify the The authors attempted to quantify the impact of creating blue oceans on a impact of creating blue oceans on a companies growth in pertaining to companies growth in pertaining to profits and revenuesprofits and revenues

►Study was done on business launches Study was done on business launches of 108 various companiesof 108 various companies

The Profit and Growth The Profit and Growth Consequences of Creating Blue Consequences of Creating Blue

OceansOceans

86%

62%

The Rising Imperative of The Rising Imperative of Creating Blue OceansCreating Blue Oceans

1.Accelerated Technology; supply 1.Accelerated Technology; supply exceeds demandexceeds demand

Advances in TechnologyAdvances in Technology

► TransportationTransportation assembly lines assembly lines

► CommunicationCommunication WirelessWireless

► FinanceFinance 80% of transactions done by computer80% of transactions done by computer ATMs ATMs

► AgricultureAgriculture Tractors and transpondersTractors and transponders

► BusinessBusiness Word processingWord processing LaptopsLaptops



2.Globalization; niche markets disappear2.Globalization; niche markets disappear

Aldi Looks to U.S for GrowthAldi Looks to U.S for Growth

•quality merchandise•the lowest possible prices• guaranteed satisfaction

•Pledge highest quality for the lowest price.• satisfaction are always DOUBLE guaranteed

“Incredible Values Everyday”



2.Globalization; niche markets disappear2.Globalization; niche markets disappear

3.Accelerated Commoditization of 3.Accelerated Commoditization of products and services; brands become products and services; brands become more similarmore similar

Is one product truly different Is one product truly different than the other?than the other?

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1.1. Accelerated Technology; supply exceeds Accelerated Technology; supply exceeds demanddemand

2.2. Globalization makes markets dissappearGlobalization makes markets dissappear

3.3. Accelerated Commoditization of products Accelerated Commoditization of products and services; brands become more and services; brands become more similarsimilar

4.4. Increase in price wars; selections based Increase in price wars; selections based on priceon price

5.5. Shrinking profit marginsShrinking profit margins

From Company and Industry From Company and Industry toto

Strategic MoveStrategic Move

Is there a systematic approach to Is there a systematic approach to achieve andachieve and

sustain high performance?sustain high performance?

► Past Company PerformancePast Company Performance► Growing IndustriesGrowing Industries

In Search of ExcellenceIn Search of Excellence

►Focused on 8 themes that led to Focused on 8 themes that led to Successful CompaniesSuccessful Companies

►Wang Labs-Wang Labs- During the 1950s and 1960s was strong During the 1950s and 1960s was strong

rival of a growing IBMrival of a growing IBM

Built to LastBuilt to Last

►Focused on the habits of Focused on the habits of successful visionary companiessuccessful visionary companies

►The companies that fit the criteria The companies that fit the criteria were in growing industrieswere in growing industries

Moving to Blue OceansMoving to Blue Oceans

►A Strategic Move-A Strategic Move- A set of managerial actions and decisions A set of managerial actions and decisions

involved in making a major market-involved in making a major market-creating business offering.creating business offering.

►These strategic moves create and These strategic moves create and capture new market spacecapture new market space

VALUE INNOVATIONVALUE INNOVATION

““The Cornerstone of Blue Ocean Strategy”The Cornerstone of Blue Ocean Strategy”► Blue OceanBlue Ocean

Create uncontested market spaceCreate uncontested market space Make the competition irrelevantMake the competition irrelevant Create and capture new demandCreate and capture new demand Break the value-cost trade-offBreak the value-cost trade-off

► Red OceanRed Ocean Compete in existing market spaceCompete in existing market space Beat the competitionBeat the competition Exploit existing demandExploit existing demand Make the value-cost trade-offMake the value-cost trade-off


► Value without innovationValue without innovation Value creationValue creation

► Innovation without valueInnovation without value Technology driven, market pioneeringTechnology driven, market pioneering

► Defies one of the most commonly accepted Defies one of the most commonly accepted dogmas of competition based strategydogmas of competition based strategy Value-cost trade-offValue-cost trade-off


““The Simultaneous Pursuit of Differentiation and Low Cost”The Simultaneous Pursuit of Differentiation and Low Cost”

COSTS

BUYER VALUE

VALUE INNOVATION


““Cirque du Soleil”Cirque du Soleil”► Is it circus, opera, theater, ballet, or a Broadway Is it circus, opera, theater, ballet, or a Broadway

show?show?

Formulating and ExecutingFormulating and Executing

►Maximize Opportunity, Minimize RiskMaximize Opportunity, Minimize Risk

► Unbalanced success in Red Ocean Unbalanced success in Red Ocean because of tools and frameworks because of tools and frameworks already in motionalready in motion

►Companies do not act seriously on Companies do not act seriously on creating blue oceanscreating blue oceans

PreviewPreview

Ch. 2: analytical tools and frameworkCh. 2: analytical tools and framework

Ch. 3: search risk, conventional boundariesCh. 3: search risk, conventional boundaries

Ch. 4: planning risk, four-step planningCh. 4: planning risk, four-step planning

Ch. 5: maximize size, minimize scale riskCh. 5: maximize size, minimize scale risk

Preview Cont’dPreview Cont’d

Ch. 6: business model risk, design, sequenceCh. 6: business model risk, design, sequence

Ch. 7: tipping point leadership, organizational Ch. 7: tipping point leadership, organizational riskrisk

Ch. 8: fair process, management riskCh. 8: fair process, management risk

Ch. 9: sustainability and renewal issuesCh. 9: sustainability and renewal issues

Six Principles of BOSSix Principles of BOS

Formulation PrinciplesFormulation Principles• Reconstruct market boundariesReconstruct market boundaries• Focus on the big picture, not numbersFocus on the big picture, not numbers• Reach beyond existing demandReach beyond existing demand• Get the strategy sequence rightGet the strategy sequence rightExecution PrinciplesExecution Principles• Overcome key organizational hurdlesOvercome key organizational hurdles• Build execution into strategyBuild execution into strategy

blue ocean strategy mayra garcia cory logan gary taylor nick watkins lindsey pacatte garrett...

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