blue ocean strategy (method templates)

4. Implementation (who will and how will the plan be implemented)?

3. Maneuverability (what can and cannot be changed)?

2. Resources

available (time, people, money)?

1. Initial objective

(brand analysis, new brand, rebranding, advertising)?

Project Scope Objectives {1 of 3}Project Scope

Step 1

9. Perform post-

mortem on Project Scope Stage

8. Set up critical chain timeline and

assign resources

7. Choose the brand analysis tools;

provide rationale

6. Finalize project scope with buy-in,

create statement of objectives

See Fair Process (Blue Ocean Strategy)5. Possible to have fair process to build

execution into strategy?


Step 2

12. Assess and evaluate plan as each method provides input

11. Provide input into methods use for

ongoing improvement

10. Execute analysis

methods as per project plan


Step 3

Visual Awakening (1 of 4)

• Draw strategy canvas for industry or competitors

and self

• Determine which elements of the offering are of

value and rank-order them

– Can ask customers about these as well as industry insiders

• Analyze by viewing through

– Four Actions framework

– Value Curve goals

– Value Curve litmus test

Strategy Map

• Excel template

Visual Exploration (2 of 4)

• Go into the field to explore the 6 paths– Industry– Strategic group

– Buyer group

– Scope of product or service offering– Functional-emotional orientation

– Time

• Observe the distinctive advatages of alternative products and services

• See which factors you should elminate, create, or change (the four actions framework)

Visual Exploration (2 of 4)

Rethink functional-

emotional orientation

of industry

Functional-emotional

Participates in

shaping external

trends over time

Time

Look across

alternative industries,

break out of own

Industry

Looks across

complementary

offerings

Redefines industry

buyer group, who is

the buyer

Look across strategic

groups within industry,

break out of groups

Offering

scope

Buyer group

Strategic group

Four Actions Framework

•

•

•

•

RaiseWhich factors should be

raised well above the

industry’s standard?

•

•

•

•

CreateWhich factors should be

created that the industry

has never offered?

•

•

•

•

EliminateWhich factors the

industry takes for granted

should be eliminated?

•

•

•

•

ReduceWhich factors should be

reduced well below

industry’s standard?

Value Curve Goals

•

•

•

•

Label factors in customers termsInsider jargon does not work, but instead

need outside-in perspective, driven by actual

demand (and in customers’ terms)

•

•

•

•

Eliminate strategic contradictionsSometimes a high factor requires another

high factor to make good on promise. Does

each factor have the support it needs?

•

•

•

•

Need coherences to the strategyValue curve needs to collectively make sense

and not simply have a lot of disparate highs

and lows. Functional silos must be bridged.

•

•

•

•

No overdelivery without paybackHigh levels across all factors should result in

high profits, otherwise offering too much.

Which factors to eliminate and reduce?

Initial Litmus Test for Value Curve

• Focus

– Focus drives cost factors down

– Lack of focus indicates complex business plan

• Divergence

– Value curve diverges from industry standards

– Strategy must deviate from me-too-ism

– Need to stand apart in the marketplace

• Compelling tag line

– Without, it is a sign of innovation for own sake

Visual Strategy Fair (3 of 4)

• Draw your “to be” strategy canvas based on insights from field observations

• Get feedback on alternative strategy canvases from customers, competitors’customers, and noncustomers

• Use feedback to build the best “to be”future strategy

Visual Strategy Fair Feedback

• Feedback form

Visual Communication (4 of 4)

• Distribute before-and-after strategic profiles on one page for easy comparison

• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy

Project Evaluation Support Form

• Form including projects, evaluation of those projects in terms of moving the strategy forward (closing gap between current and future value curve)

• Go or no go on projects based on evaluation

• (Note: not needed for our class project)

Blue Ocean Strategy Sequence

Buyer Utility

Is there

exceptional

buyer utility in

your business?

Price

Is your price

easily accessible

to the mass of

buyers?

Cost

Can you attain

your cost target

to profit at your

strategic price?

Adoption

What are the

adoption

hurdles?

Buyer Experience Grid

• Create form based on previous slide

Location of biggest blocks to

customer utility

• Create form based on previous slide

Buyer Utility - Purchasing

How environmentally friendly is this stage? Make it more green.

How fun and what level of positive image at this stage? More fun now!

How much risk is there involved in this stage? Can risk be reduced?

How convenient is this stage? Can it be made moreso?

How simple is this stage? Can it be made simpler?

How productive is the customer in this stage? How moreso can it be?

Environmental Friendliness

Fun & Image

Risk

Convenience

Simplicity

Customer Productivity

purchase delivery use supplements maintenance disposal

Buyer Utility - Delivery








Fun & Image

Risk

Convenience

Simplicity



Buyer Utility - Use








Fun & Image

Risk

Convenience

Simplicity



Buyer Utility - Supplements








Fun & Image

Risk

Convenience

Simplicity



Buyer Utility - Maintenance








Fun & Image

Risk

Convenience

Simplicity



Buyer Utility - Disposal








Fun & Image

Risk

Convenience

Simplicity



Price Corridor of the Mass

• First form

– Product/service types

– Plot across actual dollar amounts

– Using bar graphs or other types

• Second form

– Levels of protection

– Simple table

Profit Model

• Excel spreadsheet

– Strategic price

– Minus target profit

– Equals target cost

– Partnering

– Plus pricing innovation

– Equals target cost

Overcome Organizational Hurdles

Cognitive Hurdle

An organization

wedded to the

status quo

Resource Hurdle

Limited

resources

Motivational Hurdle

Unmotivated

staff

Political Hurdle

Opposition from

powerful vested

interests

• Ride the “electric sewer”

• Meet with disgruntled customers

• Free up resources from cold spots

• Multiply value of resources

• Move resources to hot spots

• Horse trade for resources

• Place kingpins in a fishbowl

• Make fair process pervasive

• Atomization of the larger goal

• Secure consigliere

• Activate angels

• Isolate devils

Organizational Hurdles Forms

• Create forms

– Cognitive hurdles

– Resource hurdles

– Motivational hurdles

– Poltical hurdles

“After a strategy is set, managers state clearly the new rules

of the game…. Employees should know up front what

standards they will be judged by and the penalties for failure.

What are the goals of the new strategy? What are the new

targets and milestones? Who is responsible for what? To

achieve fair process, it matters less what the new goals,

expectations, and responsibilities are and more that they are

clearly understood.” (p.176)

Expectation of clarity

“Everyone involved and affected should understand why final

strategic decisions are made as they are. An explanation of

the thinking that underlies decisions makes people

confident…. And serves as a powerful feedback.” (p.175-6)

Explanation

“Involve individuals in the strategic decisions that affect them

by asking for their input and allowing them to refute the

merits of one another’s ideas and assumptions.” (p.175)

Engagement

Fair process of engagement, explanation, and expectation of

clarity engenders trust and commitment, producing voluntary

cooperation, and enabling superior execution.

Overview

Fair Process Method (Description)(Blue Ocean Strategy) {1 of 2}

Method

Fair Process

What are the goals of the

new strategy? What are

the new targets and

milestones? Who is

responsible for what?

Are the meetings

structured for clear flow of

information? Are there

mechanisms for additional

wiki/faq/forums?

Can everyone make

meetings? Have meetings

been given enough time?

Has importance been

clearly communicated?

Has an overview of the

process been provided and

that process deemed fair?

4. Set eval criteria, responsibilities,

and achievement targets

3. Create process so that decisions are understood

2. Set up mechanisms and timelines for

individual input

1. Communicate the fair process so that all understand (3E)

Fair Process Method (Form)(Blue Ocean Strategy) {2 of 2}

Method

Fair Process

Fair Process

Engagement

“Involve individuals in the

strategic decisions that

affect them by asking for

their input and allowing

them to refute the merits

of one another’s ideas

and assumptions.”

(p.175)

Explanation

“Everyone involved and

affected should

understand why final

strategic decisions are

made as they are. An

explanation of the

thinking that underlies

decisions makes people

confident…. And serves

as a powerful feedback.”

(p.175-6)

Expectation of clarity

“After a strategy is set,

managers state clearly

the new rules of the

game…. Employees

should know up front

what standards they will

be judged by and the

penalties for failure… To

achieve fair process, it

matters less what the

new goals, expectations,

and responsibilities are

and more that they are

clearly understood.”

(p.176)• What are the goals of the new strategy?

• What are the new targets and milestones?

• Who is responsible for what?

Creating Competitive Advantage

• Sustainable Competitive Advantage (SCA) – Erect barriers to entry – Discourage new entrants, especially imitators

• Blue Oceans may have natural barriers– Competitor brand image may conflict with blue ocean– Blue ocean may not fit conventional industry logic– Blue oceans require cultural, operational, political change

• Barriers created by Blue Ocean Strategy– High degree of loyalty– High volume may lead to rapid cost advantages

• Other sources– Natural monopolies (one player in a specific market)– Legal via patents or contracts

blue ocean strategy (method templates)

Economy & Finance

blue ocean

level fun

strategic

actions framework

fair process

friendliness

industrys

customer customer