Chapter 1

2. Chapter 1 VS. Red Ocean • Highly competitive markets, where market space is crowded • Chances for profit and growth are reduced. Blue Ocean • Markets with many opportunities for highly profitable growth. • Created from within red oceans by extending industry boundaries.

3. Break Away • Define the basic unit of analysis • Understand the roots of high performance • Lasting excellence • Become a visionary • Ex. Hewlett-Packard (HP)

4. Value Makes Winners • Approach to strategy • Benchmark the Best • Value Innovation • Focus on making the competition irrelevant by creating a leap in value for buyers and your company • Ex. Cirque du Soleil – “We Reinvent the Circus”

5. Red Ocean Strategy • Compete in existing market space • Beat the competition • Exploit existing demand • Make the value-cost trade-off • Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. • Blue Ocean Strategy • Create uncontested market space • Make the competition irrelevant • Create and capture new demand • Break the value-cost trade-off • Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

6. Chapter 2 - Analytical Tools And Frameworks • Strategy Canvas - Captures the current state of play in the known marketplace and helps create a different strategic profile • The Value Curve - Company’s relative performance across its industry’s factors of competition Fig. 2.1 • Ex. Yellow Tail Wine

8. Four Actions Framework • Eliminate - Which of the factors that the industry takes for granted should be eliminated? • Reduce - Which factors should be reduced well below the industry standard? • Raise - Which factors should be raised well above the industry’s standard? • Create - Which factors should be created that the industry has never offered?

9. Three Characteristics of a Good Strategy • Focus – Set your own agenda, Excel in a few key aspects, Don’t invest across the board • Divergence – Act Don’t react, Stand Apart • Compelling Tagline – Have a true and clear cut tagline

10. Chapter 3 – Six Paths Framework • Path 1: Look Across Alternative Industries • Path 2: Look Across Strategic Groups Within Industries • Path 3: Look Across the Chain of Buyers • Path 4: Look Across Complementary Product and Service Offerings • Path 5: Looking Across Functional or Emotional Appeals to Buyers • Path 6: Look Across Time

11. Chapter 4: Focus on the Bigger Picture, Not the Numbers

12. Focusing on the Big Picture • The bigger picture starts with visualizing strategy and drawing a strategy canvas

13. Pioneers, Migrators, Settlers • Pioneer – Business that offers unprecedented value . These are your blue ocean strategists and they are the most powerful sources of profitable growth. Mass following of customers • Migrators – Those who lie in between of the red and blue ocean markets. Higher value offered, but not innovative • Settlers – Business whose value curves conform to the basic shape of the industries. Satisficing with being a competitor in a red ocean.

14. Chapter 5: Reach Beyond Existing Demand

15. Noncustomers = Possible Future Customers • Blue ocean firms please and retain existing customers, and find ways to reach new segments. • Callaway golf – People who didn’t play golf saw ball as too hard to hit with small club. Essentially, Callaway made a giant club head for those previously shitty at golf to be able to hit the ball, although they are probably still shitty, Callaway blue ocean marketing has opened the gates to a new segment of customers.

16. Three Tiers of Noncustomers

17. Chapter 6: Get the Strategic Sequence Right • Buyer Utility – is there a compelling reason for the mass of people to buy it. • Price – Is your price easily accessible to the bass of buyers? • Cost – Can you attain your cost target to profit at your strategic price? • Adoption – What are the adoption hurdles in actualizing your business idea, and are you addressing them up front? • If the answer is YES to all of these BAM, you have a commercially viable blue ocean idea

18. BOI Index for Sucess Chapter 6 is summarized by this graph. If your company can ask all of these questions and have an emphatic YES answer, then a blue ocean opportunity awaits.

19. Chapter 7 Overcome Key Organizational Hurdles “In Life, Business, or Rock & Roll, failure is not an option.” ~Group 4

20. Four Hurdles to Strategy Organizational Execution

21. Breaking through the cognitive Hurdle • Two Ways of doing this • Ride the electric sewer • Meet with disgruntled customers

22. Jumping the resource hurdle • Does your company have the money to spend on necessary changes? • Tipping point leaders concentrate on multiplying the value of the resources they already have by observing: • Hot spots • Cold spots • Horse Trading

23. Jump the motivational hurdle • How can you motivate the mass of employees fast and at low cost? • Traditionally – leader’s issue grand strategic visions and turn to massive top-down initiatives. • Costly and time consuming • Tipping point leaders follow a reverse course and seek massive concentration. • Kingpins • Fishbowl Management

24. Knocking Political Hurdles Down • There are always powerful vested interests that will resist the impending strategy changes both internal and external • To overcome the political forces, tipping point leaders focus on three influence factors • Leveraging angles • Silencing devils • Secure a consigliere on top management

25. Chapter 8 Build execution into strategy

26. A Company is Everybody • From top executives to line employees. • When all employees support and are aligned around a strategy, that is when a company can stand apart as greatconsistent executor. • Trust and commitment must create an environment that motivate people to execute the strategy. • Build execution into strategy from the start. • Especially in blue ocean because trepidations builds as people are less involved. Fair process is key….

27. The Three E Principles of Fair Process • Engagement: Involving individuals in the strategic decisions by asking them for their input. • Explanation: • Everyone involved and affected should understand why final strategic decisions are made as they are. • Expectation Clarity: • After a strategy is set, managers state clearly the new rules of the game.

28. Intellectual and Emotional Recognition Theory • When individuals feel recognized for their intellectual worth, they are willing to share their knowledge. • Violation of fair process – violation of individuals intellectual and emotional worth. • This can lead to sabotage – “You don’t value my ideas. So I don’t value your ideas, nor do I trust in or care about the strategic decisions you’ve reached.

29. Chap 9 • Creating Blue Oceans is not a static achievement but a dynamic process.

30. Barriers to Imitation • Value innovation does not make sense based on conventional strategic logic. • Brand image conflicts • Natural Monopoly with size of market • Patents • Value innovation leads to cost advantages

31. Swimming to the Blue Ocean • You should swim as far as possible in the blue ocean making yourself a moving target. • As competitors’ Value curves converge towards yours you should begin reaching out for another value innovation to create a new blue ocean. • Coexisting markets make it necessary to know how to compete in both markets