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Blue Ocean Strategy What’s it all about?. - Blue Oceans – definitions and examples - Formulating Blue Ocean strategies - Executing Blue Ocean strategies - key take aways. Blue Oceans – definitions and examples. Examples of “blue Ocean” Cirque du Soleil Apple
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Blue Ocean Strategy What’s it all about?
- Blue Oceans – definitions and examples • - Formulating Blue Ocean strategies • - Executing Blue Ocean strategies • - key take aways
Blue Oceans – definitions and examples • Examples of “blue Ocean” • Cirque du Soleil • Apple • Ryan Air (European Low cost airline) • Value Innovation • “instead of focusing on beating the competition focus on making the competition irrelevant by creating a leap in value for the customer • “must align innovation to utility, price and cost and must time entry accordingly” • Of all business launches in 108 companies studied • 86% line extensions (red ocean) – 62% total revenue and only 39% profit • 14% - “blue ocean” releases – 38% revenue and 61% profit Costs Value Innovation Buyer Value
Formulating Blue Ocean Strategy • Formulation Principles • Reconstruct Market Boundaries • Focus on big picture, not the numbers • Reach beyond existing demand • Get the strategic sequence right • Overcome key org hurdles • Build execution into the strategy • Choosing which “factors” to attack (industry specific – eg airline – price, meals, lounges, seating class choices, hub connectivity, service, speed, frequency point to point flights etc etc) – and using this to create a “strategy canvas” • BA – focus on lounges, meals, seating class, hub connectivity • Ryan air – focus in price, cost, point to point
A “fictional” Strategy Map for Psion Teklogix… Where would you draw the strategy canvas for Psion Teklogix and our competitors?????
Getting the Strategic sequence right Exceptional utility Exceptional utility Revenue Focused No Yes Price No Yes Cost Profit Focused Yes No Adaption Yes Sustain, re – value innovate (protected by barriers to entry) Blue Ocean
Key Take-away’s • Look outside “the box” and beyond the competition to generate “value innovation” • Strategy maps can be used to show the strategic path • Make decisions on “features” to eliminate, start, enhance or reduce • Blue Oceans are usually “self protecting for a number of years” but will turn red over time – so continually look for fresh blue Oceans…..
