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Group 4 Raul Guerrero Jose Medina Laura Randall Melissa Dunlop Mona Shafer Alma Pena

Chapter 3. RECONSTRUCT MARKET BOUNDARIES. Six Paths Framework. Group 4 Raul Guerrero Jose Medina Laura Randall Melissa Dunlop Mona Shafer Alma Pena. Breaking Away From Competition. Look systematically across boundaries. Six Paths Framework. Across Alternative Industries

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Group 4 Raul Guerrero Jose Medina Laura Randall Melissa Dunlop Mona Shafer Alma Pena

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  1. Chapter 3 RECONSTRUCT MARKET BOUNDARIES Six Paths Framework Group 4 Raul Guerrero Jose Medina Laura Randall Melissa Dunlop Mona Shafer Alma Pena

  2. Breaking Away From Competition Look systematically across boundaries

  3. Six Paths Framework • Across Alternative Industries • Across Strategic Groups • Across Buyer Groups • Across Complimentary Products and Service Offerings • Across the Functional-Emotional Orientation of an Industry • Across Time

  4. Path 1: Look Across Alternative Industries • Substitutes • Different Form • Same Function • Alternatives • Different Form • Different Function • Same Purpose

  5. Creating Blue Oceans • NetJets • Fractional Jet Ownership • NTT DoCoMo’s i-mode • Wireless Transmission of Voice, Text, Data, and Pictures

  6. Path 2:Looking Across Strategic Groups • Companies within a given industry that use similar strategy • Compete on price and performance • Trade up or down from one group to another

  7. Creating Blue Oceans Curves • Combining the industries of traditional health clubs and home exercise programs Lexus • Combine luxury of higher end cars with lower priced vehicles

  8. Path 3: Look Across the Chain of Buyers • Many Industries can create a blue ocean by asking; • What is the chain of buyers in this industry? • Which buyer group does this industry typically focus on? • If the buyer group is shifted how could new value be unlocked?

  9. Target Buyers Vs. Chain of Buyers • Companies tend to focus on the target buyer • In reality there is a chain of “buyers” • Purchaser may be different then actual user • The direct buyer and the indirect buyer may have very different values • Challenging which buyer group to target can create a new blue ocean

  10. Path 3: Look Across the Chain of Buyers • Many Industries can create a blue ocean by asking • What is the chain of buyers in this industry? • Which buyer group does this industry typically focus on? • If the buyer group is shifted how could new value be unlocked?

  11. Path 4: Look Across Complementary Product and Service offer Before, During and After the Storm

  12. Total Solution • What buyers seek when they choose a product or service? • What happens before, during, and after your product is used? IKEA

  13. NABI • Pain points in transit bus industry • Designs outdated • Late delivery times • Low quality • Penny pinching pricing approach in industry. • Created a value curve that radically differed from the industry's average curve. (Low Life-Cycle Costs) • Named one of the 30 most successful companies in the world by Economist Intelligence Unit in 2002 • Has Captured 20% of the US Market since 1993

  14. Phillips Electronics • In teakettle’s, the major pain point in customers’ total solution was the lime scale found in tap water • Opportunity in the complementary product of water: • Created a kettle having a mouth filter that effectively captured the lime scale as water poured

  15. Creating Blue Oceans • Barnes & Noble • Virgin Entertainment’s megastores • Zeneca’s Salick cancer centers

  16. Path 5: Look Across Functional or Emotional Appeal to Buyers • Industry converge over scope of its products and services • Also on one of two possible bases of appeal • Functional appeal • Emotional appeal

  17. Functional Appeal • Industry competes on price and function largely on calculations of utility • Appeal is rational

  18. Emotional Appeal • Industry competes largely on feelings • Appeal is emotional • Offer many extras that add price without increasing functionality

  19. Path 5: Look Across Functional or Emotional Appeal to Buyers • Companies’ behavior affects buyers’ expectations in a reinforcing cycle • Functionally oriented become more functionally oriented • Emotionally oriented become more emotionally oriented

  20. Path 5: Look Across Functional or Emotional Appeal to Buyers • Challenge the functional-emotional orientation of the industry • Find new market space

  21. Path 6: Look Across TimeAssessing Trends Across Time • Three Principles • Decisive • Irreversible • Have a clear trajectory

  22. Identifying a Trend • When a trend is identified, working from the inside out and taking it to its logical conclusion could take a firm into a blue ocean.

  23. Three Takeaways The first principle of blue ocean strategy is to reconstruct market boundaries by looking systematically across different boundaries to break from the competition and create blue oceans. By looking at different angles, such as buyers, products, and services a company can expand its values and break into a blue ocean. Through the perception of time, companies can evaluate the emotional and functional appeal from the buyer’s perspective and create ways to diversify your market space.

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