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Ch. 3 Reconstruct Market Boundaries

Ch. 3 Reconstruct Market Boundaries. Blue Ocean Strategy Sara, Cher, Sarah, Daisy, & Sean. 1 st Principle of Blue Ocean Strategy. Break from the competition Create blue oceans Questions Are there systematic patterns for reconstructing market boundaries to create blue oceans?

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Ch. 3 Reconstruct Market Boundaries

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  1. Ch. 3 Reconstruct Market Boundaries Blue Ocean Strategy Sara, Cher, Sarah, Daisy, & Sean

  2. 1st Principle of Blue Ocean Strategy • Break from the competition • Create blue oceans • Questions • Are there systematic patterns for reconstructing market boundaries to create blue oceans? • If so, can they be applied across all industry sectors? • Yes, there are six basic approaches to remaking market boundaries. • Six Paths Framework

  3. Six Assumptions • Define industry and focus on being the best in it. • Look at the industry through generally accepted strategic groups and strive to stand out in the group they play in. • Focus on same buyer group. (Be it the purchaser, user, or influencer.) • Define scope of products and services offered by their industry. • Accept industry’s functional or emotional orientation • Focus on same point in time (current competitive threats) in creating strategy.

  4. Six Paths Framework • Path 1: Look Across Alternative Industries • Compete with industry and alternative products and services • Alternatives • Substitutes • Sellers abandon intuitive thinking. • Creation of blue oceans • NetJets • NTT DoCoMo’s i-mode

  5. Six Paths Framework • Path 2: Look Across Strategic Groups Within Industry • Strategic groups- group of companies within an industry that pursue similar strategies. • Two dimensions: • Break from narrow tunnel vision by determining factors that influence customers’ decisions • Ex: Curves for Women • Why do customer’s trade up or down?

  6. Six Paths Framework • Path 3: Look Across the Chain of Buyers • Chain of buyers who are involved in directly or indirectly in the buying process. • Discovery of a new blue ocean • Novo Nordisk • Focus from doctors to users- NovoPen • Bloomberg • Purchasers to users • What are the chain of buyers in your industry? • By shifting the buyer group, what new value will you add?

  7. Six Paths Framework • Path 4: Look Across Complementary Product and Service Offerings • Value in complementary products and services • Define solution buyers seek in choosing products and services. • Before, during, and after product is used • NABI- bus transit • How do you eliminate pain points in products and offerings?

  8. Six Paths Framework • Path 5: Look Across Functional or Emotional Appeal to Buyers • Two basis of Appeals • Functional (rational) • Emotional • Customers’ expectations • Challenge functional-emotional orientation and discover a new market space. • Ex. QB House- eliminating time • What elements of emotional appeal can you add to a functional orientation and vice versa?

  9. Six Paths Framework • Path 6: Look Across Time • External Trends • The value a market delivers today and the value it might deliver tomorrow. • Finding insights in trends • Decisive to business • Must be irreversible • Must have clear trajectory • Ex. Apple- illegal music

  10. Take Aways

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