Blue Ocean Strategy.. part2

Blue Ocean Strategy Summarizing Chapters 4-6

Focussing on the big picture instead of numbers and drawing the strategy canvas. A robust strategic planning process is required to distinguish a blue ocean from red oceans.

Four Steps of Visualizing Strategy

  • Visual Awakening – comparison with competitors
  • Visual Exploration – six paths to create blue ocean
  • Visual Strategy Fair – feedback to build future strategy
  • Visual Communication – close gap towards new strategy

The company should support operational moves that allow company to close the gap and actualize the new strategy

An exercise valuable for entrepreneurs who want to see future performance, testing the growth potential of businesses plot the company’s current and planned portfolios on pioneer-migrator-settler (PMS) map.

PMS map

  • settlers – me-too businesses
  • migrators – business offerings better than marketplace
  • pioneers – mass following of customers

To reach beyond existing demand, maximize the size of blue ocean. Need to look into noncustomers and focus on building powerful overlapping commonalities in what buyers value.

The three tier of non customers

  • Frist tier ‘soon to be’ non-customers – on the edge of the market.
  • Second tier ‘refusing’ non-customers – choose against your market.
  • Third tier ‘unexplored’ non-customers – in markets distant from yours

Sequence of blue strategy

  • Buyer utility – exceptional in this business idea?
    • Six stages of buyer experience cycle – Purchase, Delivery, Use, Supplements, Maintenance, Disposal
  • Price – easily accesbile to masses?
    • Identify price corridor of the mass and specify price level within the corridor
  • Cost – attain cost target to profit at strategic price?
    • Streamlining and cost innovation & Partnering – Price innovation
  • Adoption – adoption hurdles in actualizing idea?
    • Employees, business partners, general public

And finally the commercially viable blue ocean idea

To ensure commercial success blue ocean strategy must be built in the sequence of

  • utility
  • price
  • cost
  • adoption

The blue ocean idea (BOI) index provides a test of this system and helps blue ocean companies to move further ahead from the formulation side of the strategy to its execution.


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