Note that while drawing a new value curve, both differentiation and low cost. Whereas value alone merely extends the value of an existing market. What is the blue ocean strategy the term blue ocean was coined by two professors w. In this article, we will look at 1 what is a blue ocean strategy. A value curve is a diagram which can be used to show instantly where value is created within an organizations products and services. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Value innovation is the alliance of innovation with price, utility, and cost positions. How to create uncontested market space and make competition irrelevant at. Blue ocean strategist will create a proposition value, profit, people proposition based on what is termed a value curve blue ocean strategy in a nutshell aims to change the strategic focus of companies from competing with others in the existing market boundaries, to exploring how to create a new space for doing business. Tools and frameworks for creating and capturing blue oceans it is constructed to create a new value curve and when you apply the four actions framework to the strategy canvas of your industry, you get a. Free blue ocean strategy powerpoint templates now that youve done the hard work of identifying your blue ocean strategy, its time to present it to top management.
Blue ocean strategy enables a fundamental transformation in mindset. The premise on which the blue ocean strategy thesis is built, is a simple one. Nov 14, 2008 blue ocean strategy is a value innovation strategic move that opens up new uncontested market, creates new demand, makes the competition irrelevant and helps a company to generate more revenue than competitors that focus narrowly on the existing crowded market. The blue ocean strategy argues that consumers dont have to choose between value and affordability. Value innovation is basically a leap in value that makes current competition irrelevant. Blue ocean strategy proposes that businesses can have more success by creating a blue ocean, rather than trying to compete in the red ocean the traditional market space that is filled with feuding competitors. Companies pursue blue ocean strategies to make competition irrelevant. To break the tradeoff between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industrys strategic logic and. Value innovation is the cornerstone of blue ocean strategy. Hence, their new value curve was totally different from all the restwhich is precisely what is desired in creating a winning strategy for a brighter future. The basic component of our strategy canvas, the value curve, is a tool we. Based on a study of 150 strategic moves spanning more than 100 years across 30 industries, the authors argue that lasting success comes not from battling competitors but from creating blue oceansuntapped new market spaces ripe for growth.
It is thus a powerful tool to create new market spaces blue ocean strategy. Estrategia do oceano azul blue ocean strategy em portugues do brasil by w chan kim, ren. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. It is drawn by plotting the companies offering relative to other alternatives based on key success factors in. Blue ocean strategy and new business models in the food. When expressed through a value curve, an effective blue ocean strategy. Chan kim and renee mauborgne, published by harvard business school press, boston, massachusetts, 2005, isbn 97815996192 blue ocean strategy is a business strategy book, first published on february 3, 2005. Sep 24, 2017 blue ocean strategy requires a different mindset.
It is drawn by plotting the companies offering relative to other alternatives based on key success factors in the industry. Rethinks the functionalemotional orientation of its industry six paths focus on the big picture path 6. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Their iconic and impactful books, blue ocean strategy and blue ocean shift, provide a systematic approach to making the competition irrelevant and. His book blue ocean strategy, coauthored with renee mauborgne, has sold 3. May 24, 2011 if you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. How to create blue oceans using value curves arif harbott.
It will show you what it takes to shift from bloody competition to new markets. Named a best book of 2017 by amazon winner of the best leadership and strategy book of 2017 by 800ceoread kim and mauborgne have followed one blockbuster book with another. The strategy canvas is a central diagnostic tool and an action framework of blue ocean. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. Value innovation strategy competes in an uncontested market space.
It shows how a new blue ocean strategy creates a unique value curve, focusing on values critical to customers at the expense of lessimportant factors. Blue ocean strategy the four actions framework to reconstruct buyer value elements in crafting a new value curve, blue ocean strategy has developed the four actions framework. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean pedagogical materials, used in over 2,800 universities and in almost every country in the world, go beyond the standard casebased method. Our multimedia cases and interactive exercises are designed to help you build a deeper understanding of key blue ocean strategy concepts, developed by worldrenowned professors chan kim and renee mauborgne. Aug 27, 2012 to create a blue ocean strategy, organizations must be committed to value innovation. May 30, 2017 t his month, we read blue ocean strategy by w. With the aid of the four actions framework figure 4 and the eliminatereduceraisecreate grid, a new value curve can be drawn within the strategy canvas that breaks away from the industry value curve thereby creating a blue ocean. The strategy canvas gets you to focus on bigpicture strategic items, rather than getting mired in numbers, spreadsheets, and incremental improvements.
Chan kim and renee mauborgne focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. Furthermore the blue ocean strategy was awarded with. Blue ocean strategy chapter 14 the four action framework chapter two. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Chan kim e renee mauborgne in the book the blue ocean strategy. Below is a summarized strategy canvas for the smartphone example. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. Chan kim and renee mauborgne, professors at insead. A blue ocean strategy doesnt rely on a massive influx of funding or new resources.
Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. A milestone work that overturns the customary pondering system, this top of the line business book diagrams an intense new way of winning whats to come. Study 74 terms mangt 595 exam 2 flashcards quizlet. Blue ocean strategy curves by mariana vieyra on prezi. If a company can identify what consumers currently value and then rethink how to provide that value, differentiation and low cost can both be achieved. Jun 08, 2007 profit model of blue ocean strategy 30. Blue ocean strategy presents a systematic approach to making the competition irrelevant and. Casella wines used the blue ocean strategy to explore and create new uncontested market space. Heres a simple summary of how a traditional red ocean strategy matches up to a blue ocean strategy. Summary capter 1 4 of blue ocean strategy by lauri di vino. Blue oceans are defined by untapped market space, demand creation, and the opportunity for highly profitable growth.
We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new. Blue ocean idea index the blue ocean idea index is a simple but robust test demonstrating how the sequence of utility, price, cost, and adoption form an integral whole to ensure commercial success through blue ocean strategy. How to create uncontested market space and make the competition irrelevant, w. Blue ocean strategy ch 2 analytical tools and frameworks. This study is based on the pros and cons of the blue ocean strategy bos that offers users a framework for creating uncontested market space and diverts the views from the current competition to. Made by group d of the minor global trendwatching 2015. It eventually creates new value demand for consumers and thereby, expands the chances of growth potential. The four actions framework is used to add new values to the strategic canvas value curve.
Blue ocean strategy powerpoint templates present better. It was expanded upon in their bestselling 2005 book, blue ocean strategy. This blog article is a overview of some of the key points of the book by w. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the. The value curve is a graphic depiction of the way a company configures its offering to customers. Value curves have been popularized in kim and mauborgnes best selling book, blue ocean strategy, hbs press, march 2005. Authors our story what we stand for books blue ocean global network. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. Jun 23, 2007 visual awakening 1 of 4 draw strategy canvas for industry or competitors and self determine which elements of the offering are of value and rankorder them can ask customers about these as well as industry insiders analyze by viewing through four actions framework value curve goals value curve litmus test 5. Technology innovation is not necessary for blue ocean strategy. Create a new market space through innovating on the value you give to the customer. Value innovation value innovation is created in the region where a companys actions favorably affect both its cost structure and its value proposition to. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. The value curve shows graphically the way the company or the industry configures its consumer offering.
To create a new value curve, the blue ocean strategy has four key questions that question the strategic logic and business model of the sector. A systematic approach to value innovation can help companies break free. The strategy canvas allows your organization to see in one simple picture all the factors an industry competes on and invests in, what buyers receive, and what the strategic profiles of the major players are. The authors stress that value and innovation must work together simultaneously in order to develop a blue ocean strategy. As competitors value curve converges toward yours, you should begin reaching out for another value innovation to create a new blue ocean when to value innovate again the six principle of blue ocean strategy should serve as essential pointers for every company thinking about its future strategy if it aspires to lead the increasingly overcrowded. Chan kim and renee mauborgne in their bestselling book of the same name. This, the authors refer to as the cornerstone of the blue ocean strategy. Blue ocean strategy is an outofbox kind of breakthrough book that gives its readers a new way of understanding the framework organization that has an assignment to identify and implement different blue ocean strategies in various industries. Learn to create a new value curve using the eliminatereduceraisecreate grid. If you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. The term is coined from the book blue ocean strategy penned by w. How to create uncontested market space and make competition irrelevant has had a huge impact worldwide. The value curve model visualises products comparisons which, in an increasingly competitive environment, helps product managers face the challenge of finding ways to differentiate their products click to tweet value curve case study. Blue ocean strategy pursues differentiation while lowers cost.
According to kim alternative appendix figure approach blue ocean strategy build a blue business model buyer group buyer utility buyer utility map called the visual cdi challenge circuses cirque du soleil companys strategy companys value curve competition irrelevant competitors complementors concentrate consider cost innovations create a blue. Blue ocean shift takes the groundbreaking principles of their original work and offers a smart, systematic plan to help any organization move from competing in existing markets to creating new markets altogether. When these four questions are answered, you will then be able to come up with a new value curve to unlock your companys very own blue ocean. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Look across time blue ocean strategy all industries are affected by external trends over time blue ocean strategies are. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant.
In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. Chan kim and renee mauborgne in the indie business book club. Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing costs. When expressed through a value curve, an effective blue ocean strategy has three complementary qualities. They assert that these strategic moves create a leap in value for the company. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. A third tool, the eliminatereduceraisecreate grid, pushes firms to act on all four questions posed by the four actions framework and to create a new value curve. Sometimes they even create new factors, thereby changing the industrys. One is to launch completely new industries, as ebay did with online auctions. Blue ocean strategy is premised on the idea that companies can create extraordinary value if they follow a strategic framework to develop. Heres an example value curve for just the moto x smartphone. The concept was further expanded in their bestselling book of 2005, blue ocean strategy. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of strategy and international management at insead. Chan kim and renee mauborgne in their book titled blue ocean strategy.
Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. How to create uncontested market space and make the competition irrelevant by w. After having dealt with the blue ocean metaphor as well as having clarified the concept of value innovation, the chapter moves on by describing the basic analytical tools and frameworks that characterize the blue ocean strategy. The first part of the book explains what kim and mauborgne call the cornerstone of blue ocean strategies. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. But its much more common for a blue ocean to be created from within a red.
Note that while drawing a new value curve, both differentiation and low cost have been taking into account. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy formulation the strategy canvas. Written by the business worlds new gurus, blue ocean strategy continues to. A blue ocean strategy differs from a lowcost strategy in that a. According to the authors, nowadays most of the companies red oceans very competitive and bloody markets with thousands of companies killing each other for minimal differentiations, suffocating themselves by trying to offer commodities with increasingly lower prices. Blue ocean strategy is a book published in 2005 and written by w. What is blue ocean strategy about blue ocean strategy. Strategy canvas from blue ocean strategy shortform blog. The value curve model can be used to instantly show where the aspect of value is created within the organizations offerings of products and services. Curves fitness industry case study blue ocean strategy. The seminal book blue ocean strategy has sold over 4 million copies globally and is in print in 46 languages. The cornerstone of blue ocean strategy is value innovation, a concept.
Blue ocean strategy including examples and pdf download. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. It is sometimes present, but more often the innovation was creating something new that buyers value. Value innovation is the backbone of a blue ocean strategy. Value curves a value curve is a graphic depiction of the way a company configures. Value innovation strategy canvas four actions framework six paths. He is the coauthor, along with renee mauborgne, of the book blue ocean strategy. Blue ocean strategy is the most successful book on business. Blue ocean strategy displays an orderly way to deal with making the challenge unessential and traces standards and instruments any organization can use to make and catch their blue seas. It will show you what it takes to shift from bloody competition to new markets and the. The desired result from blue ocean strategic thinking is a completely new value curve, as a result of launching a completely new product or finding new angles of opportunity within the existing market. Pdf impact of blue ocean strategy on organizational. This blog article is part of a series on the book blue ocean strategy by w.