Blue Ocean Strategy + Story + Video + Case Study

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  1. 1. Presented by: Nikhil Mhatre Roshan Tupe Jyothi Dharmarajan Khusbhu Nakar Sweety Singh Making the Competition Irrelevant
  2. 2. Content s History Explanation of BOS with self made story Introduction and Definition Types of Strategy Comparison between RED and BLUE Blue Ocean Strategy & Strategic Positioning Six Principles of Blue Ocean Strategy Strategy Canvas and Four Action Framework Case Study 1 Case Study 2
  3. 3. Based on Blue Ocean Strategy, a book published in 2005 and written by W. Chan Kim and Rene Mauborgne, Professors at INSEAD and Co-Directors of the INSEAD Blue Ocean Strategy Institute W. Chan Kim
  4. 4. Explanation of Blue Ocean Strategy with self made Story
  5. 5. Two months later.
  6. 6. BOS defined The avoidance of costly competition through innovation with the aim to create a market where no firms currently operate, leaving the company to expand without competition. Blue oceans denote all industries NOT in existence today The Unknown market space Untainted by competition In Blue Oceans, demand is created not fought over In Blue Oceans, growth is profitable and rapid
  7. 7. Always choose RIGHT side for business
  8. 8. Types of StrategyIn the red ocean, differentiation costs because firms compete with the same best-practice principle. Here, the strategic choices for firms are to pursue either differentiation or low cost. In the reconstructionist world, however, the strategic aim is to create new best-practice rules by breaking the existing value-cost trade-off and thereby creating blue ocean.
  9. 9. Comparison between RED OCEAN and BLUE OCEAN
  10. 10. Blue Ocean Strategy & Strategic Positioning
  11. 11. Cost Reduction Value Increase Increase of value implies increase of cost Reduction of cost implies decrease in value
  12. 12. Cost Reduction Value Increase Both cost reduction and value increase are possible
  13. 13. Value Innovation Value innovation is created in the region where a companys actions favorably affect both its cost structure and its value proposition to buyers. Cost savings are made by eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates. Costs Buyer Value Value Innovation Eliminate Reduce Raise Create Value Innovation
  14. 14. Reconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence right Formulation Principles Overcome key organisational hurdles Build execution into strategyExecution Principles
  15. 15. 1. Reconstruct Market Boundaries
  16. 16. Which factors should be created that the industry never offered? Which factors should be raised well above the industry standard? Which factors should be reduced well below the industry standard? Which of the factors that the industry takes for granted should be eliminated? Eliminate Reduce CreateRaise 2. Focus on the Big Picture, Not the Numbers
  17. 17. A New Value Curve Reduce Create Raise Eliminate
  18. 18. 3. Reach Beyond Existing Demand
  19. 19. 4. Get the Strategic Sequence Right
  20. 20. 5. Overcome Key Organisational Hurdles
  21. 21. Explanation Expectation Clarity Engagement 6. Build Execution into Strategy
  22. 22. www.derekhendrikz.c Working with other BOS Tools
  23. 23. Shows the strategic profile of an industry by depicting very clearly the factors that affect competition among industry players, as well as those that might in the future. Shows the strategic profile of current and potential competitors, identifying which factors they invest in strategically. Draws the companys strategic profile, or value curve, showing how it invests in the factors of competition and how it might invest in them in the future. The horizontal axis lists factors of competition for the industry. The vertical axis indicates the degree to which industry players and the providers of alternative services invest in the competitive factors. The Strategy Canvas:
  24. 24. Strategy Canvas for Cirque du Soleil
  25. 25. The PMS Grid:
  26. 26. PMS Grid Sample
  27. 27. www.derekhendrikz.c The Buyer Experience Cycle / Buyer Utility Map (BEC / BUM) Framework
  28. 28. www.derekhendrikz.c
  29. 29. Tipping Point Leadership
  30. 30. Blue Ocean Strategy Case Example 1 CLASSICAL ORCHESTRA INDUSTRY
  31. 31. The Classical Orchestra Industry
  32. 32. Intensifying competition Shrinking Audiences 1993 2003 1993 2003 27000 37000 1137 749 No. of Concerts Avg. No. of Audience per concert
  33. 33. Revenue breakdown of a typical orchestra Source % of total revenue Live Performance