Blue Ocean Presentation534534 (2)

7/30/2019 Blue Ocean Presentation534534 (2)

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1. DESIGN SCHOOLTHE PRESCRIPTIVE SCHOOLS. PLANNING SCHOOL

3. POSITIONING SCHOOL4. ENTREPRENEURIAL SCHOOL

THE DESCRIPTIVE SCHOOLS

5. COGNITIVE SCHOOL6. LEARNING SCHOOL7. POWER SCHOOL8. CULTURAL SCHOOL9. ENVIRONMENTAL SCHOOL10. CONFIGURATION SCHOOL THE INTERGRATIVE SCHOOL


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High profit growth at low risk Industries not in existence today Untapped market demand Unknown market space

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The American

Wine Industry
http://images.google.fr/imgres?imgurl=http://www.brushycreekvineyards.com/Wine-Glass-5.jpg&imgrefurl=http://www.brushycreekvineyards.com/legal.htm&h=304&w=300&sz=12&tbnid=yl_qA5hIpFgfTM:&tbnh=112&tbnw=110&hl=fr&start=44&prev=/images?q=glass+wine&start=40&svnum=10&hl=fr&lr=&sa=Nhttp://images.google.fr/imgres?imgurl=http://www.morrys.com/Wine%20glass.JPG&imgrefurl=http://www.morrys.com/New%20wines%20to%20Morry&h=236&w=200&sz=10&tbnid=zQvPARxSf7Zi7M:&tbnh=104&tbnw=88&hl=fr&start=16&prev=/images?q=glass+wine&svnum=10&hl=fr&lr=http://images.google.fr/imgres?imgurl=http://www.visitocva.com/Wine%20glass.jpg&imgrefurl=http://www.visitocva.com/burnley.htm&h=968&w=584&sz=25&tbnid=efuSFM6vJpQA1M:&tbnh=148&tbnw=89&hl=fr&start=2&prev=/images?q=glass+wine&svnum=10&hl=fr&lr=http://images.google.fr/imgres?imgurl=http://www.blairstripsteel.com/map%20north%20america.jpg&imgrefurl=http://arte-sano.blogspot.com/2004_08_01_arte-sano_archive.html&h=423&w=700&sz=84&tbnid=IK_BjX8b51x6ZM:&tbnh=83&tbnw=138&hl=fr&start=3&prev=/images?q=map+america&svnum=10&hl=fr&lr=&sa=G


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Premium Wines Budget Wines

Massive Choice

Polarised

Strategic Groups
http://images.google.co.uk/imgres?imgurl=http://www.satravelco.com/images/wine_label.jpg&imgrefurl=http://www.satravelco.com/winelands_history.php&h=272&w=220&sz=10&tbnid=VjSLa60caLUb9M:&tbnh=108&tbnw=87&hl=en&start=2&prev=/images?q=wine+label&svnum=10&hl=en&lr=&sa=Ghttp://images.google.co.uk/imgres?imgurl=http://images.tvnz.co.nz/tvnz_images/news2005/art_culture/wine_211205_232.jpg&imgrefurl=http://tvnz.co.nz/view/page/425823/642348&h=129&w=232&sz=7&tbnid=qCLNI9rjft7CPM:&tbnh=57&tbnw=103&hl=en&start=23&prev=/images?q=wine+screwtop&start=20&svnum=10&hl=en&lr=&sa=N


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3rd largest in world: worth $20 billion Californian makes 66% - the rest is from Italy,France, Spain, Chile, Argentina, Australia Exploding number of new wines newvineyards in Oregon, Washington, New York Customer base stagnant 31st in the world in per capita consumption!

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Top 8 producers had 75% of the market;1600 had the remaining 25% $ millions spent in marketing - Titanic battles

intense competition Severe price pressure The dominant growth strategy was towardspremium wines more complexity, betterimage, more prestigious vineyards, number ofmedals won at wine festivals.

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Premium WinesVery high

OfferingLevelversusWine

DrinkersExpectations

High

Normal

Low

Very low

Non-existent


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Premium and Budget WinesVery high

OfferingLevelversusWine

DrinkersExpectations High

Normal

Low

Very low

Non-

existent


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It is too confusing and complex Wine descriptions and terminology The shopping experience The lack of clear guidance on what to buy anddrink

Thus, massively intimidating fornoncustomers (the large majority of the USpopulation who were not wine drinkers)9


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Premium BudgetCreating

a Blue Ocean
http://images.google.co.uk/imgres?imgurl=http://www.jules.org.uk/images/hats/97305.jpg&imgrefurl=http://www.jules.org.uk/hats2.htm&h=504&w=383&sz=12&tbnid=7nK9OZwhRsiKoM:&tbnh=128&tbnw=97&hl=en&start=18&prev=/images?q=Australian+hat&svnum=10&hl=en&lr=&sa=Ghttp://images.google.co.uk/imgres?imgurl=http://winecountry.it/assets/articles/australia/yellowtail.jpg&imgrefurl=http://winecountry.it/articles/wine-history-and-culture/473&h=450&w=350&sz=42&tbnid=-maMBUFGK54fuM:&tbnh=124&tbnw=96&hl=en&start=3&prev=/images?q=Yellowtail+wine+&svnum=10&hl=en&lr=&sa=Ghttp://images.google.co.uk/imgres?imgurl=http://www.sapporobeer.jp/wine/yellowtail/monitor/image/mon_e_ph01.jpg&imgrefurl=http://www.sapporobeer.jp/wine/yellowtail/monitor/&h=238&w=180&sz=14&tbnid=txQYfDOwzQ1S1M:&tbnh=104&tbnw=78&hl=en&start=2&prev=/images?q=Yellowtail+wine+&svnum=10&hl=en&lr=&sa=Ghttp://images.google.co.uk/imgres?imgurl=http://www.satravelco.com/images/wine_label.jpg&imgrefurl=http://www.satravelco.com/winelands_history.php&h=272&w=220&sz=10&tbnid=VjSLa60caLUb9M:&tbnh=108&tbnw=87&hl=en&start=2&prev=/images?q=wine+label&svnum=10&hl=en&lr=&sa=Ghttp://images.google.co.uk/imgres?imgurl=http://images.tvnz.co.nz/tvnz_images/news2005/art_culture/wine_211205_232.jpg&imgrefurl=http://tvnz.co.nz/view/page/425823/642348&h=129&w=232&sz=7&tbnid=qCLNI9rjft7CPM:&tbnh=57&tbnw=103&hl=en&start=23&prev=/images?q=wine+screwtop&start=20&svnum=10&hl=en&lr=&sa=N


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Only 2 types initially Chardonnay and Shiraz Fruity, soft on palette, sweet-ish great for those who hadnot drunk wine before Same bottle for red and white low logistics costs Simple vibrant packaging lower case letters/kangaroo Un-intimidating They were selling The essence of a great land Australia ie they were not selling the wine Australian clothing for the retail staff they enthusiasticallypromoted a wine they could understand.

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Eliminated: Oenological terminology and distinctions,Aging qualities, Above the line marketing Reduced: Wine complexity, Wine range, Vineyardprestige Raised: Price versus Budget Wines, Simplicity ofretail store environment, Enthusiasm of Sales People Created: Easy drinking, Ease of selection, Sense offun and adventure

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Yellow Tail Value Curve

Very high

High

Normal

Low

Very low

Non-

existent

The Essence of a Great Land

Three Tests of a

Blue Ocean Strategy:

1) Focussed

2) Divergent

3) Compelling Tagline


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No. 1 imported wine (outsells France and Italy) Fastest growing imported wine in the history of theUSA industry

New consumers of wine Jug drinkers trade up Premium wine drinkers trade down

Industry criticizes them mercilessly at first Now wine press blurb gives it a best buy for value;winning wine awards.

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Conventional Logic Blue Ocean LogicIndustry Assumption Industry conditions are

given Industry condition canbe shaped.Strategic Focus Build competitiveadvantages to beat the

competition.Create a quantum leapin buyer value to

dominate the market.

Customers

Retain and expand thecustomer basethrough furthersegmentation andcustomization.Think in terms ofembracing customerdifferences.

Go for the mass ofbuyers and willinglylet some existingcustomers go. Thinkin terms of embracingkey customer valuecommonalities.

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Conventional Logic Blue Ocean Logic

Assets &Capabilities

Think in terms of acompanys existingassets andcapabilities.

Build on what it has.

Think free from acompanys existingassets andcapabilities.

Ask, what if we startanew?

Product/Serviceofferings

Think in terms ofproducts/servicesoffered by theindustry. Seek tomaximize the value ofthese offerings.

Think in terms ofbuyers solution evenif that transcends theindustry. Seek tosolve buyers majorbottlenecks/chiefcompromises in usingthe products/servicesof the industry.


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Key Blue Ocean Creations

Was the Blue

ocean created

by a new entrant

or an incumbent

Was it driven by technology

pioneering or value

pioneering

At the time of theblue ocean

creation was the

industry attractive

or unattractive

Ford Model T

Unveiled in 1908, the model T was the first

mass-produced car, priced so that many

Americans could afford it

New EntrantValue pioneering *

(Mostly existing technologies)Unattractive

GMs Car for every purse & purpose

GM created a blue ocean in 1924 by

injecting fun & fashion into the car

Incumbent

Value pioneering

(Some new technologies) Attractive

Japanese fuel-efficient autos

Japanese auto makers created a blue

ocean in the mid 1970s with small, reliable

lines of cars

Incumbent

Value pioneering

(Some new technologies)Unattractive

Chrysler Minivan

With its 1984 minivan, Chrysler create a

new class of automobile that was easy to

use as a car but had the passenger space

of a van.

Incumbent

Value pioneering


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Au

tomobiles


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Was the Blue

ocean created

by a new

entrant or an

incumbent

Was it driven by

technology pioneering

or value pioneering

At the time of the

blue ocean

creation was the

industry attractive

or unattractive

CTRs tabulating machine

In 1914, CTR created the business machine industry by

simplifying, modularizing and leasing tabulating

machines. CTR later changed its name to IBM

Incumbent

Value pioneering

(Some new

technologies)Unattractive

IBM 650 electronic computer & System/360

In 1952, IBM created the business computer industry by

simplifying & reducing the power and price of existingtechnology. And it exploded into the blue ocean created

by the 650 when in 1964 in unveiled the system/360, the

first modularized computer system.

Incumbent

Value pioneering

(650:Mostly existing

technologies)

Value and technology

pioneering

(System/360: New &

Existing technologies)

Non-Existent

Apple personal computer

Although it was not the first home computer, the all-in-

one, simple-to-use Apple II was a blue ocean creation

when it appeared in 1978

New-Entrant

Value pioneering

(Mostly existing

technologies)Unattractive

Compaq PC Servers

Compaq created a blue ocean in 1992 with its ProSignia

server, which gave buyer twice the file & print capability

of the mini computer at 1/3 the price

Incumbent

Value pioneering

(Mostly existing

technologies)

Non-Existent

Dell Built-to-Order Computers

In the mid-1990s , Dell created a blue ocean in a highly

competitive industry by creating a new purchase and

delivery experience for buyers

New-Entrant

Value pioneering

(Mostly existing

technologies)

Unattractive

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C

OMPUTERS


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Was the Blue

ocean created

by a new entrantor an incumbent

Was it driven by technology

pioneering or valuepioneering

At the time of the

blue ocean

creation was theindustry attractive

or unattractive

Nickelodeon

The first Nickelodeon opened its doors in

1905, showing short films aroundthe-

clock to working-class audiences for 5

cents

New EntrantValue pioneering

(Mostly existing technologies)Non-Existent

Palace TheatresCreated by Roxy Rothapfel in 1914, these

theatres provided an operalike environment

for cinema viewing at an affordable price

Incumbent

Value pioneering

(Mostly existing technologies) Attractive

AMC multiplex

In the 1960s, the number of multiplexes in

Americas suburban shopping malls

mushroomed. The multiplex gave viewers

greater choice while reducing ownerscosts.

Incumbent

Value pioneering


AMC Megaplex

Megaplexes, introduced in 1995, offered

every current blockbuster and provided

spectacular viewing experiences in theatre

complexes as big as stadiums, at a lower

cost to theatre owners.

Incumbent

Value pioneering


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Movie

The

atres


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Red Ocean Strategy Blue Ocean StrategyCompete in existing market space Create uncontested market space

Beat the competition Make the competition irrelevant

Exploit existing demand Create and capture new demand

Make value/cost trade-off Break value/cost trade-off

Align the whole system of acompanys activities with itsstrategic choice of differentiationor low cost

Align the whole system of acompanys activities in pursuit ofdifferentiation and low cost

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What factors

should be

eliminated that the

industry has taken

for granted?

El iminate

What factors

should be reduced

wellbelow the

industry standard?

Reduce

What factors should

be created that the

industry has never

offered?

Create

What factorsshould be raised

wellbeyond the

industry standard?

Raise


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Blue Ocean Presentation534534 (2)