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Clay Dibrell, Ph.D.
Associate Professor of Strategic Management,
Oregon State University
Blue Ocean Strategy
Blue Ocean Strategy
Blue ocean– Uncontested market space.
Red ocean– Contested market space.
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
Red Ocean vs. Blue Ocean Strategy
Red Ocean StrategyCompete in existing
space.Beat the competition.Exploit existing demand.Make the value/cost
trade-off.Align the whole system of
company’s activities with its strategic choice of differentiation or low cost.
Blue Ocean StrategyCreate uncontested market
space.Make the competition
irrelevant.Create and capture new
demand.Break the value/cost trade-off.Align the whole system of a
company’s activities in pursuit of differentiation and low cost.
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
So What?Results of Their Study (n = 108 firms)
NewVentureLaunches
CreatedRevenue
DerivedProfits
14%86%
61%
62%
39%
38%
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
Attributes of a Blue Ocean
Who sails in blue ocean?– Often incumbent firms
What is the driver of technology pioneering?– Value Pioneering vs. Technology Pioneering
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
Attributes of a Blue Ocean
Blue oceans are not about technology innovation.
Incumbents often create blue oceans, usually within their core businesses.
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
Attributes of a Blue Ocean
Company and industry are wrong units of analysis.
The power of creating blue oceans builds brands.
Kim, W. C. & Mauborgne, R. 2004. Blue Ocean Strategy. Harvard Business Review, 82(10): 76-84.
Dealing with Darwinby Geoffrey Moore
DisruptiveInnovation
ApplicationInnovation
ProductInnovation
PlatformInnovation
EnhancementInnovation
IntegrationInnovation
ExperientialInnovation
ProcessInnovation
MarketingInnovation
A Broad Universe of Innovation Types
Value MigrationInnovation
Line ExtensionInnovation
Value EngineeringInnovation
Harvest& Exit
Renewal Innovation
OrganicRenewal
AcquisitionRenewal
DisruptiveInnovation
ApplicationInnovation
ProductInnovation
PlatformInnovation
Innovation Types for Growth Markets
The Product Leadership Zone
Innovation Types for Growth Markets
ProductNew Existing
Market
New
Existing
DisruptiveInnovation
ProductInnovation
ApplicationInnovation
PlatformInnovation
ExperientialInnovation
MarketingInnovation
Innovation Types for Mature Markets
The Customer Intimacy Zone
Customer Intimacy Zone
EnhancementInnovation
Line ExtensionInnovation
Innovation Types for Mature Markets
The Operational Excellence Zone
IntegrationInnovation
ProcessInnovation
Value MigrationInnovation
Value EngineeringInnovation
Operational Excellence Zone
Innovation Types for Declining Markets
Leveraging Category Renewal
Harvest& Exit
Category Renewal
Organic
Acquisition
Core & Context
ContextCore
Core/Context Analysis Framework
CoreProcess creates differentiation that wins customers
ContextAll other processes
Mission CriticalProcess shortfall creates serious and immediate risk
Non-Mission-CriticalAll other processes
Differentiation
Ris
k
Critical Questions to create wealth generating activities.
Where and in what ways is change creating the potential for new rules and new space?
What is the potential for revolution inherent in the things that are changing right now, or have already changed?
What are the discontinuities we could exploit?
Hamel, Gary. 2000. Leading the Revolution. Harvard Business School Press, Boston.
Critical Questions to create wealth generating activities.
What aspect of what’s changing can we come to understand better than anyone else in our industry?
What’s the deep dynamic that will make our new business concept oh-so-relevant right now? (Hamel, 2000)
Hamel, Gary. 2000. Leading the Revolution. Harvard Business School Press, Boston.
Additional Information
http://www.dealingwithdarwin.com/ http://www.youtube.com/watch?v=vh8dwbi6y
RM
