Creating Blue OceansCole Bengford

Weizhou LinJonathan Hoelzer

Creating a New PathCirque du Soleil

Guy Laliberté – CEOAchieved remarkable growth in poor market“Only way to beat the competition is to stop

trying to beat the competition.”

New Market SpaceTo understand what Cirque du Soleil achieved, imagine two market places:

Red Ocean- • Represent all industries in existence • The known market space

Blue Ocean – • Represent all industries not in existence • The unknown market space

Red OceanIndustry boundaries are defined and accepted Companies try to outperform each other Cutthroat competitionFish Market

Blue OceanUntapped market spaceDemand creationHighly profitable growthMost blue oceans created within industry

boundaries Competition is irrelevant 3M Science

About 3M• Founded 1902 originally as Mining Venture• Formerly Known as Minnesota Mining and

Manufacturing Company• American Multinational Conglomerate

Company• $30 billion in Sales• Employs 88,000 people worldwide

3M ContinuedProduces more than 55,000 products(adhesives,

abrasives, laminates, passive fire protection and even medical supplies)

Operations in more than 65 Countries3M products available for purchase through

distributers and retailers in over 200 countriesAchievements' recognized by American Institute

of Management “one of the five best-managed companies in the

United States

http://txmqstaffing.com/fishing-in-a-blue-ocean/

Competition and Red OceansAs similar-product prices gradually rise, we focus

more on the “price of the sale” rather than the product.

Crest may be your brand choice, but Colgate might have a special price cut.

Red ocean intensifies Blue ocean created out of boundaries within red

oceans Industry boosts from competition within red

oceans

3M CompetingCompany competes with innovationWaterproof Sandpaper and masking tape, as well as

cellophane aka Scotch Tape.Unique Sound deadening products for carsProduced Several models of Magnetic Tape Recorders that

still have a following to this day3M’s main competitor is GE(General Electric) and others

include Danaher(DHR) and Tyco International(TYC)3M is so successful based off controlling such a large market

share and continue to develop new products in other markets therefore increasing revenue and competition

3M3M relates to that of Cirque du Soleil’s

success with expanding into new uncontested market space

This made competition irrelevantFor example 3M in the 1970’s created a board

game line, entering a new market that was not as contested at the time, allowing 3M to again thrive in markets other than production of Adhesives etc..

From Company to Industry to Strategic Move In the Search of Excellence and Built to Last

Companies in survey disappeared within 2 yrs of publication

HP success was of industry success not the company, Japanese companies as well

Cirque du Soleil entertainment (blue ocean market)Strategic (market creating) move, not company or industry,

Compaq not independent, server industry comeback Strategic Move (auto, Ford Model T, computer, Compaq

Server, cinema, Cirque du Soleil entertainment )

Value Innovation: The Cornerstone of Blue Oceans StrategyValue innovations vs. value creationValue Innovation - focus not on competitors, value

and innovation.Adding value, innovations and lowering costCirque du Soleil – Circus, tents , clowns,

acrobatics. Theater performance, multi production pricing (Broadway Shows)

Value Innovation: The Cornerstone of Blue Oceans Strategy Cont.

Formulating and Executing Blue Ocean Strategy