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NUR SHAZLEEN YAZMEEN AHMAD HAWARI 2008738521
MOHD FAZLI AZMAN 2008270034
ZULKIFLEE ABD RAHIM 2008720413
BLUE OCEAN STRATEGY
Creating UncontestedMarket Space
and Making theCompetition Irrelevant
ABOUT THE BOOKAuthor: W. Chan Kim & : Renee MauborgnePublisher: Harvard Business School PressPages: 256 pp
ABOUT AUTHORW. Chan Kim Renee
Mauborgne
W. Chan Kim is a professor of strategy
and international management at INSEAD
in Fontainebleau, France. Previously, he
taught at the University of Michigan Business
School. He has written for numerous business journals, the Financial Times, The Wall Street
Journal and The New York Times, and is a founder of the Value
Innovation Network. He is an advisory member
for the European Union and the Country Advisor
to Malaysia
Renée Mauborgne is a Distinguished Fellow at INSEAD, where she is a
professor of strategy and management. She is also a Fellow of the
World Economic Forum and published
numerous articles on strategy and managing
multinational corporations.
CHAPTER STRUCTURE
PART ONE: Blue Ocean Strategy
• Creating Blue Oceans
• Analytical Tools & Frameworks
PART TWO: Formulating Blue Ocean Strategy
• Reconstruct Market Boundaries
• Focus on the Big Picture, Not the Numbers
• Reach Beyond Existing Demand
• Get the Strategic Sequence Right
PART THREE: Executing Blue Ocean Strategy
• Overcome Key Organizational Hurdles
• Build Execution into Strategy
• Conclusion: The Sustainability and Renewal of Blue Ocean Strategy
BLUE OCEAN STRATEGYThe high growth and profits an organization
can generate by creating new demand in an uncontested market space
Authors argue that red ocean strategies while necessary, are not sufficient to sustain high performance. Companies need to go beyond competing. To seize new profit and growth opportunities they also need to create blue oceans
Red Ocean Vs Blue OceanRED OCEAN BLUE OCEAN
Compete in existing market Create uncompetitive market
Beat the competition Make competition irrelevant
Exploit the existing demand Create and capture new demand
Make value-cost demand Create value-cost trade off
Firm strategies either low cost or differentiation
Firm strategies is both low cost and differentiation
*Red Ocean Strategy is the way that fights hard in existing market while Blue Ocean Strategy values innovation on getting new market
Strategy Canvas – Casella Wines
High
Low
Price
Use of enological
terminology
Above-the-line marketing Aging
quality
Vineyard prestige and
legacyWine
complexity
Wine range
Four Action Framework
A New Value Curve
Reduce•Which factor should be reduced well below industry standards?
Create•Which factors should be created that the industry has never offered?
Raise•Which factors should be raised well above the industry’s standard?
Eliminate•Which of the factors that the industry takes for granted should be eliminated?
Six Principles of Blue Ocean StrategyFormulating Blue
Ocean Strategy
1s
t Principle:• R
econstruct Market Boundaries
2n
d Principle:• F
ocus On the Big Pictures, Not the Numbers
3r
d Principle:• R
each Beyond Existing Demand
4t
h Principle:• G
et the Strategic Sequence Right
Executing Blue Ocean
Strategy
5th Principle:• Overco
me Key Organizational Hurdles
6th Principle:• Build
Execution into Strategy
Formulating Blue Ocean Strategy1s
t
P
r
i
n
c
i
p
l
e
Reconstruc
t Market Boundaries
Look Acros
s Alternative Industries
Look Across Strate
gic Groups within Indust
ries
Look Across the Chain
of Buyer
s
Look Across Complementary Product
& Service Offering
s
Look Across Functional or
Emotional
Appeal to
Buyers
Look Acro
ss Time
• Compare your business with competitor’s by drawing your strategy canvas.
• Change your strategy where needed.
• Go into the field to explore the 6 paths to
create Blue Ocean.• Observe distinctive
advantages of alternative products &
services.• See which factors
should eliminate, create or change.
• Draw “to-be” canvas based on insights from field
observations.• Get feedback on
alternative strategy canvases from customers,
competitors’ customers, and noncustomers.
• Use feedback to build the best “to be” future
strategy.
• Distribute your before-and-after strategic profiles on one page for easy comparison.
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
Visual Awakening
Visual Exploration
Visual Strategy
Fair
Visual Communic
ation
2
n
d
P
r
i
n
c
i
p
l
e
Focus on the Big
Pictures, Not the
Numbers
Third Tier
First Tier
YourMarket
First Tier
“Soon-to-be”
noncustomer who are on the
edge of
the market, waiting to
jump
ship.
Second Tier
“Refusing” noncustomer who
consciously choos
e against the mark
et.
Third Tier
“Unexplored” noncustomers who are in the markets
distant.
3
r
d
P
r
i
n
c
i
p
l
e
Reach
Beyond Existing Demand
• Is there exceptional buyer utility in your business?
Buyer Utility
YES
YES
YES
A Commerc
ially Viable Blue
Ocean Idea
YES
NO - Rethink NO - Rethink
NO - RethinkNO - Rethink
4
t
h
P
r
i
n
c
i
p
l
e
Get the Strategic Sequence Right
Executing Blue Ocean StrategyLet Managers experience it FIRST-HAND
Focus on HOT SPOT issues, search out COLD SPOT
JUMP THE
RESOURCES
HURDLES
Zoom on Kingpins
Put Kingpins into fishbowls• Transparency• Inclusion• Fair Process
JUMP THE
MOTIVATION
AL HURDL
ES
Leverage the ANGELs
Silence the DEVILs
KNOCK OVER POLITI
CAL HURDL
ES
5
t
h
P
r
i
n
c
i
p
l
e
Overcome Key Organizational Hurdles
Fair Process
Engagement
Explanation
Expectation Clarity
Create a culture oftrust and
commitment,the rest shall come
naturally.
6
t
h
P
r
i
n
c
i
p
l
e
Build
Execution
into Strategy
CONCLUSIONLESSON 1 •Be clear of elements that add-value. Keep useless elements that devalue will not bring any good. Reduce or eliminate them and reserve space to create and raise those which are more useful.
LESSON 2 •Focus on the things that is important. Do not always follow the crowd, stand alone and make hard decision which different from the norm. Walk you talk.
LESSON 3 •Sad truth! People will only appreciates when your effort adds value to their life.
LESSON 4 •Options that you have now is not necessarily the best, always look for alternatives and dare to challenge conventional wisdom.
LESSON 5 •Everything that happens, happens for reason. Look at things from different perspectives.
CONCLUSION
LESSON 6
•Push yourself to the limit and strive hard to achieve the goals. NO free lunch in this world and you shall get what you deserve based on your effort.
LESSON 7
•If you can't walk, you can't fly. Proper planning is always the most crucial step.
LESSON 8
•Big problem often comes from small problems. Work backward by breaking into smaller pieces while solving big problem
LESSON 9
•Focus on fair process, so the same principle applies in life. Be fair.
LESSON 10
•Renewal of Blue Ocean Strategy