Reactively formed strategies tries to keep up with the competition, thus loosing uniqueness. Value Innovation Value Innovation Costs Buyer Value Value Innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proposition to buyers. Blue Ocean Strategy. Groups within Industry. Do get more details in our full 12-page summary. The Blue Sea strategy looks at zooming as much as possible within existing markets to find your minimum viable audience. By also mapping the value curves of other players in the industry Quick Review of Blue Ocean Strategy De Blue Ocean Strategy (BOS) (Engels voor Blauwe-oceaan-strategie) is een bedrijfsstrategie.De strategie werd in 2005 gepubliceerd in het gelijknamige boek, geschreven door W. Chan Kim en Renée Mauborgne van The Blue Ocean Strategy Institute van INSEAD.De kern van de strategie bestaat erin nieuwe markten te creëren, de Blauwe Oceanen.Dit staat in tegenstelling met het in een bestaande … Most women don’t trade up to health clubs for the profusion of special machines, juice bars, locker rooms with sauna, pool, and the chance to meet men. Blue Ocean: 1 250 stuks x ( verkoopprijs van € 225 minus kostprijs van € 125) = € 125 000 marge Een Blue Ocean Strategie is gebaseerd op een zestal principes, te … The goal of a blue ocean strategy is to deliver more of what customers value (thus offering a clearly better product), and less of what they don’t (thus saving costs). Path three of blue ocean strategy’s six paths framework pushes companies to look across the chain of buyers in their industry. Blue Ocean Strategy is based on “time and again” proven data rather than unproven theories. We use cookies to ensure you get the best experience on our website and continuing implies your consent -. In this essay I will critically analyze and evaluate the Blue Ocean Strategy; its value to small-to-medium size enterprises and how it can create a demand in today’s hyper-competitive market space.I will also discuss the key elements required to develop the Blue Ocean Strategy. Blue ocean strategy is based on over decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years. Blue ocean strategy is a strategy that challenges the firms to foresee beyond competition by creating new uncontested market space i.e. It represents a shift in thinking about competing in an existing market space (red ocean) to thinking about finding, developing, exploiting, and protecting a new market space (blue ocean). Start-up investments were significantly lower for Curves and so were variable costs because of the wide range of factors the company eliminated and reduced. The concepts behind Blue Ocean Strategy are tangible and well documented. It graphically captures, in one simple picture, the current strategic landscape … Summary of the first four chapters of the international bestseller Blue Ocean Strategy. Each industry underwent continuous upheaval, each time spurred by a blue ocean strategy that 1) reduced factors unimportant to buyers, 2) increased factors important to buyers, 3) expanded the market. © Chan Kim & Renée Mauborgne. Select from the icons below to learn more. Get ready to stop struggling and seize new growth ! These were a small fraction of the cost, were used at home, and generally required little or no exercise equipment. Could you create a blue ocean of new market space as Curves did by applying path two of blue ocean strategy’s six path’s framework? A “blue ocean” strategy offers a compelling alternative to traditional assumptions about competitive advantage. It is not the same as a value chain since it does not focus upon internal sources of value, more so what our customers value … The Value Curve Model visualises products comparisons which, in an increasingly competitive environment, helps Product Managers face the challenge of finding ways to differentiate their Products Click To Tweet Value Curve Case Study : ING Direct Blue Ocean challenges companies to push the boundaries of their industries and offer consumers something unique of immense value. For each group, plot a value curve showing how much buyers receive in each of the factors. The latter points to the new strategy of delivering medicines by post. The strategy canvas is a tool from the Blue Ocean Strategy that helps you visualize any industry’s strategy and develop your own as well. ทบทวน EP.1 | การสร้างน่านน้ำสีคราม Curves built its blue ocean by drawing on the distinctive strengths of these two strategic groups, eliminating and reducing everything else. Blue Ocean Strategy, a book by W. Chan Kim and Renee Mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. These frameworks and tools are designed to be visual in order to effectively build the collective wisdom of the company and also to effectively execute a strategy through easy communication. Master Blue Ocean Strategy—create effective business strategies & beat the competition through target costing, value curves, buyer utility & more! This strategy needs to span across the entire system of a company’s activities. When a company’s value curve, or its competitors’, meet the three criteria that define a good blue ocean strategy – focus, divergence, and a compelling tagline that speaks to the market – the company is on the right track. The latter points to the new strategy of delivering medicines by post. Because, only with a blue ocean strategy and the right entrepreneurial mindset, you can swim into a more profitable and distinct blue … They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. Value Innovation Value innovation places equal emphasis on value and innovation. Here are a few examples of blue ocean strategic moves from a variety of different industries and sectors. BLUE OCEAN STRATEGY. #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. What’s more, this growth was triggered almost entirely through word of mouth and buddy referrals. Despite bumps along the way, it has become the largest women’s fitness franchise in the world. In the business world, a Blue Sea is a space/market easier to navigate as it’s not crowded like the classic red ocean. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Blue ocean strategy is based on over decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years. Formulating your Blue Ocean Strategy ANALYSING THE MARKET: TOOLS AND FRAMEWORKS. Creating Blue Oceans. It is based on practical approaches that have proven results during live market executions. Cost savings are made by eliminating and reducing the factors an … When they are at home it’s too easy to find an excuse for not working out. #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. Blue Ocean Strategy is a book published in 2004 written by W. Chan Kim and Renée Mauborgne, professors at INSEAD, and the name of the marketing theory detailed on the book.. Divergence is where the company has reduced or eliminated certain factors in strategy canvas which will have an imp… Blue Ocean Idea Index The blue ocean idea index is a simple but robust test demonstrating how the sequence of utility, price, cost, and adoption form an integral whole to ensure commercial success through blue ocean strategy. Path 2: Look Across Strategic. The member entered the exercise room where the machines (typically about ten) were arranged not in rows facing a television as in the health club, but in a circle to facilitate interchange amongst members, making the experience fun. Curves’ tagline could have been “for the price of a cup of coffee a day you can obtain the gift of health through proper exercise.”. Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean. The strategy bags the new demand by familiarizing unique products with advanced features that stand apart from the crowd. The term value curve appears in three key Harvard Business Review articles by W. Chan Kim and Renee Mauborgne, as well as their 2005 book – Blue Ocean Strategy. Divergence helps differentiating company from the industry’s average profile and helps them to achieve a leap in value on strategy canvas, such as low-cost business model. The experience of a Curves club was entirely different from that in a typical health club. Blue Ocean Strategy Summary Three Examples of Blue Oceans While this came in Appendix A in the book, this is a good time to cover three industries with repeated blue ocean creation. 2 Comments on How to create blue oceans using value curves Posted in Default By Arif Harbott Posted on May 24 2011 June 23 2020 Tagged blue ocean, strategy So the first article in the blue ocean series introduced what a blue ocean was and the theory behind it. For anyone tired of competing head-to-head and not getting far. This is the unknown market space." Blue Ocean Strategy. The value curve is a graphic depiction of the way a company configures its offering to customers. The result of reducing and focusing service on the essentials was that prices fell to a fraction of the cost of a traditional health club, opening the market to the broad mass of women. Blue Ocean Strategy 1. A “blue ocean” strategy offers a compelling alternative to traditional assumptions about... Analytical Tools. It is drawn by plotting the companies offering relative to other alternatives based on key success factors in the industry. It was expanded upon in their best-selling 2005 book, “Blue Ocean Strategy”. If you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. In reality, however, Curves exploded demand in the U.S. fitness industry, unlocking a huge untapped market, a veritable blue ocean of women struggling and failing to keep in shape through sound fitness. Made by Group D of the Minor Global Trendwatching 2015 The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. The Four Actions Framework developed by W. Chan Kim and Renée Mauborgne is used to reconstruct buyer value elements in crafting a new value curve or strategic profile. Red Ocean vs. Blue Ocean Strategy Value Innovation Strategy Canvas Four Actions Framework ERRC Grid Six Paths Framework Pioneer Migrator Settler Map Three Tiers of Noncustomers Sequence of Creating a Blue Ocean Buyer Utility Map Price Corridor of the Mass Four Hurdles to Strategy Execution Tipping Point Leadership Fair Process Blue Ocean Strategy & Blue Ocean Shift's Three Tiers of Noncustomers Framework allows companies to reach beyond existing demand and unlock a new mass of customers that did not exist before. As for time, few women can afford to spend one to two hours at a health club several times a week. A good strategy should have a strong focus, and a company’s strategic profile should clearly show it. A critical evaluation of Blue Ocean Strategy and its value to SMEs. Value curve is a graph created by the authors W. Chan Kim e Renee Mauborgne in the book The Blue Ocean Strategy. All rights reserved. It is … คะแนน : 7.5 / 10 ความแน่นของเนื้อหา : 8.5 / 10 ความง่ายในการอ่าน : 7 / 10 . The “Blue Ocean” alternative. What Is Your Value Curve? In short, you create a blue ocean by focusing on the factors that customers really care about, while discarding factors they don’t. Figure 1. Companies must work backwards from the point where the trend reaches its logical conclusion. While exercising, members could talk and support one another, and the social, nonjudgmental atmosphere was totally different from that of a typical health club. Compelling tagline. The value curve is a tool for strategic managers to see visually how their strategy works in relation to close competitors. Kleine bureaus hebben tenslotte geen marketing machine en willen dat de klant voor hen kiest om wat inhoudelijk de toegevoegde waarde voor de klant is. Strategy canvas for pharmacy by post Reproduced with permission from Xavier J.A., Blue Ocean Solutions: Making the Public Sector More Customer Centric. The greater the divergence between the to-be and as-is value curves, the more novel the solution. 2006/11/6 2 Presentation Overview 1. Conversely, women who use home exercise programs do so primarily for the time saving, lower costs, and privacy. Blue Ocean Strategy enables a fundamental transformation in mindset. At the other extreme was the strategic group of home exercise programs, such as exercise videos, books, and magazines. Blue Ocean Strategy frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index. Which factors that the industry has long competed on should be eliminated? These combined strategies effectively beat the competition or in their own words “make the competition irrelevant“.In other words, the key to success is to find a market that you can create and then make your own. Blue Ocean Strategy vs. Red Ocean Strategy. Blue Ocean Strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. According to the authors, nowadays most of the companies red oceans - very competitive and bloody markets with thousands of companies killing each other for minimal differentiations, suffocating themselves by trying to offer commodities with increasingly lower prices. The Blue Ocean Strategy represents the simultaneous pursuit of high product ... consider what they call the Four Actions Framework to reconstruct buyer value elements in crafting a new value curve. We use cookies to ensure you get the best experience on our website and continuing implies your consent -. With Blue Ocean strategy, innovators are able to systematically think through ways to create value for their target customers versus the competition. Discover each of the tools and learn HOW to put them into practice with exercise templates. Learn the essentials of blue ocean strategy and shift created by the #1 Management Thinkers in the World. Blue Ocean Strategy The “Blue Ocean” approach is a strategic tool that helps innovation strategists’ asses current and desired future strategic states whereas..Red Ocean is a current state. The strategy can… With a blue ocean strategic move that reconstructed boundaries between traditional health clubs and home exercise programs, Curves, the Texas-based women’s fitness company, grew like wildfire after it started franchising in 1995. Obviously with each idea generated, more analysis would be necessary to validate whether those specific ideas were valuable to customers but the Blue Ocean Strategy approach provides a fast and analytical approach to ideation and innovation. Blue Ocean strategies are developed through business insights of value creation from external trends. Rather than attempting to gain more share in an already saturated market, Blue Ocean Strategy is about creating demand in a growing, uncontested market and capturing this uncontested space. This strategic planning model is a departure from the typical management exercise that focuses on number crunching and competitive benchmarking. It’s composed of two axes: the factors the industry competes on and the level of value a buyer receives. Red Ocean: 1 000 stuks x ( verkoopprijs van € 250 minus kostprijs van € 175) = € 75 000 marge . Characteristics of a Good Blue Ocean Strategy Focus. The greater the divergence between the to-be and as-is value curves, the more novel the solution. iTunes solved the problem of recording industries when it started the business. A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, cultural, or other forms of value). Another tool in the Blue Ocean strategy framework is the idea of creating a new … To break the trade-off between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry’s strategic logic. A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created.. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. In this essay I will critically analyze and evaluate the Blue Ocean Strategy; its value to small-to-medium size enterprises and how it can create a demand in today’s hyper-competitive market space.I will also discuss the key elements required to develop the Blue Ocean Strategy. Yet at its inception, Curves was seen as entering an oversaturated market gearing its offering to customers that would not want it, and making its offering significantly blander than the competition’s. With a blue ocean strategic move that reconstructed boundaries between traditional health clubs and home exercise programs, Curves, the Texas-based women’s fitness company, grew like wildfire after it started franchising in 1995. Here’s a brief overview of some of the tools and frameworks used in the formulation and execution of the Blue Ocean Strategy. This blog article is part of a series on the book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne. The Value Curve Model was introduced by academics W Chan Kim and Renee Mauborgne in the Harvard Business Review article from the year 1997 in the month of January titles “Value Innovation: The Strategic Logic of High Growth”.The concept was further expanded in their bestselling book of 2005, “Blue Ocean Strategy”. Blue ocean strategy pushes companies to create new industries and break away from the competition. Blue Ocean Strategy's Fatal Flaw By Wayne E. Pollard In their international bestseller, Blue Ocean Strategy, W.Chan Kim and Renee Mauborgne provide tools and frameworks for creating "blue oceans"—their term for "all the industries not in existence today. The value curve of blue ocean strategy always stands apart from the competitors. David Onoue 6-5-07 COM 459 Jeff McNeill by W. Chan Kim, Renee Mauborgne Blue Ocean Strategy 2. Today, twenty years out, it has nearly ten thousand clubs worldwide serving more than four million members. The Quickfit training system used hydraulic exercise machines, which need no adjusting and were safe, simple to use, and nonthreatening. The successful outcome is creation of uncontested market space – built around new product attributes – which renders the “competition” irrelevant, creating and capturing new demand in contrast to exploiting … At the one extreme, the U.S. fitness industry was awash with traditional health clubs that catered to both men and women, offering a full range of exercise and sporting options, usually in upscale urban locations. However, while the Blue Ocean focuses on creating uncontested markets. The question Curves focused on: What made women either trade up or down between traditional health clubs and home exercise programs? The Strategy Canvas (incorporating value curves) and Four Actions Framework are … As an entrepreneur you will be researching markets most of which will either be owned by 2 conglomerates. Here’s a neat little summary for each strategy: Blue Ocean Strategy Red Ocean Strategy 2. With the increasing popularity of the Internet, Netflix has become a streaming service with a wide choice of films and TV series Later they launched their shows and movies available only on their platform. Examples of Blue Ocean Strategy. We’ll cover 15+ Blue Ocean Strategy examples so you can figure out how to create your own blue ocean. Our multimedia cases and interactive exercises are designed to help you build a deeper understanding of key blue ocean strategy concepts, developed by world-renowned professors Chan Kim and Renée Mauborgne. Value innovation is the cornerstone of blue ocean strategy. Profit Model of Blue Ocean Strategy 30. Their trendy facilities were designed to attract the high-end health club set with investment costs for a traditional full-service health club then running from $500,000 to more than $1 million, depending on the city center location. Curves. The strategy canvas is a central diagnostic tool and an action framework of blue ocean. According to the Blue Ocean Strategy principles, companies should not only try to compete in existing markets (Red Oceans), but also find or create new markets where competition does not yet exist (Blue Oceans). BLUE OCEAN STRATEGY. Since the industries are in a state of non-existence, there is absolutely no relevance of peer comparison. The research of W. Chan Kim and Renée Mauborgne focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean.The database and research have continued to expand and grow over the last ten years since the first edition of the book was published and the strategic moves we studied depict similar patterns, whether blue oceans were created in for-profit industries, non-profit organizations, or the public sector. A critical evaluation of Blue Ocean Strategy and its value to SMEs. Blue Ocean Strategy is all about devising and acquiring the uncontested market forum by spawning a new demand. There are several examples of the blue ocean strategy all over the world that have been accepted by many industries to get benefits such as Canon, iTunes, Cemex, Philips, Netjets, Curves, JCDecaux, Quicken, Polo Ralph Lauren, and so on. Create An Attribute. Blue Ocean Strategy (กลยุทธ์มหาสมุทรสีคราม) EP.3. Blue Ocean Strategy Formulation - The Strategy Canvas. Curves offered distinctive value at a lower cost. But it’s not always clear how to create a blue ocean strategy for yourself. However, the authors fail to discuss (at any Divergence. Which factors should be created that the industry has never offered. The creation of blue oceans is about driving costs down while simultaneously driving value up for buyers. Implementing the blue ocean strategy is, simply put, a gargantuan task. It makes the company to stand apart from the rest. Here are key … Strategy canvas for pharmacy by post Reproduced with permission from Xavier J.A., Blue Ocean Solutions: Making the Public Sector More Customer Centric. De ‘Blue Ocean’ voor kleinere adviesbureaus kunnen we dan via de blauwe curve in het strategieplaatje weergeven: Twee aspecten zijn dus toegevoegd en op andere punten zijn andere keuzes gemaakt. They are relatively easy to understand and apply to innovation processes and business… Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. -By looking across the chain of buyers, which consists of the purchasers, users, and influencers companies can gain new insights into how to redesign a company’s value curves to focus on a set of overlooked buyers, which can in return lead a company to the discovery of a blue ocean. It develops mental horizons and helps in recognizing the opportunities.

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