A systematic approach to value innovation can help companies break free. With the aid of the four actions framework figure 4 and the eliminatereduceraisecreate grid, a new value curve can be drawn within the strategy canvas that breaks away from the industry value curve thereby creating a blue ocean. Blue ocean strategy formulation the strategy canvas. The authors use the metaphor of the blue ocean as a direct contrast to red oceans. Formulating blue ocean strategy 3reconstruct market boundaries 47 4focus on the big picture, not the numbers 81 5reach beyond existing demand 101 6 get the strategic sequence right 117 fmkim. I wish i could say my own pursuit of enlightenment led me to chan kim and renee mauborgnes masterpiece on embracing and leveraging difference. The blue ocean strategy has been used by companies like cirque du soleil to completely redefine the industries they entered by turning the conventional industry boundaries on its head. It is being published in a recordbreaking 44 languages and is a w. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. Strategy canvas from blue ocean strategy shortform blog. Chan kim and renee mauborgne blue ocean strategy reader. The core bostools are the strategic canvas with old and new value curve, six searching paths framework, fouractionsframework and sequence of blue ocean strategy. Blue ocean strategy is premised on the idea that companies can create extraordinary value if they follow a strategic framework to develop. A landmark work that upends traditional thinking about strategy, this bestselling book charts a bold new path to winning the future.
A value curve is a diagram which can be used to show instantly where value is created within an organizations products and services. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue. In effect, blue ocean strategy involves marketcreating innovation. The concept of a value curve is to use a diagram to compare products on a range of factors by rating them on a scale from low to high. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. This blog article is a overview of some of the key points of the book by w. He is the coauthor, along with renee mauborgne, of the book blue ocean strategy.
Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. The strategy canvas gets you to focus on bigpicture strategic items, rather than getting mired in. When a companys value curve, or its competitors, meets the three criteria that define a good blue ocean strategyfocus, divergence, and a compelling tagline that speaks to the marketthe company is on the right track. It is drawn by plotting the companies offering relative to other alternatives based on key success factors in the industry. The strategy canvas gets you to focus on bigpicture strategic items, rather than getting mired in numbers, spreadsheets. If you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. The value curve a graphic depiction of the way a company or an industry configures its offering to customersis a powerful tool for creating new market space. Kim and mauborgne introduce tools for exploring and exploiting these markets, such as the value curve, the strategy canvas, the price corridor of the mass, and the business model guidetools that have come to make up the blue ocean strategy framework. When expressed through a value curve, an effective blue ocean strategy like yellow tails has three complementary qualities.
Now, 12 years later, the authors offer an exciting new book that. Note that while drawing a new value curve, both differentiation and low cost have been taking into account. It opens up new possibilities that are not available to organizations operating within the existing costvalue structure. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of.
Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. Sometimes they even create new factors, thereby changing the industrys. Jul, 2018 to discover an elusive blue ocean, kim and mauborgne recommend that businesses consider what they call the four actions framework to reconstruct buyer value elements in crafting a new value curve. Value innovation is the backbone of a blue ocean strategy. Blue ocean strategy ch 2 analytical tools and frameworks. By looking at the alternatives of beer and readytodrink cocktails and thinking in terms of noncustomers, by redrawing the strategy canvas of the u. The desired result from blue ocean strategic thinking is a completely new value curve, as a result of launching a completely new product or finding new angles of opportunity within the existing market. To reconstruct buyer value elements in crafting a new value curve, blue ocean strategy has developed the four actions framework. A blue ocean strategy the first question the value curves answer is whether a business deserves to be a winner. Value innovation is the alliance of innovation with price, utility, and cost positions.
When these four questions are answered, you will then be able to come up with a new value curve to unlock your companys very own blue ocean. Value innovation is the cornerstone of blue ocean strategy. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. When a companys value curve, or its competitors, meets the three criteria that define a good blue ocean strategy focus, divergence, and a compelling tagline that speaks to the marketthe company is on the right track. Blue ocean strategy 1creating blue oceans 3 2 analytical tools and frameworks 23 part two. Blue oceans are defined by untapped market space, demand creation, and the opportunity for highly profitable growth. Learn to create a new value curve using the eliminatereduceraisecreate grid. The strategy canvas outlined in the book is basically a tool to visually show how a company will or has created a blue ocean strategy.
The strategy canvas is a central diagnostic tool and an action framework of blue ocean. Blue ocean strategy including examples and pdf download. Jan 20, 2015 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 their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and. It was expanded upon in their bestselling 2005 book, blue ocean strategy. Heres a simple summary of how a traditional red ocean strategy matches up to a blue ocean strategy.
Sep 24, 2017 in effect, blue ocean strategy involves marketcreating innovation. Its basic tenant is that lasting success comes not from competing in a crowded marketplace but from creating your own uncontested market space. Aim of this dissertation is to investigate whether eataly, the largest wine and food marketplace of the world, entered a blue ocean via business model innovation. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to. To seize new profit and growth opportunities, they also need to create blue oceans. This is done through detailed description of six reconstruction.
It eventually creates new value demand for consumers and thereby, expands the chances of growth potential. Now that youve done the hard work of identifying your blue ocean strategy, its time to present it to top management. It shows how a new blue ocean strategy creates a unique value curve, focusing on values critical to customers at the expense of lessimportant factors the strategy canvas gets you to focus on bigpicture strategic items, rather than getting mired in. The value curve is a tool for strategic managers to see. The first part presents key concepts of blue ocean strategy, including value innovation the simultaneous pursuit of. The value curvea graphic depiction of the way a company or an industry configures its offering to customersis a powerful tool for creating new market space. Dec 11, 2019 the blue ocean strategy canvas and the value curve the thinking that took place to move through visualization, the four actions, and the errc grid is manifest in the strategy canvas. When expressed through a value curve, an effective blue ocean strategy has three complementary qualities.
Consider this your guide to creating uncontested market spaceand making the competition irrelevant. It is sometimes present, but more often the innovation was creating something new that buyers value. To break the tradeoff between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industrys strategic logic and business model. Technology innovation is not necessary for blue ocean strategy. 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 curve also known as blue ocean strategy essentially, the goal is to create new market space in an industry that is completely mature. Made by group d of the minor global trendwatching 2015. The expanded edition of blue ocean strategy, is metaphorical, witty, and almost biblical in its commentary of the bloody waters of competitive red ocean market forces. The creation of blue oceans is about driving costs down while simultaneously driving value up for buyers. Written by the business worlds new gurus, blue ocean strategy continues to. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. How to create uncontested market space and make the competition irrelevant, w. It is thus a powerful tool to create new market spaces blue ocean strategy. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w.
May 24, 2011 if you are going to create a blue ocean from within a red ocean the key tool to use is a value curve. The value curve is a graphic depiction of the way a company configures its offering to customers. The premise on which the blue ocean strategy thesis is built, is a simple one. Study 74 terms mangt 595 exam 2 flashcards quizlet. Drawing on more than a decade of new work, kim and mauborgne show you how. The value curve model can be used to instantly show where the aspect of value is created within the organizations offerings of products and services. These can be features, benefits or ways in which a product is distributed or consumed. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Summary of the first four chapters of the international bestseller blue ocean strategy. A blue ocean strategy differs from a lowcost strategy in that a. It is used to plot how the current competitors compete in a market space, what factors they compete on and how your company and the competition scores on each key factor. The seminal book blue ocean strategy has sold over 4 million copies globally and is in print in 46 languages. Authors our story what we stand for books blue ocean global network.
The value curve shows graphically the way the company or the industry configures its consumer offering. Chan kim e renee mauborgne in the book the blue ocean strategy. The concept was further expanded in their bestselling book of 2005, blue ocean strategy. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Part 2 of the blue ocean strategy tackles the four formulation principles beginning with reconstructing market boundaries.
In part three, the authors discuss their idea about strategy execution that is derived by trust and commitment among all involved people to execute the agreedon strategy. Ikea is the worlds largest furniture retailer withheadquarters in leiden, netherlands. The term is coined from the book blue ocean strategy penned by w. It will show you what it takes to shift from bloody competition to new markets. To learn more about the power of blue ocean strategy, visit blueoceanstrategy. Clouderas new value curve epitomizes three characteristics of a good blue ocean strategy. The blue ocean strategy canvas is a diagnostic tool and a framework for action that helps market researchers ask the right questions for supporting the development. Create a new market space through innovating on the value you give to the customer. Casella wines used the blue ocean strategy to explore and create new uncontested market space. Chan kim and renee mauborgne published the blue ocean strategy which with over one million copies sold has become a mustread book for anyone involved in creating strategies for business. But its not always clear how to create a blue ocean strategy for yourself.
A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. Theeffect of blue ocean strategyon increasing competitive. It shows how a new blue ocean strategy creates a unique value curve, focusing on values critical to customers at the expense of lessimportant factors. Chan kim and renee mauborgne, professors at insead. The subscription model removed costs associated with low value activities in purchasing and deploying the service, allowing them to focus on strategic activities with a greater impact on their business customers could test the application in a single work group or division first, then extend the use. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. Buy blue ocean strategy, expanded edition revised ed. Blue ocean strategy and new business models in the food. Oct 10, 2007 to reconstruct buyer value elements in crafting a new value curve, blue ocean strategy has developed the four actions framework.
It opens up new possibilities that are not available to organizations operating within the existing cost value structure. The premise of the book is that companies can succeed by creating. A value curve or strategic profile is the graphic depiction of a companys relative performance across its industrys factors of competition. Blue ocean strategy excel template think outside of the box. In october 2011, ikea had a portfolio of 332 stores in 38countries. The strategy canvas allows your organization to see in one simple picture all the factors an industry competes on and invests in, what buyers receive, and what the strategic. Chan kim and renee mauborgne, as well as their 2005 book blue ocean strategy. Blue ocean strategy is a book published in 2005 and written by w. His book blue ocean strategy, coauthored with renee mauborgne, has sold 3. Blue ocean strategy powerpoint templates present better. To start thinking outside of the box, you might want to create a blue ocean strategy. 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. The basic component of our strategy canvas, the value curve, is a tool we. This, the authors refer to as the cornerstone of the blue ocean strategy.
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