Clustermeeting 4Blue Ocean Strategy

9 mei 2012

De Barrier Houthalen

Voorzitter: dhr. Matty Zadnikar, Z-Group

Professor: Prof. dr. Wim Vanhaverbeke, UHasselt

Spreker: dhr. Jo Nelissen, ABN Klimatisatie

Blue Ocean Strategy

Go where the profits and growth are - and where the competition isn’t

W. Chan Kim & Renée Mauborgne

Analytical tools and frameworks

Strategy CanvasHigh

Low

Price Use of enological

terminology

Above-the-line marketing Aging

quality

Vineyard prestige and legacy Wine

complexity

Wine range

Figure 2-1

Price

Fun &

humor

Multipleproductions

Artisticmusic

& danceAisle

concessions

Animalshows

StarPerformers

Multipleshow arenas

High

Low

Ringling Bros. & Barnum & Bailey

The strategy canvas of Cirque du Soleil

Theme

Refinedwatching

enjoinment

Thrills& danger

Uniquevenue

Cirque du Soleil

SmallerRegionalCircuses

8

What factors should be eliminated that the industry has taken for granted?

Eliminate

What factors should be reduced well below the industry standard?

Reduce

What factors should be created that the industry has never offered?

Create

What factors should be raised well beyond the industry standard?

Raise

Four Actions Framework: Key to Value Curve

The key to discovering a new value curve lies

in answering four basic questions

BOS Logic: Reconstruct market boundaries

Industry Focuses on rivals within its industry

Strategic Group Focuses on competitive position within strategic group

Buyer Group Focuses on better serving the buyer group

Scope of Product and Service

Offerings

Focuses on maximizing the value of product and service offerings within the bounds of its industry

Functional-emotional Orientation of an

Industry

Focuses on improving price-performance with the functional-emotional orientation of this industry

Time/Trends Focuses on adapting to external trends as they occur

Looks across alternative industries

Looks across strategic groups within its industry

Redefines the buyer group of the industry

Looks across to complementary product and service offerings that go beyond the bounds of its industry

Rethinks the functional-emotional orientation of its industry

Participation in shaping external trends over time

Boundaries of Competition

Head-to-HeadCompetition

Creating New Market Space

Four Steps of Visualizing Strategy1. Visual

Awakening2. Visual

Exploration3. Visual Strategy

Fair4. Visual

Communication

•Compare your business with your competitors’ by drawing your “as is” strategy canvas.

•See where your strategy needs to change

•Go into the field to explore the six paths to creating blue oceans.

•Observe the distinctive advantages of alternative products and services.

•See which factors you should eliminate, create, or change.

•Draw your “to be” strategy 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.

Three Tiers of CustomersThere is a universe of noncustomers which can be turned into customers to offer a big blue ocean market.

1st tier: “Soon-to-be” noncustomers who are on the edge of your market

2nd tier: “Refusing” noncustomers who consciously choose against your market

3rd tier: “Unexplored” noncustomers who are in markets distant from yours

Your Market

First Tier

Second Tier

Third Tier

BOS Logic: Get the

strategic sequence

right

Buyer utility

Is there exceptional buyer utility in your business idea?

Price

Is your price easily accessible to the mass of buyers?

CostCan you attain your cost target to profit at your strategic price?

Adoption

What are the adoption hurdles in actualizing your business idea? Are you addressing them up front?

A Commercially Viable Blue Ocean

Idea

No Rethink

Yes

Yes

Yes

Yes

No Rethink

No Rethink

No Rethink

Buyer Utility Map

1.Purchase2.Delivery

3.Use4.Supplements

5.Maintenance6.Disposal

Customer Productivity

Simplicity

Convenience

Risk

Fun and Image

Environmental friendliness

The Six Stages of the Buyer Experience Cycle

Th

e S

ix U

tilit

y L

ever

s

Buyer Experience Cycle

.

Purchase Delivery Use Supplements Maintenance Disposal

How long does it take to find the product you need?

Is the place of purchase attractive and accessible?

How secure is the transaction environment?

How rapidly can you make a purchase?

How long does it take to get the product delivered?

How difficult is it to unpack and install the new product?

Do buyers have to arrange delivery themselves? If yes, how costly and difficult is this?

Does the product require training or expert assistance?

Is the product easy to store when not in use?

How effective are the product’s features and functions?

Does the product or service deliver far more power or options than required by the average user? Is in overcharged with bells and whistles?

Do you need other products and services to make this product work?

If so, how costly are they?

How much time do they take?

How easy are they to obtain?

Does the product require external maintenance?

How easy is it to maintain and upgrade the product?

How costly is maintenance?

Does use of the product create waste items?

How easy is it to dispose of the product?

Are there legal or environmental issues in disposing of the product safely?

How costly is disposal?

Uncovering Blocks to Buyer UtilityPurchase Delivery Use Supple-

mentsMainte-nance

Disposal

Customer Productivity: In which stage are the biggest blocks to customer productivity?

Simplicity: In which stages are the biggest blocks to simplicity?

Convenience: In which stage are the biggest blocks to convenience?

Risk: In which stage are the biggest blocks to reducing risks?

Fun and Image: In which stage are the biggest blocks to fun and image?

EnvironmentalFriendliness:

In which stage are the biggest blocks to environmental friendliness?

Profit Model of Blue Ocean Strategy

The profit model of blue ocean strategy shows how value innovation typically maximizes profit by using the three levers of strategic price, target cost, and pricing innovation.

The Strategic Price

The Target Profit

The Target Cost

Streamlining and Cost Innovations Partnering

Pricing Innovation