Navigating Blue Ocean Strategy: Myths and Realities
Delve into the nuances of Blue Ocean Strategy as we debunk common misconceptions and provide insights on creating uncontested market space. Explore customer-oriented strategies, differentiation, innovation, and pricing dynamics essential for a successful Blue Ocean Strategy implementation.
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Presentation Transcript
Avoid Red Ocean Traps Trevor Thomas & Kevin Smith
How to Handle These Traps When they arrive you beat them down. Make sure the framing is right for your blue ocean.
Blue Ocean is a Customer-Oriented Strategy Don't look at existing customers. Explore noncustomers
To Create a Blue Ocean, One Must Venture Beyond Core Business Stick to your guns. Nintendo Wii Chrysler Minivan Either companies end up shying away or they look too far afield.
Misconception That Blue Oceans are About New Technology Not so much of new edge technology but rather things like productivity, ease of use, fun or environmental friendly. When trying to make a blue ocean by using new edge technology it can be difficult for the consumer to understand.
You Must Be First to the Market Speed is important but won't lead to a blue ocean alone. linking innovation with value is the key. iMac, iPod, iTunes
Blue Ocean Strategy and Differentiation Strategy are the Same Differentiation has to happen with low cost in mind to become a blue ocean strategy. When companies associate differentiation with blue ocean they focus on what to raise rather than what to eliminate.
Misconception that blue ocean strategy is a low cost strategy that focuses on low pricing The key is value With blue ocean it's not all about low pricing its about strategic pricing Strategic pricing can be in any value range Cirque du Soleil found their strategic price at the high end Southwest Airlines found their strategic price at the low end
The belief that blue ocean strategy is innovation There is a difference in innovation and value innovation Innovation is just creating something new that may be useful to society With value innovation you are creating something that opens you up to the mass of buyers
The belief that blue ocean strategy is a theory of marketing and a niche strategy Blue Ocean requires more than a compelling value proposition Sustainable success can only be achieved when a companies value propositions is supported by internal and external people Blue ocean is not a niche strategy Blue ocean is about opening up and finding the largest catchment of demand in a market
The belief that blue ocean strategy sees competition as bad when in fact it can be good for companies Blue ocean strategy doesn't see competition as bad but doesn't see it as always good Little competition is good but when they market gets to saturated is when you implement blue ocean strategy Blue ocean is about going on competing and finding new market space
The belief that blue ocean strategy synonymous with creative destruction or disruption Creative destruction and disruption effects a existing market by effecting a earlier technology or existing product Blue ocean goes beyond this and creates nondestructive creation Nintendo wii created a blue ocean in the video game industry It created a physically active, family gaming system It did not displace the existing gaming systems it just reached a larger market
