Blue Ocean Strategy2005년 11월 18일 Operation Management 12000000 강선희 11983249 박관배1/16Blue Ocean Strategy?Create uncontested market space. Make the competition irrelevant. Create and capture new demand. Break the value-cost trade-off. Align the whole system of a firm's activities in pursuit of differentiation and low cost.Compete in Existing market space. Beat the competition. Explore existing demand. Make the value-cost trade-off. Align the whole system of a firm's activities with its strategic choice of differentiation or low cost.Red Ocean StrategyRed Ocean StrategyBlue Ocean Strategy2/16The Profit and Growth Consequences of Creating Blue Oceans86%14%38%62%39%61%Business Launch Revenue Impact Profit ImpactLaunches within red ocean VS Launches for creating blue oceans3/16Value Innovation: The Cornerstone of Blue Ocean StrategyBased on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players.Defying one osiness model riskReconstruct market boundaries Focus on the big picture, not the numbers Reach beyond existing demand Get the strategic sequence rightRisk factor each principle attenuatesFormulation Principles5/16The Four Actions FrameworkRaise Which factors should be raised well above the industry's standard?Create Which factors should be created that the industry has never offered?A New Value CurveEliminate Which of the factors that the industry takes for granted should be eliminated?Reduce Which factors should be reduced well below the industry's standard?Three Characteristics of a Good StrategyHave a clear-cut and compelling tagline.Diverge from the other players', a result of not benchmarking competitors but instead looking across alternatives.Do not diffuse your efforts across all key factors of competition.Compelling taglineDivergenceFocus7/16Reconstruct Market BoundariesFind some trends that must be decisive, irreversible and have a clear trajectory to your business.Strip out s lead buyers to trade across alternatives industries.Look Across the Chain of BuyersLook Across Strategic Groups Within IndustriesLook Across Alternatives Industries8/16From Head-to-Head Competition to Blue Ocean CreationParticipates in shaping external trends over timeFocuses on adapting to external trends as they occurTimeRethinks the functional-emotional orientation of its industryFocuses on improving price performance within the functional-emotional orientation of its industryFunctional emotional orientationLooks across to complementary product and service offeringsFocuses on maximizing the value if product and service offerings within the bounds of its industryScope of product or service offeringRedefines the industry buyer groupFocuses on better serving the buyer groupBuyer groupLooks across strategic groups within industryFocuses on competitive position within strategic groupStrategic groupLooks across alternative industriesFocuses on rivals within its industryIndustryBlue Oceanbest “to be” future strategy.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 changeCompare your business with your competitors' by drawing your “as is” strategy canvas. See where your strategy needs to change4. Visual Communication3. Visual Strategy Fair2. Visual Exploration1. Visual Awakening10/16Reach Beyond Existing Demand“Unexplored” noncustomers who are in markets distant from yours.Third Fier“Refusing” noncustomers who consciously choose against your market.Second Fier“Soon-to-be” noncustomers who are on the edge of your market, waiting to jump ship.First TierThink noncustomers before customers. Think commonalities before differences. Think desegmentation before pursuing finer segmentation.The Three Tiers of Noncustomers `Reach beyond existing demand `11/16The sequence of Blue Ocean StrategyWhat are the adoption hurdles in actualizing youed interests.Political HurdleUnmotivated staff.Motivational HurdleLimited resources.Resource HurdleAn organization wedded to the status quo.Cognitive HurdleOvercoming these four hurdles using tipping point leadershipFacing four hurdlesExecuting a blue ocean strategyOvercome Key Organizational Hurdles `The Four Organizational Hurdles to Strategy Execution14/16The Importance of Fair ProcessExceeds ExpectationsStrategy ExecutionVoluntary CooperationBehaviorTrust and CommitmentAttitudesFair ProcessStrategy Formulation ProcessStating clearly the new rules of the game.Expectation clarityUnderstanding why final strategic decisions are made as they are.ExplanationInvolving individuals in the strategic decisions .EngagementThe 3E Principles of Fair Process `How Fair Process Affects People's Attitudes and Behavior `15/16Imitation Barriers to Blue Ocean StrategyValue innovation does not make sense to a company's conventional logic. 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