This automotive industry case study highlights the common pattern underlying successful blue ocean strategic moves: Value Innovation. Boston: Harvard Business School Press. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered. One of the great examples was Swatch who many years ago revolutionized the affordable watch industry by turning a functional instrument into a fashionable, desirable watch that was inexpensive to purchase. From Wikipedia, the free encyclopedia Blue Ocean Strategy First edition cover Author W.
Or they try to put forth the most exemplary case of their operational excellence to garner support. Today, more than thirty years on, Quicken still remains the number-one-selling personal financial software. At the time, the automobile industry was still in its infancy, but there were around 500 automakers producing custom-made cars that were expensive and unreliable. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Until Ryanair looked across industries to see they actually worked in the transportation industry. It calls for profiles for leaders that are tailored to the very different tasks, degrees of power, and environments you find at each level. Today, NetJets is a multibillion-dollar business with the largest private jet fleet in the world — over seven hundred aircraft, flying over one hundred seventy countries NetJets observed that business travelers, the most lucrative mass of customers in the airline industry, had two principal choices: They could fly business class or first class on a commercial airline or the company could purchase its own aircraft to serve its corporate travel needs.
The Winning Strategic Approach While the authors of Blue Ocean Strategy suggest using the latter approach, no matter which you select, there are a few things to keep in mind. Let us take the case of pro-biotic drink Yakult. The systems also have two flat-panel monitors so that traders can see all the information they need at once and built-in analytic capability with the press of a button. Value Innovation is necessarily the alignment of innovation with utility, price and cost positions. The authors criticize 's idea that successful businesses are either low-cost providers or niche-players.
To achieve this, they go back to their interviewees with two sets of questions. There were far more noncustomers than customers. To keep the new profiles top of mind, the to-be canvases are pinned up prominently in the offices of both the leaders and their reports. The six paths framework in formulating blue ocean strategy are 1 Look across alternative industries, 2 Look across strategic groups within industry, 3 Look across buyer groups, 4 Look across complementary product and service offerings, 5 Look across the functional-emotional orientation of an industry and 5 Look across time to shape trends. Many of these tools are also used by practitioners and proposed by other. It was easy to use, providing users with the ability to buy individual songs at a reasonable price. Intuit focused on bringing out both the decisive advantages that financial software had over the pencil — speed and accuracy; and the decisive advantages that the pencil had over software — simplicity of use and low price — and eliminated or reduced everything else.
He soon finds that there is an entrance to an underground complex nearby. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition. On the other hand, corporations buy private jets to dramatically cut total travel time, to reduce the hassle of congested airports, to allow for point-to-point travel, and to gain the benefit of having more productive and energized executives who can hit the ground running upon arrival. When people bought cement they were on the path to building rooms of love, where laughter and happiness could be shared —what better gift could there be? For each leadership level the interview results get incorporated into this grid. By questioning conventional definitions of who can and should be the target buyer, companies can often see fundamentally new ways to unlock value.
Sadly, we are equally amazed by how much of it is squandered by poor leadership. Blue Ocean strategy in practice Kim pointed out how Amazon has shifted from an online retailer to a digital platform that sells practically anything. Which factors should be created that the industry has never offered? Alternative forms of entertainment —ranging from various kinds of urban live entertainment to sporting events to home entertainment—cast an increasingly long shadow. There are advantages and disadvantages to both a blue ocean and red ocean strategy. Limescale would never again be found swimming in British home-brewed tea.
They would spend less time putting out fires. Make the product or service not as good on the dimensions less valued by new target customers. They have very different forms but serve the same function: helping people manage their financial affairs. It takes the form of what we call as-is Leadership Canvases, analytic visuals that show just how managers at each level invest their time and effort, as perceived by the customers of their leadership. Does this sound like the strategic plans in your company? By understanding the context in which your product or service is used and what happens before, during, and after, you can identify pain points constraints of the consumers, eliminate these pain points through a complementary product or service offering. Selecting the right Blue Ocean move, conducting rapid market tests, finalizing, and launching the shift.
They are competing very successfully in the already saturated red ocean of the short-haul airline business. At this point the subteams are usually eager to explore what effective Leadership Profiles would look like at each level. Thus they created travel friendly, easy to use, hassle free, easy to set, fancy looking, pen like shots instead of syringes and insulin bottles. This difference in emphasis is important. There is ample opportunity for growth that is both profitable and rapid.
Organizations then use the grids to develop new profiles of effective leadership. Clearly, this will not happen. On motivating key players to aggressively move forward with change? After the fair is over, the original subteam members communicate the results to the people they interviewed who were not at the fair. Senior managers went from feeling towed under the waves by all the middle-management duties they had to coordinate and attend to, to feeling as if they could finally get their heads above water and see the beauty of the ocean they had to chart. The result was the new market space of fractional jet ownership. Its blue ocean strategic move challenged the conventions of the circus industry. The tool is browser-based and very simple to use.
André Rieu adds pleasure and emotion into his concerts and Apple integrated beautiful design and functionality into all its products and services. One of the greatest brands to look across time again and again has been apple. By 2003 more than two billion illegal music files were being traded every month. As the market space gets crowded, prospects for profits and growth are reduced. And can you really measure and assess whether leaders are embracing and internalizing these personal traits and styles? It created a blue ocean of new market space. In contrast, those who attempt a blue ocean strategy aim to achieve differentiation and at the same time, low cost. Path 3 — Look across the Chain of Buyers There are a chain of buyers who are directly or indirectly involved in the buying decision; look across this chain.