Blue Ocean Strategy #2

Analytical Tools and Frameworks

How do you break out of this Red Oceans of bloody competition to make the competition irrelevant? How do you open up and capture a Blue Oceans of uncontested market space?

To address these questions, we turn to the strategy canvas, an analytic framework that is central to value innovation and the creation of Blue Oceans.

The value curve, the basic component of the strategy canvas, is a graphic depiction of a company’s relative performance across it’s industry’s factors of competition. To set a company on a strong, profitable growth trajectory in the face of these industry conditions, it won’t work to benchmark competitors and try to outcompete them by offering a little more for little less.

Therefore, to reconstruct buyer value elements in crafting a new value curve, Blue Oceans have developed the four actions frameworks.

1.Reduce

Which factors should be reduced well below the industry’s standard?

2.Raise

Which factors should be raised well above the industry’s standard?

3.Eliminate

Which factors that the company take for granted should be eliminated?

4.Raise

Which factors should be raised well above the industry’s standard?

These 4 actions I find it kinda important as the author keep mentioning it throughout the book   =)

Next, Blue Oceans proposed Three Characteristics of a Good Strategy

1.Focus

Every great strategy has focus, and a company’s strategic profile, or value curve, should clearly show it.

2.Divergence

The company that applies Blue Oceans always stand apart . By applying the four actions of eliminating, reducing, raising, and creating, the company differentiate their profiles from the industry’s average profile.

3.Compelling tagline

A good strategy has a clear and compelling tagline.

All these three characteristics of a Good Strategy shown by Southwest Airline. Find out more from the book peeps =D

Source: Blue Ocean Strategy by W.Chan Kim, Renee Mauborgne

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Posted on September 8, 2011, in Blue Ocean Strategy. Bookmark the permalink. Leave a comment.

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