BLUE OCEAN SHIFT: A SUMMARY

"Blue ocean strategy pursues differentiation and low cost simultaneously by reconstructing market boundaries...A thriving blue ocean strategy is built on more than differentiation and low-cost in its value proposition. It must align value, profit, and people propositions so that each reinforces the others."

by?W. Chan Kim?(Author),?Renée Mauborgne?(Author)

Overview

Looking for business ideas where there is no competition, where it is all wide-open blue ocean, uncharted territory.?Transcend the competition with a “blue ocean shift” and a blue ocean team of 10-15 people.

New markets are:

1. Disruptive – Digital photography vs. film based
2. Non-disruptive – Viagra (or MySpace before Facebook came along)
3. Both disruptive and non-disruptive

4 Traits of Perspective Shift

1. Thinks of industry conditions as malleable (we don’t have to do it the conventional way).
2. Don’t beat the competition. Make them obsolete.
3. Produce a new demand (did not previously exist)
4. Low cost and distinct

3 Elements of Humanness

1. Atomization – be able to break down the overwhelming into bite-sized pieces, focusing on one at a time
2. First-hand discovery – each person on the team need to find new ways to think for themselves through their own experience
3. Fair process – following three principles

• Engagement – Bring stakeholders into the decision making process
• Explanation – Clear breakdown of decisions and ideas that are rejected
• Clear expectations- What will people experience and what will the responsibilities entail

The philosophies above are the underlying principles behind the “The 5 Blue Ocean Tools”, which is a process (or framework) the authors have invented to create a Blue Ocean Shift within a company.?The goal behind the process outlined below is to incorporate the elements of humanness as we shift our perspective and discover new markets.

5 Blue Ocean Steps

STEP 1) pioneer – migrator – settler map of your products

• This lets you assess your organization’s current products or services so that you know where you stand in your market.
• Draw a square with three columns, one for each category.
• Draw circles reflective of total revenue presented by each of the three categories.
• The more your business depends on settlers, the more vulnerable it will be in the future. Endeavor to create larger pioneer circles and move your migrators up a row.

?

STEP 2) Strategy canvas

• Here you plot on a graph your competitive value against that of your rival
• Pick 5 to 12 key competitor factors and list them on the horizontal axis.
• On the vertical axis rate yourself versus your rival(s) on a scale of 1 to 5.
• If your curves are similar to the competition, then you are in a red ocean.

TO READ THE FULL ARTICLE CLICK HERE...