BlueOceanStrategyW.ChanKimandReneeMaubourgneEditedbyChitchaiP.GJI,pchitchai@gmail.com2Agenda1.BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworks2.FormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRight3.ExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusionGJI,pchitchai@gmail.com3Agenda1.BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworks2.FormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRight3.ExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusion1.BlueOceanStrategy(BOS)GJI,pchitchai@gmail.com4CreatingBlueOceanNewMarketSpaceTheContinuingCreationofBlueOceansTheImpactandImperativeofCratingBlueOceansFromCompanyandIndustrytoStrategicMoveValueInnovation:TheCornerstoneofBOSTheSixPrinciplesofBOSGJI,pchitchai@gmail.com6ValueInnovation:TheCornerstoneofBOSCostsBuyerValueValueInnovationTheSimultaneousPursuitofDifferentiationandLowCostGJI,pchitchai@gmail.com7RedOceanvs.BlueOceanStrategyRedOceanStrategyCompeteinexistingmarketspaceBeatthecompetitionExploitexistingdemandMakethevalue-costtrade-offAlignthewholesystemofafirm’sactivitieswithitsstrategicchoicesofdifferentiationorlowcostFocusesonadaptingtoexternaltrendsastheyoccurCreateuncontestedmarketspaceMakethecompetitionirrelevantCreateandcaptureuntappeddemandBreakthevalue-costtrade-offAlignthewholesystemofafirm’sactivitiesinpursuitofdifferentiationandlowcostParticipatesinshapingexternaltrendsovertimeBlueOceanStrategyGJI,pchitchai@gmail.com8TheSixPrinciplesofBOSExecutionPrinciplesOvercomekeyorganizationhurdlesBuildexecutionintostrategyRiskFactorEachPrincipleAttenuates↓Organizationrisk↓ManagementriskFormulatingPrinciplesReconstructmarketboundariesFocusonthebigpicture,notthenumbersReachbeyondexistingdemandGetthestrategicsequencerightRiskFactorEachPrincipleAttenuates↓Searchrisk↓Planningrisk↓Scalerisk↓BusinessmodelriskGJI,pchitchai@gmail.com9AnalyticalToolsandFrameworksStrategyCanvasFourActionsFrameworkEliminate-Reduce-Raise-CreateGridThreeCharacteristicsofaGoodStrategyGJI,pchitchai@gmail.com10StrategyCanvasUSWineIndustryinthelate1990sHighPriceLowPremiumWinesBudgetWinesWinerangeWinecomplexityVineyardprestigeAgingqualityAbove-the-linemarketingUseofenologicalterminologyanddistinctionsinwinecommunicationGJI,pchitchai@gmail.com11FourActionsFrameworkREDUCEWhichfactorsshouldbereducedwellbelowtheindustry’sstandards?CREATEWhichfactorsshouldbecreatedthattheindustryhasneveroffered?ELIMINATEWhichofthefactorsthattheindustrytakeforgrantedshouldbeeliminated?RAISEWhichfactorsshouldberaisedwellabovetheindustry’sstandard?ANewValueCurveGJI,pchitchai@gmail.com12Eliminate-Reduce-Raise-CreateGridCaseStudy:YellowTailReduceWinecomplexityWinerangeVineyardprestigeCreateEasydrinkingEaseofselectionFunandadventureEliminateEnologicalTerminologyAgingqualitiesAbove-the-lineMarketingRaisePriceversusbudgetwinesRetailstoresinvolvementGJI,pchitchai@gmail.com13ANewValueCurve–StrategyCanvasofYellowTailHighPriceEasydrinkingEaseofselectionLowPremiumWines[yellowtail]BudgetWinesFunandadventureWinerangeWinecomplexityVineyardprestigeAgingqualityAbove-the-linemarketingUseofenologicalterminologyanddistinctionsinwinecommunicationCREATEREDUCEELIMINATERAISEGJI,pchitchai@gmail.com14StrategyCanvas:SouthwestAirlinesHighPriceMealsLoungesSeatingclasschoiceHubconnectivityFriendlyServiceSpeedFrequentPint-to-pointdepartureLowAverageAirlinesSouthwestAirlinesCarTransportGJI,pchitchai@gmail.com15StrategyCanvas:CirqueduSoleilHighPriceStarperformersAnimalshowsMultipleshowarenaFunandhumorThrillandchallengeUniquevenueThemeLowRinglingBros.&Barnum&BaileyCirqueduSolielSmallerRegionalCircusesRefinedwatchingenvironmentMultipleProductionArtisticmusicanddanceAisleconcessionsGJI,pchitchai@gmail.com16ThreeCharacteristicsofaGoodStrategyFocusDivergenceCompellingTaglineGJI,pchitchai@gmail.com17Agenda1.BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworks2.FormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRight3.ExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusion2.FormulatingBlueOceanStrategyGJI,pchitchai@gmail.com18ReconstructMarketBoundariesPath1:LookAcrossAlternativeIndustriesPath2:LookAcrossStrategicGroupswithinIndustriesPath3:LookAcrossChainofBuyersPath4:LookAcrossComplementaryProductsandServiceOfferingsPath5:LookAcrossFunctionalorEmotionalAppealtoBuyersPath6:LookAcrossTimeGJI,pchitchai@gmail.com19StrategyCanvas:NetJetsPath1:AlternativeIndustryHighPrice(fixedpurchase+variablepriceperflight)Needforcustomertomanageaircraft(AircraftM&A)DeadheadcostsSpeedoftotaltraveltimeEaseoftravel(include.Check-in,customs,etc.FlexibilityandreliabilityIn-flightserviceLowPrivateJetCorporatetravelNetJet’sValueCurveCommercialAirlinesFirstandBusiness-Classes