Turn back the clock
• Which industries did not exist?
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Creating Uncontested Market Space and
Making the Competition Irrelevant
Cirque du Soleil
Blue Ocean Strategy
Red Ocean Strategy
Blue Ocean Strategy
Summary of Blue Ocean Strategy
 New Market Space
 Continuing Creation of Blue Oceans
 Impact of Creating Blue Oceans
 Rising Imperative of Creating Blue Oceans
 From Company and Industry to Strategic Move
 Value Innovation
 Formulating and Executing Blue Oceans
New Market Space
Creating Blue Oceans Is Consistent Across Time
Regardless of Industry
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1970 The First Mouse
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Continuing Creation of Blue Oceans
Impact of Creating Blue Oceans
Rising Imperative of Creating Blue Oceans
Driving forces include:
 Technological advances & improved industrial productivity
 Unprecedented array of products and services available
 Supply exceeds demand
 Globalization, niche markets and monopolies disappear
 20th century strategy and management approach waning
Formulating and Executing Blue Oceans
From Company and Industry to Strategic Move
Value Innovation, Blue Oceans Cornerstone
The Paradox of strategy
• The very language of strategy is deeply imbued
with military references - chief executive
"officers" in "headquarters,“ "troops" on the "front
lines."
• Described this way, strategy is all about red ocean
competition. It is about confronting an opponent
and driving him off a battlefield of limited
territory.
• Blue ocean strategy, by contrast, is about doing
business where there is no competitor. It is about
creating new land, not dividing up existing land.
A blue ocean is created in the region where a
company's actions favorably affect both its cost
structure and its value proposition to buyers.
Cost savings are made from eliminating
and reducing the factors an industry competes
on. Buyer value is lifted by raising and creating
elements the industry has never offered. Over
time, costs are reduced further as scale
economies kick in, due to the high sales
volumes that superior value generates.
The Simultaneous Pursuit of Differentiation and Low Cost
The Book and the
Authors
© JOHN ABBOTT
Prof Chan Kim
© JOHN ABBOTT
Prof Renee
Mauborgne
Accolades
• Over 2 million copies sold
• Translated into over 41 foreign
languages – a world record
• Taught as the major theory of strategy
at leading business schools
• Gives insights to CEOs, Executives,
Heads of State and Prime Ministers
What is the Blue Ocean?
• High profit growth at low
risk
• Industries not in
existence today
Summary
Conventional Logic
Blue Ocean Logic
Industry
Assumption
Industry conditions are
given
Industry condition can be
shaped.
Strategic
Focus
Build competitive advantages
to beat the competition.
Create a quantum leap in
buyer value to dominate the
market.
Customers
Retain and expand the
customer base through further
segmentation and
customization.
Think in terms of embracing
customer differences.
Go for the mass of buyers
and willingly let some
existing customers go. Think
in terms of embracing key
customer value
commonalities.
Summary
Conventional Logic
Blue Ocean Logic
Assets &
Capabilities
Think in terms of a
company’s existing assets
and capabilities.
Build on what it has.
Think free from a company’s
existing assets and
capabilities.
Ask, what if we start anew?
Product/
Service
offerings
Think in terms of
products/services offered by
the industry. Seek to
maximize the value of these
offerings.
Think in terms of buyers’
solution even if that transcends
the industry. Seek to solve
buyers’ major bottlenecks/chief
compromises in using the
products/services of the
industry.
Four Actions to create a Blue
Ocean
Raise
What factors
should be raised
well beyond the
industry standard?
Eliminate
Create
What factors
should be
eliminated that the
industry has taken
for granted?
What factors should
be created that the
industry has never
offered?
Reduce
What factors
should be reduced
well below the
industry standard?