Blue Ocean Strategy
Chapter 4
Focus on the Big Picture, Not the Numbers
February 10, 2009
Group 1
Anna Sterling
Clay Jones
Johnnie Davis
Kimberly Smith
Nolan Bosworth
Shaina Weaver
Zane Barnes
Focusing on the Big Picture

Draw your company’s Strategy Canvas:
1.
2.
3.
Shows the strategic profile of the industry by
divulging factors of competition the shape the
industry.
Shows the strategic profile of current and potential
competitors and what factors they concentrate on.
Shows your own company’s strategic profile against
those or you competitors and the factors your
organization focuses on.
Drawing Your Strategy Canvas

The Four Steps of Visualizing Strategy: A summary
1.
2.
Visual Awakening – Compare your business with
competitors’ businesses by creating an “as is” strategy
canvas. Discuss what changes should be made.
Visual Exploration – Management must go into the field
and decide where best to implement the 6 paths of Blue
Oceans. Observe advantages and disadvantages of new
products and services. Decide which factors to keep,
eliminate, or modify.
Drawing Your Strategy Canvas (Cont.)

The Four Steps of Visualizing Strategy: A summary
1.
2.
Visual Strategy Fair – Draw a second strategy canvas
based on observations from time spent in the field.
Receive feedback from customers, competitors’
customers, and employees. Use this feedback to
construct your final canvas.
Visual Communication – Distribute all drafts of your
strategy canvas on a single page for comparison. Accept
projects and operational moves only if they are in-line
with your new strategy.
Step 1: Visual Awakening

Common Mistakes:
Discussing changes in strategy before resolving
differences of opinion about the current state of
play
 Executives are often reluctant to accept the need for
change


Executives’ answer:

A highly determined leader or a crisis
Step 1: Continued, Helping
Executives Understand



Ask them to draw the value curve of their
company’s strategy bring home the need for
change
This can be a forceful wake-up call for
companies to challenge their existing strategies
Example: EFS
EFS: European Financial Services

Had been struggling for a long time with an illdefined and poorly communicated strategy

Began the strategy process by bringing together
upper management from Europe, N. American,
Asia, and Australia

2 Teams: Value curve production and emerging
online foreign exchange business
EFS: Continued

The experience: Europe vs. America

The power of the website

EFS strategy vs. competitors (Clearskies)
Step 2: Visual Exploration: EFS
Example

EFS sent managers out for four weeks to gather
information.

They had to interview ten people involved in corporate
foreign exchange.

Also reached outside the industry’s traditional boundaries to
other companies that did not yet use corporate foreign
exchange.
Step 2: Visual Exploration: EFS
Example

EFS Findings:
 What
they thought was important turned out not to
be what the customer thought was important.
 Because
of these findings, EFS was able to
reformulate new strategies.
 Redid
the value curves and formulated new
compelling taglines that fit their business model.
Step 3: Visual Strategy Fair


Both teams presented their strategy canvases at a visual strategy fair.
(6 by the online group/6 by the offline group)

Attendees included…
 senior corporate executives
 noncustomers
 customers of competitors
 demanding EFS customers

After all 12 strategies were presented, each judge was given 5 sticky notes and told to put
them next to his/her favorite, then explain why they did not choose certain curves.

They realized that 1/3 of what they had thought were key competitive factors were, in fact,
marginal to customers. Another 1/3 either were not well articulated or had been overlooked
in the visual awakening phase. It then became clear that the executives needed to reassess
things such as EFS’s separation of its online & traditional business.

Following the visual strategy fair, the teams were able to draw a value curve that was a truer
likeness of the existing strategic profile than anything they had produced earlier.
Step 3: Visual Strategy Fair
Step 3: Visual Strategy Fair

Figure 4-5 summarizes EFS’s 4 actions to create value innovation, which is the
cornerstone of blue ocean strategy.

Figure 4-5: Eliminate-Reduce-Raise-Create Grid: The Case of EFS
Eliminate
Relationship
Management
Raise
Ease
of use
Security
Accuracy
Speed
Market commentary
Reduce
Account
Executives
Corporate Dealers
Create
Confirmation
Tracking
Step 3: Visual Strategy Fair

The new value curve exhibited the criteria of a successful
strategy, and it displayed more focus than the previous
strategy.

By collapsing its online & traditional businesses into 1
offering, EFS substantially cut the operational complexity
of its business model, making systematic execution far
easier.
Visualizing Strategy at a Corporate
Level

Using a strategy canvas aides in informing individual
business units throughout the corporation about the
necessary path to a blue ocean

When business units present their strategy canvases to one
another, they deepen their understanding of the other
businesses in the corporate portfolio
 transfer of strategic best practices across units
Step 4: VISUAL COMMUNICATION
Easily Understood

When communicating the future strategy, you
need to “dumb it down”.




All employees, in all departments, need to
understand.
Use only one page for easy comprehension.
Make sure everyone understands.
Support only plans in the direction of the new
strategy.
Step 4: VISUAL COMMUNICATION
What EFS did…

Gave every employee a one-page picture showing the
new and old strategies.


Meetings were held to explain what needed to be
reduced, raised, eliminated and created to get them into
a blue ocean


This allowed the employees to focus their efforts on the
future.
EFS employees were so motivated by this plan that they even
hung up the one-page picture in their cubes.
All investment decisions had to fit this picture.
Visualizing Strategy at a Corporate
Level

Samsung Electronics of Korea

used strategy canvases at 2000 corporate conference

seventy top managers attended, including CEO

unit heads presented canvases and implementation
plans with focus towards a blue ocean
Visualizing Strategy at a Corporate
Level

Samsung Electronics has institutionalized the use of the
strategy canvas through its establishment of the Value
Innovation Program (VIP) Center

equipped with 20 project rooms

teams discuss strategic projects focusing on strategy
canvases
Visualizing Strategy at a Corporate
Level

Do your business heads lack an understanding of the other
businesses in your corporate portfolio?

Are your strategic best practices poorly communicated
across your business units?

Are your low-performing units quick to blame their
competitive situations for their results?
Using the Pioneer-Migrator-Settler
(PMS) Map




PMS Map- helps visualize, plan, and predict a companies
future growth and profit.
Pioneers- business that offer unprecedented value and are
powerful sources of profitable growth. Their value curves
are different form the competitions on a strategy canvas. All
pioneers are blue oceans.
Migrators- are in between pioneers and settlers. They offer
improved value, but not innovative value.
Settlers- do not contribute to much future growth and are
stuck in a red ocean. Their value curves match the basic
shape of the industry.
Example PMS Map
Overcoming the Limitations of Strategic
Planning
1.
2.
3.
4.
Big picture (use a strategy canvas, and PMS
map)
Use creative components
Be motivational, invoking commitment
Discuss number-crunching and documents
“The soul never thinks without an image”, Aristotle
Takeaways

Step 1: Visual Awakening – Compare your business with
competitors’ businesses by creating an “as is” strategy
canvas. Discuss what changes should be made.

Step 2: Visual Exploration – Management must go into
the field and decide where best to implement the 6 paths
of Blue Oceans. Observe advantages and disadvantages
of new products and services. Decide which factors to
keep, eliminate, or modify.
Takeaways
Step 3: Visual Strategy Fair
 First, draw your “to be” strategy canvas based on insights
from field observations
 Second, get feedback on alternative strategy canvases from
customers, competitors’ customers, and noncustomers
 Third, use feedback to build the best “to be” future strategy
Takeaways

Step 4: Visual Communication
Distribute your before-and-after strategic profiles on
one page for easy comparison.
 Support only those projects and operational moves
that allow your company to close the gaps to
actualize the new strategy.

Takeaways

Make a Pioneer-Migrator-Settler (PMS) Map to
identify strengths and weakness.