The Four Actions Framework Eliminate-Reduce-Raise
advertisement
Eliminate-Reduce-Raise-Create Grid Blue Ocean Strategy: The Four Actions Framework Eliminate Eliminate Raise Raise Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 USA chen@jepson.gonzaga.edu Reduce Reduce Create Create © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices The Four Actions Framework Reduce Reduce IS/IT Role? Raise Raise Create Create Meals Lounges Seating class choices Hub connectivity Which factors should be created that the industry has never offered? Reduce Reduce Eliminate Eliminate A New Value Curve The Case of Southwest Airlines Eliminate Eliminate Which factors should be reduced well below the industry’s standard? Which of the factors that the industry takes for granted should be eliminated? Eliminate-Reduce-Raise-Create Grid: Friendly service Speed Create Create Frequent point-topoint departures Price versus average airlines Raise Raise Which factors should be raised well above the industry’s standard? © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Value Innovation Winners vs. Losers Costs Value Innovation utility al ig n • What separates winners from losers in creating (ultimate) strategic competitive advantage is neither bleeding-edge technology nor “timing for market entry.” • It is from “value innovation” Firm Firm Innovation price Value Value Innovation Innovation Customer Value cost © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices The Simultaneous Pursuit of Differentiation and Low Cost. © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 1 Characteristics of a Good Strategy Three characteristics of a good strategy • Focus a firm does not diffuse its efforts across all key factors of competition • Diverge diverge from the other players’ • Compelling Tagline Homework • Describe (find) a business example and employ “The Actions Framework” to create/improve value innovation (i.e., strategic competitive advantage). • Both example description and model are due next class (using Word). strategic profile is clear; a fun and simple to follow (enjoy © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices © John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 2
