Blue Oceans Chapter 4
FOCUS ON THE BIG PICTURE, NOT THE
NUMBERS
Team #1
Andrew McDaniel
Brad Schaefer
Brandon Christian
Robert Pace
Ryan Schafer
OVERVIEW
• Focus on the Big Picture
• Four Steps of Visualizing Strategy
• Visualizing Strategy at Corporate Level
• Overcoming Limitations of Strategic Planning
FOCUS ON THE BIG PICTURE
•
Most Blue Ocean companies still get stuck on Red Ocean Strategy
•
Difficult to focus on big picture with managements conflicting agendas
•
Drawing a strategy canvas helps to chart future strategy
WHY USE A STRAGETY CANVAS?
•
Shows a strategic profile of an industry by depicting factors affect the industries
competition.
•
Shows competitors strategic profile and identifies which factors they invest
strategically
•
Shows a companies strategic profile (value curve) showing how they invest in
competitive factors and how they may invest in the future
FOUR STEPS OF VISUALIZING STRATEGY
Step 1: Visual Awakening
• Compare your business with your competitors
• Draw your “as is” strategy canvas
• See where your strategy needs to change
• Ex: EFS (European Financial Services)
• Corporate foreign exchange offline
• Corporate foreign exchange online
VISUAL AWAKENING
• Online
• Easy to use vs. Speed of website
STEP 2: VISUAL EXPLORATION
• Go into the field and explore ways to create blue oceans
• Observe distinct advantages of other products
• See what to eliminate, create, or change
VISUAL EXPLORATION
• Don’t rely on other people’s reports
• Examples
• Artists
• Michael Bloomberg
• Online analytics for financial information
VISUAL AWAKENING
• Offline
• Price, corporate dealers, flexible payment, speed, relationship
management, ease of use, responsiveness, knowledge, risk
• Online
• Price, real time rates, customer support, web site attractiveness, speed,
ease of use, accuracy, and security
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.
•
•
1/3 of what they had thought were key competitive factors were, in fact, marginal to customers.
1/3 either were not well articulated or had been overlooked in the visual awakening phase.
•
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
STEP 3: VISUAL STRATEGY FAIR
• The new value curve
• exhibited the criteria of a successful strategy
• 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.
STEP 4: VISUAL COMMUNICATION
EASILY UNDERSTOOD
• Explain
• All employees, in all departments, need to understand.
• Use only one page for easy comprehension.
• 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.
• This allowed the employees to focus their efforts on the future.
• Meetings held
• EFS employees were motivated.
• Hung up the one-page picture in their cubes.
• All investment decisions had to fit this picture.
VISUALIZING STRATEGY AT CORPORATE LEVEL
•
Greatly informs the dialogue among individual business units and the corporate
center
• This helps transform a company from a Red to Blue ocean player
• When Businesses present their strategy canvases to another they deepen their
understanding of other businesses in the corporate portfolio.
USING THE STRATEGY CANVAS
• In 2000 Samsung Electronics used strategy canvases at its corporate
conference.
• Unit heads presented their canvases and implementation plans
• Discussions were heated saying that the freedom of unit has to future
strategies was constrained by the degree of competition
• Poor performers felt that they had little choice but to match their
competitors’ offerings
USING THE STRATEGY CANVAS (CONT.)
• However, thanks to the mobile phone business’s implemented by their
canvas strategy the need to match competitors prices was removed.
• This is thanks to the value curve brought forth by the VIP or value innovation
plan put in place on their mobile phones
USING THE STRATEGY CANVAS (CONT.)
• Successful implementation of this strategy canvas, was created by
Samsung establishing the (VIP) or Value Innovation Program.
• Core cross-functional team members come together in the VIP center to
discuss their implementation of the strategic projects by focusing on strategy
canvases.
• To get an idea of how much time it takes for a strategy canvas to take place,
Samsung spent four months in the VIP room to create and launch their top
selling 40in LCD T.V.
USING THE PIONEER-MIGRATOR-SETTLER
(PMS) MAP
• For a company to and become more profitable managers must visualize
strategy.
• What separates the company's in this book that have created a blue ocean
for themselves is not that they found a new blue ocean, but rather developed
new technologies no other competitors offered.
USING THE PIONEER-MIGRATOR-SETTLER
(PMS) MAP (CONT.)
• A pioneer defined by this book is- the businesses that offer unprecedented
value. These are your blue ocean strategists, and are your most powerful
sources of profitable growth.
• A useful exercise for a corporate team pursing profitable growth is to plot the
company's current and planned portfolios on a pioneer-migrator-settler
(PMS) map.
OVERCOMING LIMITATIONS OF STRATEGIC PLANNING
• Integrate these ideas with strategic planning
• Discuss strategic planning
• Look at the big picture (Strategy canvas & PMS map)
• Include a creative component
• Motivate employees
“The soul never thinks without an image” – Aristotle
OVERCOMING LIMITATIONS OF STRATEGIC
PLANNING
Mission Statement:
“Delight our customers, employees, and shareholders by relentlessly
delivering the platform and technology advancements that become
essential to the way we work and live.”
•Questions?