Blue Ocean Strategy:Chapter 4

Jacob Felty Sabrea Hebb Alexandra Hill

Shaady IbrahimCallie MyersColby Wulf

Visualizing Strategy• Creating company strategy– Blue Ocean Strategy

• Increase Market Share, capture new segments (cut costs), and outline goals

• Focus on Big Picture

Focus on Big Picture

• “Strategy Canvas” of the planning process1) Strategic profile of industry (factors/ affect of

competition)2) Strategic profile of current/potential competitors3) Invested factors of competition

– Strategic profile completmentary qualities: » Focus/ divergence/ compelling tagline

Drawing Strategy Canvas1. Visual Awakening2. Visual Exploration3. Visual Strategy Fair4. Visual Communication

Visual Awakening• Don’t change strategy without resolving

different opinions• Executives like status quo; slow to make

changes• Can see need for change with value curve– Reveals weaknesses, false choices

• Bring people together to discuss views, find needed strategy

Value Curves

Value Curves

Visual Exploration

• Get managers on the ground; meet people face-to-face“A company should never outsource its eyes”

• Go after customers and non-customers– Talk to them, see them in action– I.D. complimentary goods/services for

bundling options(Kinepolis with childcare services)

• EFS surprised that relationship managers were Achilles heel– Customers wanted fast transaction

confirmations

Visual Strategy Fair• Executives consist of representatives of external

constituencies – noncustomers, customers of competitors and demanding customers

• Presentations include pictures and limited to 10 minutes

• Transparent and immediate judging• Emphasis on originality and clarity of pitches• Markets have a basic set of needs and expected similar

services – customers will forgo other needs if common needs are met

Visual Strategy FairAllows value curves, shows existing strategic profileFuture strategy can be focused on: ease of use, security, accuracy and speedFour actions to create value innovation:

1) Eliminate2) Raise3) Reduce4) Create

Visual CommunicationCreated after future strategy is setCommunicate strategy in an easily understood mannerManagers walk through the picture, explain what is eliminated, reduced, raised and created to produce a Blue OceanEmployees will become motivated when there is a clear, visual communicationNew picture becomes reference point for investment decisions, only ideas that help move the company forward from old to new value curves are allowed

Visualizing Strategy at the Corporate Level

• Using the Strategy Canvas• Using the Pioneer-Migrator-

Settler Map• Overcoming the Limitations of

Strategic Planning

Using the Strategy Canvas• Samsung Electronics of Korea • Value Innovation Program –Recorded progress from VIP

program• Ask yourself some questions–Draw then share strategy canvases

Using the Pioneer-Migrator-Settler Map

• Companies that create blue oceans are pioneers– Offer unprecedented value– Powerful sources of profitable growth

• Settlers businesses whose value curves conform– “Me too” businesses– Stuck in the red

• Migrators extend the industry’s curve– more for less– Improved value

PMS Map• Settlers– Low growth trajectory– Fallen into a trap• Competitive benchmarking• Imitation• Intense price competition

• Migrators– Reasonable growth– Risks being marginalized

Overcoming the Limitations of Strategic Planning

• Strategic planning core activity of strategy• Managers believe:– Strategic planning collective wisdom– Building top down or bottom up– Conversational– Building the big picture

• Actually:– Creative component– Motivational– Viable alternatives

Current Event• Coca Cola has over 100 products in almost every country

around the world• Pepsi, Snapple, and Monster all major competitors of Coca Cola• What are Coca Cola plans for the future?

Discussion Questions• 1. Do you think Coca Cola is a

Pioneer, Migrator, or Settler? • 2. Can you think of any

companies that failed because they were “Settlers”?