Blue Ocean

Question 1

Blue Ocean strategy suggests four strategic actions that an organisation should consider when seeking to differentiate its offerings from competitors. Choosing an appropriate example to illustrate your answer, and using a strategy canvas, show how the application of the framework might help create uncontested space in a competitive market.

Answer 1

Main principle is that companies can succeed, not by battling competitors, but by creating uncontested market space.

Question 2

Concepts of blue ocean strategy

Answer 2

Kim and Mauborgne

Don’t compete. Find a blue ocean and define the rules of the market.

Four actions framework - what to reduce, eliminate, increase and create?

Strategy canvas - capture the current state of play, see on what factors the industry competes on. Create your own value curve

Question 3

Red oceans

Answer 3

• All the industries in existence today. - Boundaries are defined and accepted, and the competitive rules of the game are known. - Companies try and outperform rivals, it’s crowded with high competitive pressure (downward profits).

Question 4

Blue oceans

Answer 4

• All the industries not in existence today. - Unknown market space, rules of the game are waiting to be set.

Question 5

Value Innovation

Answer 5

Simultaneous pursuit of differentiation and low cost. The aim of value innovation is not to compete but to make the competition irrelevant by changing the playing field of strategy. Opening up uncontested market space. Four actions framework can be used to determine value innovation. Challenges porter’s assertion that success businesses are either low-cost providers or niche players. e.g. Dyson

Question 6

Four Actions Framework

Answer 6

Reduce - which factors should be reduced well below industry standard?

Eliminate - which factors that the industry takes for granted should be eliminated?

Raise - which factos should be raised well above industry standard?

Create - which factors should be created that have never been offered before?

Question 7

Salesforce example

Answer 7

Eliminate

• software requirement
• infrastructure investment
• maintenance costs

Reduce

• purchase cycle
• set-up time
• high-end product features

Raise

• ease of deployment
• usability
• reliability

Create

• subscription
• test before purchase
• ubiquitous access

Question 8

What is a strategy canvas?

Answer 8

Horizontal axis - range of factors that the industry competes on and invests in.

Vertical axis - offering level that buyers recieve.

Allows you to see the factors on which the industry are currently competing. Allows you to reorient focus from competitors to alternatives and define new value curve.

e.g. salesforce

Question 9

What are the criticsms of BOS?

Answer 9

• Lack of real case examples
• Descriptive rather than prescriptive - looks at history or successful innovations and then interprets them through the BOS lense