Insights from ‘Blue Ocean Strategy’ by W. Chan Kim and Renee Mauborgne

Question 1

What is the primary principle of the Blue Ocean Strategy?

Answer 1

The primary principle is to stop competing for market share and focus on creating new value to expand the market, making competition irrelevant.

Question 2

True or False: Competing for market share in an established industry is more profitable than creating a new product category.

Answer 2

False

Question 3

How much of the combined profits did the 16 ‘Blue Ocean’ businesses earn out of the 108 businesses studied?

Answer 3

0.61

Question 4

Fill in the blank: Blue Ocean Strategy encourages businesses to focus on ______ innovation rather than competition.

Answer 4

value

Question 5

Who are considered ‘noncustomers’ in the context of the Blue Ocean Strategy?

Answer 5

Noncustomers are individuals who are infrequent customers or are on the edge of the market, often avoiding or unfamiliar with the current market offerings.

Question 6

What is ‘Value Innovation’ in the Blue Ocean Strategy?

Answer 6

Value Innovation is creating an innovative product at a low price that attracts a new group of customers, often outside the existing market.

Question 7

Why did Casella Wines eliminate the wine aging process in their strategy?

Answer 7

To reduce costs and simplify the taste of their wine, making it less intimidating for non-wine drinkers.

Question 8

True or False: The creators of blue oceans use competition as a benchmark to measure their success.

Answer 8

False

Question 9

Which industry did Casella Wines look to for inspiration to make their product more approachable?

Answer 9

The beer industry

Question 10

What does it mean to ‘Raise’ in the context of the four action framework in Blue Ocean Strategy?

Answer 10

‘Raise’ means to elevate standards that increase buyer value and create new demand, as Casella Wines did by improving the drinkability of their wine.

Question 11

Describe one way Casella Wines ‘Created’ a new experience for non-wine drinkers.

Answer 11

They created a simple, inviting label similar to a beer bottle label, removing pretentious elements to make the wine seem fun and approachable.

Question 12

What are the four actions in the Blue Ocean ‘value innovation’ framework?

Answer 12

Eliminate, Reduce, Raise, and Create

Question 13

How did Casella Wines differentiate their wine label from traditional wine labels?

Answer 13

They used a simple, inviting design without complex language or age details, making it similar to beer labels.

Question 14

What market did [yellow tail] wines successfully target to achieve rapid growth?

Answer 14

They targeted non-wine drinkers, including beer and cocktail drinkers.

Question 15

True or False: Casella Wines maintained a large inventory to cater to various wine preferences.

Answer 15

False

Question 16

What was the impact of Casella Wines’ Blue Ocean Strategy in the wine industry?

Answer 16

[yellow tail] became the fastest-growing brand in the U.S. and Australian wine industries and the top imported wine in the U.S., surpassing French and Italian wines.

Question 17

Application: If you wanted to apply Blue Ocean Strategy in the food industry, who might you target?

Answer 17

You might target people who typically avoid certain food types due to perceived complexity or inaccessibility, such as fast-food customers for gourmet options.

Question 18

According to Blue Ocean Strategy, what is the first step in Value Innovation?

Answer 18

The first step is selecting a target audience outside the current market, often those unfamiliar with or who avoid the market.

Question 19

Fill in the blank: By creating new value in a Blue Ocean, a business can make ______ irrelevant.

Answer 19

competition