Six Path Analysis Flashcards
What does the Six Path Analysis urge?
The model urges managers and entrepreneurs to avoid head-to-head competition, suggesting six paths through which new market spaces can be created.
What is a Red Ocean
Current market spaces dominated by strong incumbent competitors. Red oceans tend to be harnessed by strong ‘industry recipes’: a dominant way of doing business from which it seems impossible to break away.
What is a Blue Ocean?
Uncontested market spaces where competition does not yet exist. Because industry recipes are not yet crystalized in such spaces, entrepreneurial ventures and migrant firms enjoy much greater freedom of movement.
How to get out of red oceans and into blue ones?
The concept of value innovation is central in this process.
What is the idea of value innovation for blue oceans?
Challenges the ‘generic strategies’ idea that firm must either configure their value chains for low cost, or for competitive differentiation.
What questions should we ask about the cost-side of value innovation
Which factors can be eliminated that the industry simply takes for granted?
Which factors can be reduced to well below the industry’s standard?
What questions should we ask about the buyer value side of value innovation
Which factors can be raised well above the industry’s standard?
What factors can be created that the industry has never offered?
What are the six paths
Industry
Strategic group
Buyer group
Scope of product
Functional-emotional orientation
Time
