Katharina Bost c

7/29/2019 Katharina Bost c

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Blue Ocean StrategyHow to create

uncontested market spaceand make the competition irrelevant

Katharina BOST 12/06/2006


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About the Founders: Chan & Renee

W. Chan Kim

The Boston Consulting Group

Bruce D. Henderson Chair

Professor of Strategy and

International Management

Rene Mauborgne

The INSEAD Distinguished

Fellow and Professor of Strategy

and International Management


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Two worlds


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Two worlds

Red Ocean Strategy Blue Ocean Strategy

Compete in existing market

space.

Create uncontested market

space.

Beat the competition. Make the competition

irrelevant.

Exploit existing demand. Create and capture new

demand.

Make the value-cost trade-off. Break the value-cost trade-off.

Align the whole system of a

strategic firm's activities with

its choice ofdifferentiation or

low cost.

Align the whole system of a

firm's activities in pursuit of

differentiation andlow cost.

VALUE INNOVATION


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The rising Imperative of Creating Blue Oceans

supply exceeds demand

globalization

accelerated commoditization of products and services increasing price wars

shrinking profit margins

brands are becoming more similarselect based on price

...


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BOS Logic: The Core Principles

Reconstruct Market

Boundaries

overcome believes.

Reach beyond

existing Demand

go for uncontested space.

Get the strategic

sequence right

value [innovation] first.

VI

VI

COST

VALUE


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BOS Logic: Reconstruct market boundaries

IndustryFocuses on rivals within its

industry

Strategic GroupFocuses on competitive position

within strategic group

Buyer GroupFocuses on better serving the

buyer group

Scope of Product and

Service Offerings

Focuses on maximizing the value

of product and service offerings

within the bounds of its industry

Functional-emotional

Orientation of an

Industry

Focuses on improving price-

performance with the functional-

emotional orientation of this

industry

Time/Trends Focuses on adapting to externaltrends as they occur

Looks across alternative

industries

Looks across strategic groups

within its industry

Redefines the buyer group of the

industry

Looks across to complementary

product and service offerings that

go beyond the bounds of its

industry

Rethinks the functional-emotional

orientation of its industry

Participation in shaping external

trends over time

Boundaries of

Competition

Head-to-Head

CompetitionCreating

New Market Space


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Reconstruct Market

Boundaries

overcome believes.

Reach beyond

existing Demand

go for uncontested space.Get the strategic

sequence right


VIVI

COST

VALUE


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BOS Logic: Reach beyond existing demand

Core Customer Noncostumer

Soon-to-be-NC Refusing Customer


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Reconstruct Market

Boundaries

overcome believes.

Reach beyond

existing Demand

go for uncontested space.

Get the strategic

sequence right


VIVI

COST

VALUE


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BOS Logic: Get the Strategic Sequence right

Buyer utility

Is there exceptional buyer

utility in your business idea?

Adoption

What are the adoption hurdles in

actualizing your business idea?

Are you addressing them up

front?

Price

Is your price easily accessible to

the mass of buyers?

Cost

Can you attain your cost target to

profit at your strategic price?

A commercially viable Blue Ocean Strategy

YES

YES

YES

YES

No Rethink

No Rethink

No Rethink

No Rethink


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The case of Accor's Formule 1

The value curve of Formule 1 in the French Low Budget Hotel Industry


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References

W. Chan Kim, Rene Mauborgne, Blue Ocean Strategy, 2005,

Havard Business School Press.

http://www.blueoceanstrategy.com

HANDELSBLATT, Donnerstag, 06. Oktober 2005,

Mit Nichtkunden neue Mrkte finden.

http://www.hotelformule1.com
http://www.blueoceanstrategy.com/http://www.hotelformule1.com/http://www.hotelformule1.com/http://www.blueoceanstrategy.com/


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Thank you for your

attention!!!

Katharina Bost c

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