Title: Business Problems:
1- Business Problems
- Difficulty of continuous growth in existing
markets - Less competitive advantages
- The business and marketing in real practice
2- Authors
- W. Chan Kim and Renee Mauborgne
-
3 Definitions
- Red ocean
- Red ocean refers to a saturated market where
there is fierce competition, already crowded with
people providing the same type of services or
producing the same kind of goods.
4 Definitions
- Blue ocean
- Blue oceans are untapped and uncontested markets,
which provide little or no competition for anyone
who would dive in, since the markets are not
crowded.
5Red ocean strategy
- Compete in existing market spacecurrent
customers - Beat the competition to gain share
- Exploit existing demand
- Make the value-cost-trade-off
- Align the whole system of a firms activities
with its strategic choice of differentiation or
low cost
6Blue ocean strategy
- Create uncontested market space
- Make the competition irrelevant
- Create and capture new demand
- Break the value-cost trade off ( create value
innovation) - Align the whole system of a fir/s activities in
pursuit of differentiation and low cost
7Key BOS Tools
- Strategy Canvass
- ERRC frameworks
8Strategy Canvas
- Strategy canvas is a diagnostic tool for building
a compelling blue ocean strategy. It captures the
current state of play in the known market space. - It allows the company to understand where the
competition is currently investing and the
factors on in a product, service and delivery,
etc. that the industry competes on.
9Strategy Canvas
Blue Ocean Strategic Move
Offering Level
Industry Value curve
Competing Factors
10Strategy Canvas
- The horizontal axis is factors that the industry
competes on and invests in, - The vertical axis is offering level that buyers
receive across these key competing factors.
11Strategy Canvas
Examples Strategy Canvas of Cosmetic Industry
12Strategy Canvas
Examples Strategy Canvas of Airline Business
Meals
Lounges
Service
Hub connect
Friendly service
Frequent Fly
13Strategy Canvas
Examples Strategy Canvas of Mobile Network
14Strategy Canvas
Your Strategy Canvas
15Key BOS Tools
- Strategy Canvass
- ERRC frameworks
16Using 4 Actions to create Value Innovation
Lift buyer value and create new demand Raise and
Create
Drop the cost and structure Reduce and Eliminate
17Value Innovation
18Four Actions Framework (ERRC)
Reduce Which factors should be reduced well below
the industrys Standard?
A New Value Curve
Create Which factors should be created that
the industry has never offer?
Eliminate Which of the factors that the industry
takes for granted should be eliminated?
Raise Which factors should be raised well
above The industrys standard?
194 actions (Strategies) to Blue Ocean
- Reduce factors well below the industrys standard
to avoid the mistake of over delivering in order
to beat the competition. - Eliminate factors that the industry takes fro
granted but adds no perceived value to customers. - Create new sources of value that the industry has
never offered - Raise factors well above the industrys standard
so your customer wont have to make compromises
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21Strategy Canvas
Examples Strategy Canvas of Airline Business
Meals
Lounges
Service
Hub connect
Friendly service
Frequent Fly
22- Case Study Cirque du Solei
- Circus situation
- Slow market growth rate
- Many substitute entertainment products
- The objections from using animal entertainment
23http//www.cirquedusoleil.com/believe/en/videos/in
tro.asp
Example Case study of cirqueduesoleil
http//www.cirquedusoleil.com/en/default.asp
24- Red Ocean Strategy from
- Other Circus
- Benchmarking one another
- Maximizing share of shrinking demand
- Secure more famous clowns and lion tamers
- Raised cost structure without raising revenues
- Blue Ocean Strategy from
- Cirque de Solei
- Fun and thrill of circus
- Intellectual sophistication and artistic
richness of the theater - Breaking the boundaries of theater and circus
- Attract both Circus customers and non-customers
(adult theater customers)
25RecommendationsStrategies from Firms
Functional Areas
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30Group.. Sec..
31Six Thinking Paths of
Blue ocean strategy
32White ocean strategy
- Morality, culture, ethics and religion are used
as the core components in doing business. - The businesses have to build themselves in being
close and corporate with society to be able to
run the business in the modern world.
33White ocean strategy
- The strategies can help solve the problem such as
global warming, child problem. - Marketers can apply White Ocean Strategy in
those projects or businesses in order to maintain
long-term relationship
34White ocean strategy
- Corporate social responsibility
- It is long-term project that link with white
ocean strategy. It include during project and
outcome. - Project link with social, environment and
consumer
35Environmental-PESTEL
MKT4725
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