Blue ocean strategy formulation the strategy canvas. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. The strategy canvas the strategy canvas is both a diagnostic and an action framework for building a. The expanded edition of blue ocean strategy, is metaphorical, witty, and almost biblical in its commentary of the bloody waters of competitive red ocean market forces. Next to it the blue ocean strategy was selected as one of. How to create uncontested market space and make the competition irrelevant unabridged by kim, w chan, mauborgne, renee isbn. With the aid of the four actions framework figure 4 and the. The four actions framework and the eliminatereduceraisecreate grid are almost a straightforward stepbystep strategy which offers an answer to all four parts of the marketing mix. The blue ocean strategy tools four actions framework. Chen, information systems theory and practices blue ocean strategy.
Chan kim and renee mauborgne 2006 blue ocean strategy has been described as a must read for all business students. By creating this plot, you can find imbalances in your strategy, such as only raising and creating which leads to overengineering and trying to be the best or only eliminating and reducing which leads to mere price competition. Blue ocean strategy usually talks about creating a blue ocean for your business and creating barriers for other businesses to imitate. I wish i could say my own pursuit of enlightenment led me to chan kim and renee mauborgnes masterpiece on embracing and leveraging difference. A lot has been written about it and i would have said practically everything had been said about it until i looked up the book on amazon to see the current price. Effective blue ocean strategy should be about risk minimization and not risk taking. The premise of the book is that companies can succeed by creating. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to. The six paths framework in formulating blue ocean strategy are 1 look across alternative industries, 2 look across strategic groups within industry, 3look across buyer groups, 4 look across complementary product and service offerings, 5look across the functionalemotional orientation of an industry and 5look across time to shape trends. The four actions framework aids in eliminating the tradeoff between differentiation and low cost within a company. The four pillars of blue ocean leadership insead knowledge. Please identify the value innovation that you will be creating to move your business into a blue ocean market space. Blue ocean strategy is a book published in 2005 and written by w.
The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. Build your blue ocean strategy with the four actions framework. What is blue ocean strategy and how can you create one. The six paths framework in formulating blue ocean strategy. A fouraction framework for blueocean innovation the. Blue ocean strategy, create new markets and leave the competition behind. In a blue ocean you change the playing field of strategy.
Shortform has the worlds best summaries of books you should be reading. Analysis plandata usedkey assumptions analysis plan. Creating barriers in the value proposition, people and profit. It is used to plot how the current competitors compete in a market space, what factors they compete on and how your company and the competition scores on each key factor. Strategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand. Pdf blue ocean strategy as a tool for improving a companys. Your productservice must raise and create customer value gain and simultaneously reduce and eliminate features or services that are less valued, or not valued at all, the customer pain.
Boii blue ocean idea index terms framework a framework is structure that is a real or conceptual, with the purpose to. Drawing on more than a decade of new work, kim and mauborgne show you how to move beyond competing, inspire. Everyday low prices and free delivery on eligible orders. Blue ocean strategy formulation the four principles of strategy formation this blog article is a summary of the book by w. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. To join the free indie business book club, click here. Together, they wrote a bestselling book blue ocean strategy. Blue ocean strategies a summary blue ocean strategy is a business strategy book first published in 2005 and. The blue ocean strategy book itself offers a variety of tools and frameworks for a. Blue ocean strategy on jet blue case study by neil k. Four actions framework of blue ocean applied to jet blue. The subscription model removed costs associated with low value activities in purchasing and deploying the service, allowing them to focus on strategic activities with a greater impact on their business customers could test the application in a single work group or division first, then extend the use. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w.
How to create uncontested market space and make the competition irrelevant, it seemed too good to be true. There are four things you would learn specifically alignment barriers. A blue ocean strategy is a tool used to gaining a competitive advantage, it is a strategy used to create a uncontested market space and make the competition irrelevant. The four actions framework guide your student life with this. In a blue ocean because of the uniqueness of your offering you are able to service your customers in uncontested at least for now space. The blue ocean strategy offers users a framework for creating uncontested market. The four actions framework is used to help create value innovation and break.
They are the authors of blue ocean strategy, which has sold over 3. Rank yourself and each competitor for each of the competitive factors creating a strategy curve. Blue ocean strategy has challenged business leaders to. A crucial tool in this odyssey is the fouractions framework. Formulating blue ocean strategy 3reconstruct market boundaries 47 4focus on the big picture, not the numbers 81 5reach beyond existing demand 101 6 get the strategic sequence right 117 fmkim. Four actions framework blue ocean strategy shortform blog. To break the tradeoff between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry. The blue ocean strategy four actions framework also called eliminate reduce raise create grid errc grid is a complementary tool to the strategy canvas. The four actions framework is used to help create value innovation and break the valuecost trade. It is being published in a recordbreaking 44 languages.
It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs. The strategy canvas outlined in the book is basically a tool to visually show how a company will or has created a blue ocean strategy. Four actions framework template blue ocean framework miro. Apply the fouraction framework of eliminate, raise, reduce, and create.
Bos four actions framework errc grid innovating now. Remember what the product that company delivers is. The fouractions frameworkon blue ocean strategy to reduce, create, raise and eliminate industry practices to create a. Every new product or service on the market is obviously there to stay, not all will be able to handle the bloody competition and with time the underdogs will fade out of the market. Blue ocean strategy 1creating blue oceans 3 2 analytical tools and frameworks 23 part two. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Blue ocean strategy value innovation strategy canvas four actions. Reviewing the blue ocean strategy universiteit twente. This tool is the central diagnostic and action framework for building a compelling blue ocean strategy. Four actions framework of blue ocean applied to jet blue 1. Summary of the first four chapters of the international bestseller blue ocean strategy. Value innovation strategy competes in an uncontested market space. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. View notes blue ocean strategies summary from mgmt 430 at university of washington.
The fundamental premise of the blue ocean strategy is that as opposed to continuing to compete in the red ocean, you should try to find new space in which to sell your goods and services. Professor of mis school of business administration gonzaga university spokane, wa 99258 usa. The 4 actions framework is a core strategic tool used in blue ocean strategy. The structure can be created or recreated by the steps taken by players in the market. Blue ocean strategys four actions framework poses four central questions that let companies break the valuecost tradeoff and create a blue ocean. Made by group d of the minor global trendwatching 2015. Blue ocean strategy formulation the four principles of. First and foremost on their list is a tool used to break out of competition and make competition irrelevant called the strategy canvas. Use our free blue ocean 4 actions framework template to create, collaborate on. The four actions framework and errc grid tweet after you define the three tiers of non customers, the idea is that you poll these noncustomers and find out what it would take to purchase your product or service. It provides guidelines to identify new competing factors and therefore be more creative during later phases of innovation and design a new buyer value curve. Achieved via the delivery of features that have a highest marginal benefit to customer needs.
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