value curve blue ocean strategy
But many companies have done their homework and succeeded thanks to this strategy. Blue ocean strategy is all about customers and non-customers. Blue Ocean Strategy Collier Physical Therapy and Services Factors of Competition Scoring Your Current Value Curve. Value innovation is the backbone of a Blue Ocean Strategy. Hereâs an example value curve for just the Moto X smartphone: Below is a summarized strategy canvas for the smartphone example: Conclusion . The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. Consider targeting the end-userâs pain points, especially if theyâve traditionally been ignored, and creating a new product with a different value curve. Introducing The Blue Ocean Strategy. divergence â a companyâs strategy is a me-too, with no reason to stand apart in the marketplace. Blue Ocean Strategy vs. Red Ocean Strategy. This will embed the document as an interactive player similar to how YouTube videos are embedded everywhere on the web. W. Chan Kim and Rene Mauborgne (2005) presented a new strategy named blue ocean strategy. Blue Ocean Strategy enables a fundamental transformation in mindset. The Value Curve template is inspired by the Blue Ocean Strategy. Typical stages of a Value Innovation project 23/Dec 7/Feb 31/Apr Phase 1: Phase 2: Phase 3: Phase 4: Visual Awakening Visual Exploration Visual Strategy Fair Visual Commn. Clouderaâs new value curve epitomizes three characteristics of a good blue ocean strategy; focus as reflected in higher offering levels, divergence in the shape of the value curve relative to that of competitors, and a compelling tagline reflected in new factors created. LESSON 3. 2) understanding the blue ocean strategy, 3) how to apply the blue ocean strategy to your business, and 4) examples. Using a simple line graph, the y axis (vertical) represents the common relative scale, usually a 5 or 10 point range. focus - its cost structure will tend to be high and business model complex will lack implementation and execution. With Blue Ocean strategy, innovators are able to systematically think through ways to create value for ⦠It eventually creates new value/demand for consumers and thereby, expands the chances of growth potential. Hereâs a neat little summary for each strategy: After having dealt with the Blue Ocean metaphor as well as having clarified the concept of Value Innovation, the Chapter moves on by describing the basic analytical tools and frameworks that characterize the Blue Ocean Strategy. If companyâs value curve. The Value Curve Model visualises products comparisons which, in an increasingly competitive environment, helps Product Managers face the challenge of finding ways to differentiate their Products Click To Tweet Value Curve Case Study : ING Direct The Blue Ocean Strategy is an approach to innovate value and create new market space, tap into unsatisfied consumer demand, and find uncontested market space. The strategy canvas is both the start and the end point of a Blue Ocean Strategy formulation. We continue to analyze the sources of competitive success or economic profitability in a market/industry This session sits on the boundary of competitive advantage and market economics or industry attractiveness as explanatory factors for competitive success or economic profitability it does so by illustrating how ⦠(from Kim & Marborgne) See how different the Red Ocean and Blue Ocean Value Curves are? Title: Strategy Canvas Excel Template - Blue Ocean Strategy Subject: Designing a Strategy Canvas Author: Dr. Alexander Osterwalder Keywords: Implementing the blue ocean strategy is, simply put, a gargantuan task. The analysis begins by creating a Strategy Canvas where a common relative scale is used to plot values of each key quality characteristic (KQC). And the cost-value trade-off is broken. This is termed âvalue innovation.â You have a framework to test ideas. The Blue Ocean Strategy is a framework first introduced by W. Chan Kim and Renee Mauborgne in a book bearing the same name. Importantly, value innovation defies one of the most commonly accepted dogmas of competition-based strategy: the value-cost trade-off. Understanding the Value Curve Model. These represent both the old (Red Ocean) and new (Blue Ocean) value propositions to the customers. Below is a value curve which helps to create an uncontested market place (blue ocean). LOCKED. Cannibalization: The new service offering strategy would have a different value curve to the existing one, impeding continuation and growth of the existing portfolio. 1.1 Introduction To swim clear of the bloody competition towards more profitable growth, one needs to be able to create new demand while breaking the traditional value-cost trade-off. ⦠Pharma concentrates primarily on influencing doctors, the decision-makers who write prescriptions. Blue Ocean Strategy â Approaches of Blue Ocean Strategy . Hence, their new Value Curve was totally different from all the restâ¦which is precisely what is desired in creating a winning strategy for a brighter future. In this summary, weâll give a synopsis of the key concepts, tools and tips from the book. Blue Ocean Strategy frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index. It is then transformed via the eliminate-reduce-raise-create actions framework. D. A blue ocean strategy differs from a low-cost strategy in that A. the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value. Learn to create a new value curve using the eliminate-reduce-raise-create grid. The approach of blue ocean strategy is as follows: i. The curve lists the common factors competitors all compete on (ranking these from low to high importance): Source - Adapted from Blue Ocean Strategy. The organizational challenges when applying Blue Ocean Strategy in a leading industry incumbent player are two fold: 1. BLUE OCEAN STRATEGY. Lacks . Finally, the Blue Ocean Paradox is discussed. Once you have this information, now you can recreate your value curve on the strategy canvas. VALUE INNOVATION THROUGH BLUE OCEAN STRATEGY how should we play? These questions are, does the plan have a focus, does the new value curve (appendix A) from the Strategy canvas diverge from the market competition, and finally, is ⦠The value curve of blue ocean strategy always stands apart from the competitors. As a result, competition becomes irrelevant because the rules of the game are yet to be set. Divergence helps differentiating company from the industryâs average profile and helps them to achieve a leap in value on strategy canvas, such as low-cost business model. Value innovation is the alliance of innovation with price, utility, and cost positions. Besides, it has two main functions: (1) position of KD within the industry. In this essay I will critically analyze and evaluate the Blue Ocean Strategy; its value to small-to-medium size enterprises and how it can create a demand in todayâs hyper-competitive market space.I will also discuss the key elements required to develop the Blue Ocean Strategy. In this article, we will look at 1) what is a blue ocean strategy? Copy-paste the HTML code to your website. A critical evaluation of Blue Ocean Strategy and its value to SMEs. The fourth tool is merely three questions to ensure that the plan is truly a blue ocean strategy. The Strategy Canvas and given the weight of each order, hence they may It is a diagnosis of action framework for building a Blue visually illustrate a value curve to see the relative Ocean strategy. A. value curve B. value canvas C. strategy curve D. strategy canvas. Lacks a . Value Curve Analysis enables organizations to assess their service or product offering against that of a competitor or industry norm. A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created.. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. The concept was expanded in their 2005 book Blue Ocean Strategy, where they argued that a business should focus on creating a new product and subsequent market with no competition. The Blue Ocean Strategy argues that consumers donât have to choose between value and affordability. An initial value curve depicts where the industry competes on and invests in. Blue Ocean Strategy Examples. This information allows you to see where competitors are heavily investing and how different products are being positioned to customers. If a company can identify what consumers currently value and then rethink how to provide that value, differentiation and low cost can both be achieved. The Value Curve Model was developed by authors W. Chan Kim and Renee Mauborgne in 1997. Value innovation is a new way of thinking about and executing strategy that results in the creation of a blue ocean and a break from the competition. THE THREE HALLMARKS OF A GOOD BLUE OCEAN STRATEGY. It was expanded upon in their best-selling 2005 book, âBlue Ocean Strategyâ. Master Blue Ocean Strategyâcreate effective business strategies & beat the competition through target costing, value curves, buyer utility & more! Firstly, it shows the current competitive landscape in the marketplace as it exists today. ... âAs isâ Value curve and Curves based finalise on current strategy blueprints 24 25. WHAT IS THE BLUE OCEAN STRATEGY The term blue ocean was coined by two professors W.Chan Kim and Renee Mauborgne in their book titled 'Blue Ocean Strategy: How to Create Uncontested Market Space and ⦠Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, Blue Ocean Strategy addresses this question and provides a systematic approach to drafting and implementing your own Blue Ocean Strategy. The crux of the strategy is a value-cost trade off. Lacks . The Value Curve, from Blue Ocean Strategy, has two purposes. Reactively formed strategies tries to keep up with the competition, thus loosing uniqueness. A Blue Ocean Strategy. Blue ocean strategy makes competition irrelevant but tries to create and capture a new market. If desired, senior management should deliberately steer strategy towards blue ocean to avoid red ocean strategy and weakening all the players in the existing marketplace.
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