Business Problems:

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• Business Problems
• Difficulty of continuous growth in existing
  markets
• Less competitive advantages
• The business and marketing in real practice

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• Authors
• W. Chan Kim and Renee Mauborgne

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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.

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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.

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Red 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

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Blue 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

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Key BOS Tools

• Strategy Canvass
• ERRC frameworks

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Strategy 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.

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Strategy Canvas
Blue Ocean Strategic Move
Offering Level
Industry Value curve
Competing Factors
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Strategy 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.

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Strategy Canvas
Examples Strategy Canvas of Cosmetic Industry
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Strategy Canvas
Examples Strategy Canvas of Airline Business
Meals
Lounges
Service
Hub connect
Friendly service
Frequent Fly
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Strategy Canvas
Examples Strategy Canvas of Mobile Network
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Strategy Canvas
Your Strategy Canvas
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Key BOS Tools

• Strategy Canvass
• ERRC frameworks

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Using 4 Actions to create Value Innovation
Lift buyer value and create new demand Raise and
Create
Drop the cost and structure Reduce and Eliminate
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Value Innovation
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Four 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?
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4 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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Strategy Canvas
Examples Strategy Canvas of Airline Business
Meals
Lounges
Service
Hub connect
Friendly service
Frequent Fly
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• Case Study Cirque du Solei
• Circus situation
• Slow market growth rate
• Many substitute entertainment products
• The objections from using animal entertainment

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http//www.cirquedusoleil.com/believe/en/videos/in
tro.asp
Example Case study of cirqueduesoleil
http//www.cirquedusoleil.com/en/default.asp
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• 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)

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RecommendationsStrategies from Firms
Functional Areas
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Group.. Sec..
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Six Thinking Paths of
Blue ocean strategy
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White 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.

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White 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

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White 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

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Environmental-PESTEL
MKT4725
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