Workshop on Blue Ocean Strategy

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Workshop on Blue Ocean Strategy

• Creating New Market Spaces

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• Competing in overcrowded industries is no way to
  sustain high performance.
• The real opportunity is to create blue oceans of
  uncontested market space.

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Cirque du Soleil

• Challenges
• Decreasing
• Audiences
• Increasing
• Costs

• Alternatives
• Sporting events
• TV
• Video Games

Cirque

• PESTE
• Animal rights groups
• Star performers demand
• high salaries

• Rivals
• Ringling Bros
• Barnum Bailey

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Cirque Revenues up 22 times in 10 years-how?

• Cirque created uncontested market space that made
  competition irrelevant
• New customer focus adults corporate clients-
  pull them from theatre, opera , ballet

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(Blue)
(Red)
(Red)
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Raise
Create
Eliminate
Reduce
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Four Action Framework The Case of Cirque du
Soleil (A Circus Company)
Reduce
Eliminate

• Star performers
• Animal shows
• Aisle concession sales
• Multiple show arenas

• Thrill and danger

Raise
Create

• Theme
• Refined environment
• Multiple productions
• Artistic music and dance

• Unique venue

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Business Universe
Red Ocean
Blue Ocean
New Industry Ex eBay On line auction
From red ocean By altering boundaries
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• Look back 100 years
• These were not there
• Automobiles
• Music recording
• Aviation
• Petrochemicals
• Pharmaceuticals

• Look back 30 years..
• These did not exist
• Mutual funds
• Cell phones
• Home videos
• Bio technology

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People assume that everything that is going to be
invented must have been invented already. But it
hasnt.

• If you believe human wants and needs are
  infinite, then there are infinite industries to
  be created, infinite businesses to be started,
  and the only limiting factor is human imagination.

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Research Findings

• Blue oceans are not about technology innovation
• Incumbents often create blue oceans and usually
  within their core businesses.
• Company and industry are wrong units of analysis
• Creating blue oceans builds brands

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Red vs Blue Ocean The Imperatives/ Defining
Characteristics
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Red vs Blue Ocean The Imperatives/ contd
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Barriers to Imitation

• Creators of Blue Ocean enjoy benefits without
  challenges for 10-15 years

• Examples
• Cirque du Soleil
• Home Depot
• Federal Express
• Southwest Airlines
• CNN

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Blue and Red Oceans co-exist. Companies must
understand the strategic logic of both types
of Oceans.