Blue Ocean

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Blue Ocean Strategy
How to Create Uncontested Market Space and Make the Competition Irrelevant

Facilitators : Yip Khai Biau (ymike27@hotmail.com) & Lieu Yoke Sun Group/Presentation Title Agilent Restricted Date ##, 200X

Blue Ocean Strategy (BOS)
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Introduction to BOS BOS Tools : Strategy Canvas & E.R.R.C. Awakening : As-Is Strategy Canvas Exploration : Reconstruct Market Boundaries Strategizing : To-Be Strategy Canvas Actualization : Identify actions to actualize the strategies Conclusion Facilitators : Yip Khai Biau (ymike27@hotmail.com) & Lieu Yoke Sun All Rights Reserved – KB Yip/YS Lieu

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Objectives


Develop understanding of Blue Ocean Tool Sets and how to apply them effectively  

Strategy Canvas ERRC



Perform As-Is Analysis to Compare Current Strategy of XYZ vs Competitors Explore Pathways to Breakaway from Market Boundaries to look for Bigger Playing Field Brainstorm and Agree on the To-Be Strategy for XYZ





All Rights Reserved – KB Yip/YS Lieu

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Introduction to Blue Ocean Strategy
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History & Background Defining Red & Blue Ocean Six Principles of BOS Reach Beyond Existing Demand Value Innovation

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All Rights Reserved – KB Yip/YS Lieu

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History & Background
• Authored by W. Chan Kim and Renee Mauborgne in 2005. • Based on a study of 150 strategic moves spanning more than 100 years and 30 industries. • BOS is the simultaneous pursuit of differentiation and low cost. • The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant. • BOS offers systematic and reproducible methodologies and processes in pursuit of innovation by both new and existing firms. • BOS frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication. All Rights Reserved – KB Yip/YS Lieu

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Defining Red and Blue Ocean What’s Red, What’s Blue?
Red Ocean Strategy
•• Compete in existing market space Compete in existing market space •• Beat the competition Beat the competition •• Exploit existing demand Exploit existing demand •• Make the value-cost trade off Make the value-cost trade off •• Align strategy choice of Align strategy choice of differentiation or low cost differentiation or low cost

Blue Ocean Strategy
•• Create uncontested market space Create uncontested market space •• Make the competition irrelevant Make the competition irrelevant •• Create & capture new demand Create & capture new demand •• Break the value- cost trade off Break the value- cost trade off •• Simultaneous pursuit strategy of Simultaneous pursuit strategy of differentiation and low cost differentiation and low cost

All Rights Reserved – KB Yip/YS Lieu

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Examples of Red and Blue Ocean

All Rights Reserved – KB Yip/YS Lieu

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Six Principles of Blue Ocean Strategy
Formulation Principles 1. Reach beyond existing demand 2. Reconstruct market boundaries 3. Focus on the big picture, not the numbers 4. Get the strategic sequence right Execution Principles 5. Overcome key organizational hurdles 6. Build execution into strategy

All Rights Reserved – KB Yip/YS Lieu

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Reach Beyond Existing Demand


First Tier: “Soon-to-be” noncustomers who are on the edge of your market, waiting to jump ship

Second First Tier Tier

Third Tier 

Yourlu B Market

cean eO

Second Tier: “Refusing noncustomers who consciously choose against your market.



Third Tier: “Unexplored” non customers who are in markets distant from yours.

Blue Ocean – Go for the Largest Catchment of Non-Customers All Rights Reserved – KB Yip/YS Lieu
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Example – [yellow tail]

Traditional Wine : • An elite, refined image in packaging with heavy use of wine terminology. • Aging quality. •...
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