Blue Ocean Strategy

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blue ocean strategy ®

Go where profits and growth are – and where the competition isn’t © Kim & Mauborgne R esearching the history of

blue ocean creation

• Data: 150 strategic moves, more than 30
industries, over 100 years (1800‐2000)

•Variables considered: industrial, organizational and strategic Re d versus blue

Red Ocean Strategy

Compete in existing market space

Beat the competition

Exploit existing demand

Make the value‐cost trade‐off

Align the whole system of a company’s activities with its strategic choice of differentiation or low cost Blue Ocean Strategy

Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value‐cost trade‐off Align the whole system of a company’s activities in pursuit of differentiation and low cost Six paths to

blue ocean strategy


The six conventional boundaries of competition


Premium wines

[yellow tail]

Budget wines


|Reduce |
|Which factors should be reduced well |
|below the industry’s standard? |
| | | | | |

A New

| | | | | |
|Raise |
|Which factors should be raised well above|
|the industry’s standard? |
Minimizing risks & maximizing opportunities in formulation & executing blue ocean creation

Formulation Principles Formulation Risks

Reconstruct market boundaries

Focus on the big picture, not the numbers

Reach beyond existing demand

Get the strategic sequence right
Search Risk

Planning Risk

Scale Risk

Business Model Risk

Execution Principles Execution Risks

Overcome key organizational hurdles

Build execution into strategy
Organizational Risk

Management Risk
blue ocean strategy ®

How to create uncontested market space and
make the competition irrelevant. © Kim & Mauborgne -----------------------














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