The Execution of a Blue Ocean Strategy

Topics: Airline, Blue Ocean Strategy, Avianca Pages: 7 (2100 words) Published: October 30, 2013

The Execution of a Blue Ocean Strategy
American Military University
Professor Alex Lazo

Table of Contents
Abstract……………………………………………………………………………………………3 Value Innovation…………………………………………………………………………………..3 Reconstructing Market Boundaries (Six Path Framework)……………………………………….3 Four Actions Framework…………………………………………………………………………4 Canvas Strategy…………………………………………………………………………………...5 Three Tiers of Noncustomers……………………………………………………………………. 6 Blue Ocean Strategy Sequence……………………………………………………………………6 Hurdles of Executing Blue Ocean Strategy……………………………………………………….7 Sustainment in the Blue Ocean……………………………………………………………………8 References…………………………………………………………………………………………9

Abstract
The purpose of this paper was to create a blue ocean strategy plan, by accessing the six principles of Blue Ocean Strategy. This assessment included a thorough analysis of each principle associated with creating uncontested market space, which also consisted of all factors that need to be considered in the formulation of a Blue Ocean and how these factors impact the end results.

Body

Value innovation is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players (Kim & Mauborgne, 2005). Value innovation is a key necessity in creating new market space and making the competition irrelevant. It establishes the difference between a firm swimming in the bloody waters of a red ocean, and a firm swimming in clear blue waters. For a firm to successfully transition it into a blue ocean they must first create a blue ocean strategy that reconstructs the market space and makes the competition irrelevant creating an uncontested market.

Over the decades we have seen a variety of changes in the practices of the airline industry. However, all these changes have been so minute that they do not require competitors within the industry and outside the industry to completely re-strategize to remain competitive. A primary focus of a blue ocean strategy is to reconstruct market boundaries (six paths framework), which requires assessing alternative industries, strategic groups within industries, the chain of buyers, complementary product and service offerings, functional and emotional appeal to buyers, and historical trends (Kim et al., 2005). The alternative industry is ground transportation, which includes personally owned vehicles, train stations, and charted buses. Individuals that make up the strategic groups focus on price or performance. Therefore, inelastic consumers value performance, which in this case are offerings, while elastic consumers focus more on price, paying less for more. In most cases commercial airlines do not have the option to separate their buyers from users. So they must tailor services to users, by ensuring maintenance is performed regularly to limit delays, and offer in-flight amenities for an enjoyable flight experience. Complementary items could include refreshments, blankets, and in-flight entertainment. Having an equal balance of both function and emotional appeal should always be the goal of a firm. Offering low prices with comfortable air travel tackles both appeals. Lastly, when brainstorming for a new strategy, a firm should always consider the past trends of the industry. It allows management to better understand and predict trends that could affect business plans in the future. This permits the firm to stay focused on the big picture. To stay focused on the big picture it is critical for a firm to determine what factors should be reduced, eliminated, raised, and created. This process refers to the four actions framework. It permits firms to focus on buyer value. Many companies often tend to focus on the competition instead of buyers, so they tend concentrate on services and products that are minimal in interest to buyers. If I were responsible for creating a blue ocean strategy for...

References: Body
Value innovation is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players (Kim & Mauborgne, 2005)
Kim, W. C., Mauborgne, R. (2005). Blue Ocean Strategy, How to create uncontested market space and make competition irrelevant. Harvard Business Press.
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