Finals_9 BLUE OCEAN STRATEGY BY R. MAUBORGNE AND W.C. KIM Flashcards
(24 cards)
Industry boundaries are defined and accepted, and
competitive rules of the game are known.
RED OCEAN
Defined by untapped market space, demand creation and
the opportunity for highly profitable growth.
BLUE OCEAN
The cornerstone of blue ocean strategy. Instead of
focusing on beating the competition, the focus is on
making the competition irrelevant by creating a leap in
value for buyers and company.
VALUE INNOVATION
rd largest wine industry in the world, fastest growing
imported wine in the history of USA industry.
CASELLA WINES
Instead of offering wine, Casella developed _____, a
social drink accessible to everyone. It did not steal sales
from competitors but created a new market.
yellowtail
4 ACTIONS TO CREATE
A BLUE OCEAN
1. Reduce
2. Create
3. Raise
4. Eliminate
Companies compete not only with other companies in
their own industry but also with companies in those
other industries that produce alternative products or
services.
ALTERNATIVE
INDUSTRY
COMPETITION
Groups of companies within an industry that pursue a
similar strategy.
STRATEGIC GROUP
Directly or indirectly involved in the buying decision as
purchasers may differ from actual users.
CHAIN OF BUYERS
This visualizes a company’s current strategic
competition in its marketplace.
STRATEGY CANVAS
Comparing the business with competitors by drawing
“as is” strategy canvas and see where the strategy needs
to change.
VISUAL AWAKENING
Going into the field to explore the six paths, observing
distinctive advantages, and seeing which factors should
be eliminated, created or changed.
VISUAL EXPLORATION
Drawing the “to be” strategy canvas, getting feedback on
alternative strategy canvas, and using the feedback to
build the best “to be” strategy.
VISUAL STRATEGY
FAIR
Distributing the before-and-after strategy and supporting
moves that allow the company to close gaps in order to
actualize new strategy.
VISUAL
COMMUNICATION
These maps help visualize, plan and predict a company’s
future growth and profit.
PIONEER-MIGRATOR-
SETTLER MAP (PMS)
Soon-to-be customers who occasionally use industry
offerings but are unsatisfied.
FIRST-TIER
NONCUSTOMERS
Refusing customers who actively avoid and dislike the
industry’s current offerings.
SECOND-TIER
NONCUSTOMERS
Unexplored customers who have never considered the
industry because they feel it is irrelevant to them.
THIRD-TIER
NONCUSTOMERS
STRATEGIC SEQUENCE OF BLUE OCEAN STRATEGY
Utility > Price > Cost > Adoption
This builds on the rarely exploited corporate reality that
in every organization, there are people, acts, and
activities that exercise a disproportionate influence on
performance.
TIPPINT POINT
LEADERSHIP
The managerial expression of the procedural justice
theory.
FAIR PROCESS
When individuals feel recognized for their intellectual
worth, they are willing to share their knowledge.
INTELLECTUAL AND
EMOTIONAL
RECOGNITION
THEORY
3E PRINCIPLES OF
FAIR PROCESS
- Engagement
- Explanation
- Expectation clarity
Assets that lack physical substance but still hold value
for a business.
INTANGIBLE CAPITAL
