Overview[ edit ] Based on a study of strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that companies can succeed by creating "blue oceans" of uncontested market space, as opposed to "red oceans" where competitors fight for dominance, the analogy being that an ocean full of vicious competition turns red with blood. The first part presents key concepts of blue ocean strategy, including Value Innovation — the simultaneous pursuit of differentiation and low cost — and key analytical tools and frameworks such as the strategy canvas and the four actions framework.
This allows you to differentiate yourself by choosing a different combination of factors on which to compete. In very simple terms, for example, if all of your competitors compete on price, you might choose to compete not on price but on quality, by launching a premium brand.
In practice, of course, the situation is seldom that simple, and you'll be looking for a unique combination of factors, rather than a single factor alone. And it is here that the Strategy Canvas's visualisation method comes into its own. It shows how Southwest Airline carved out its strategic differentiation by combining the no-frills, no-hassle convenience and cost of travelling by car with the speed and friendly service of an airline.
In fact by removing the airlines' add-ons, Southwest was able to improve on the service and speed they offered. There are many case studies on Southwest Airlines which you can read so I won't go into further details here.
It's free to use, so why not give it a go? There are 4 relatively simple steps to preparing your own Strategy Canvas. Identify the competition The first step to drawing a Strategy Canvas is to know who your competition is.
In fact, this is essential to any strategic thinking process.
Don't forget to include your own business, if you are already in the market. When identifying competitors, it is always important to look at the problem from the customer's perspective - who or what else could satisfy your customer needs? Had Southwest Airlines not done this, they would simply have listed the other airlines, and not realised that, in many cases, customers are choosing between flying and other modes of transport.
Identify the factors of competition The second step is to identify the factors that your customers value when choosing the product or service you are offering. In the above example, these include the price, meals, lounges, seating choices, etc.
The simplest way to do this is to actually get out and speak to your target customers, but there are many research approaches you could adopt.
Remember, it is important to speak to people who already buy your product and service, people who buy it but from your competitor, and people who don't yet buy your product and service but might in the future especially if your strategy is successful.
Strategy Canvases prepared on this basis can be significantly different, and the ensuing debate can be a valuable team building and strategising exercise if managed well. However, once again, you can also ask your customers directly, just by talking to them or using a variety of research techniques, to get a more accurate and objective picture.
Chart your competitive differentiation Now you are ready to map your new strategy onto the Canvas. That difference, that unique blend of competitive factors, is your competitive differentiation. Of course, not just any differentiation will do.
You must pick a combination that a sufficient number of your target customers will find compelling, in order to sustain your commercial objectives. You will undoubtedly have to dig deep into your box of other strategy tools to do so.
There is an art to drawing a really useful Strategy Canvas, but with a little practice, you can learn to draw really insightful diagrams.The Blue Ocean Strategy Tools – Strategy Canvas This tool serves as both a diagnostic aid and an action framework for creating blue ocean strategies.
On a graph, the horizontal axis depicts a range of factors that a company competes on while the vertical axis shows the offering level received by the buyers. The purpose of the strategy canvas is to find your blue ocean opportunity. It captures the current state of play in the existing market so you can see the factors on which the industry competes and where competitors are investing.
Blue Ocean Strategy & Shift Tools W. Chan Kim and Renée Mauborgne created a comprehensive set of analytic tools and frameworks to . been a great “blue ocean” school from its founding as the original international business school in We pioneered the one-year intensive MBA, the use of simulations to complement case studies, and Blue Ocean Strategy is both a call-to-action and a guide-to-action.
Its call to action has been taken up by businesses, by governments. For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business.
Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, Funky Business explained that "Competitive Strategy is the route to nowhere". What is Blue Ocean Strategy Part 3 - The Strategy Canvas Robynne Berg - Monday, October 31, Blue ocean strategy is a suite of strategic principles, tools and methodologies that help organisations create leaps in value and profit by looking beyond the limitations of traditional competitive strategy.