blue ocean strategy ®

Go where profits and growth are – and where the competition isn’t

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© Kim & Mauborgne

Researching 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

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© Kim & Mauborgne

Red 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

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© Kim & Mauborgne

Six paths to blue ocean strategy
Industry Strategic group

From Competing Within

Buyer group Scope of product or service offering Functional‐emotional orientation of an industry Time

To Creating Across

The six conventional boundaries of competition www.blueoceanstrategy.com © Kim & Mauborgne

Strategy canvas of [yellow tail]
High

Premium wines

[yellow tail]

Budget wines

Low

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© Kim & Mauborgne

Four actions framework
Reduce
Which factors should be reduced well below the industry’s standard?

Eliminate
Which of factors that the industry takes for granted should be eliminated?

Create
A New Value Curve
Which factors should be created that the industry has never offered?

Raise
Which factors should be raised well above the industry’s standard? www.blueoceanstrategy.com © Kim & Mauborgne

Minimizing risks & maximizing opportunities in