Professional Documents
Culture Documents
sectors, and they lead companies into the corridor of commercially viable blue ocean ideas These paths challenge the fundamental assumptions underlying many companies strategies
within it Look at their industries through the lens of generally accepted strategic groups, and strive to stand out in the strategic group they are in Focus on the same buyer group, whether its the purchaser, user, or influencer Define the scope of the products and services offered by their industry similarly Accept their industrys functional and emotional orientation Focus on the same point in time-and often on current competitive threats-in formulating strategy
companies in its own industry but also with companies in those other industries that produce alternative products or services. Alternatives are broader than substitutes -Example: Starbucks
Substitutes: House Blend, French Blend, Latin American
Blends, Asian Pacific Blends, etc. Alternatives: Tazo Teas for Coffee
weigh alternatives, often unconsciously Sellers rarely think consciously about how their customers make trade-offs across alternative industries Space between alternative industries provides opportunities for value innovation By focusing on the key factors that lead buyers to trade across alternative industries and eliminating or reducing everything else, you can create a blue ocean of new market space
Developed new concept Women only, more locations, smaller buildings, cheap to join and manage.
products or services Many companies fail to notice this The key is to define a solution buyers seek when they choose a product or service A simple way to do this is to think about what happens
Before
During
After
NABI
Hungarian bus company that applied Path 4 to U.S.
transit bus industry Competition competed on offering the lowest purchase price for buses But,
Designs outdated Delivery times were late
NABI
Discovered it was costs that came after initial bus was
purchased
Maintenance over its 12 year cycle Repairs after accidents Fuel usage Wear and tear Rusting
Fiberglass Buses
Cut costs by being corrosion free
Light weight cut fuel consumption and emissions After accidents they didnt have to replace a whole
panel rather they could cut the damaged area and replace it Lighter weight also meant lower powered engines and fewer axles which cut costs And gave more space inside the bus
service is used How to eliminate problem areas through a complementary product or service offering
Cemex
The worlds third largest cement producer.
Created a blue ocean by shifting from functional to
emotional. Mexicos poor didnt have enough money to purchase building materials.
Patrimonio Hoy
Created around the traditional Mexican system of
tandas. Example:
Ten individuals contribute 100 pesos per week for 10
weeks. Lots are drawn to see who wins the 1,000 pesos. Each individual wins one time only.
Functional Orientation
Service Industries
Direct Line Group has done away with traditional
brokers.
Eliminating emotional orientation
Assessing Trends
Three principles:
The trends must be decisive to your business 2) They must be irreversible 3) They must have a clear trajectory
1)
-Impact on your business -Work back from conclusion -Ex: EU, iTunes, Cisco, CNN, Sex and the City
Questions?