Download blue ocean strategy pdf

My Ocean Is Turning Red Updates on all cases and examples in the book, bringing their stories up to the present time Two new chapters and an expanded third one--Alignment, Renewal, and Red Ocean Traps --that address the most pressing questions readers have asked over the past 10 years A landmark work that upends traditional thinking about strategy, this bestselling book charts a bold new path to winning the future.

Consider this your guide to creating uncontested market space--and making the competition. Blue Ocean Strategy Author : W. This collection of work by globally preeminent management thinkers W. The book presents a systematic approach to making competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans.

The authors provide a framework for avoiding spaces where competition is bloody red oceans and moving to blue ocean spaces with ample potential. Chan Kim and RenEe A. The text offers a practical handbook to business students and entrepreneurs who wish to rise above the fray of the competition, become pioneers in previously uncharted market territory, and gain access to impressive growth opportunities and an untapped customer base.

You may find Epub Books the ocean at.. Download free eBooks for your Kindle,. A brilliantly imaginative and poignant fairy tale from the modern master of wonder and.. Torrentz - Fast and convenient Torrents Search Engine. Home; Contact;. The Ocean at the End of the Lane is told with a rare understanding of all that makes.. It removed all technical jargon from the bottles and created instead a striking, simple, and nontraditional label featur- ing a kangaroo in bright, vibrant colors of orange and yellow on a black background.

The wine boxes [yellow tail] came in were also of the same vibrant colors, with the name [yellow tail] printed boldly on the sides; the boxes served the dual purpose of acting as eye- catching, unintimidating displays for the wine. The retail employees were inspired by the branded clothing and having a wine they themselves did not feel in- timidated by, and recommendations to buy [yellow tail] flew out of their mouths. In short, it was fun to recommend [yellow tail]. Minimizing the stockkeeping units maximized its stock turnover and mini- mized investment in warehouse inventory.

In fact, this reduction of variety was carried over to the bottles inside the cases. Casella Wines was the first company to put both red and white wine in the same-shaped bottle, a practice that created further simplicity in manufacturing and purchasing and resulted in stunningly simple wine displays.

The wine industry worldwide was proud to promote wine as a re- fined beverage with a long history and tradition. This is reflected in the target market for the United States: educated professionals in the upper income brackets.

Indeed the growth strate- gies of the major players in the U. By looking to beer and ready-to-drink cocktail customers, however, [yellow tail] found that this elite image did not resonate with the general public, which found it intimidating. So [yellow tail] broke with tradition and cre- ated a personality that embodied the characteristics of the Aus- tralian culture: bold, laid back, fun, and adventurous.

The lowercase spelling of the name [yellow tail], coupled with the vibrant colors and the kan- garoo motif, echoed Australia.

And indeed no reference to the vine- yard was made on the bottle. The wine promised to jump from the glass like an Aussie kangaroo. The result is that [yellow tail] appealed to a broad cross section of alcohol beverage consumers. From the moment the wine hit the retail shelves in July , sales took off. It is a supplementary analytic to the four actions framework called the eliminate-reduce-raise-create grid see figure The grid pushes companies not only to ask all four questions in the four actions framework but also to act on all four to create a new value curve.

Figure , the eliminate-reduce-raise-create grid for Cirque du Soleil, provides another snapshot of this tool in action and shows what it reveals. Worth noting is the range of factors that an indus- try has long competed on that companies discover can be elimi- nated and reduced. Moreover, ani- mal acts are one of the most expensive elements; not only is there the cost of the animals, but also their training, medical care, hous- ing, insurance, and transportation.

Similarly, although the circus industry focused on featuring stars, in the mind of the public the so-called stars of the circus were trivial next to movie stars. Again, they were a high-cost component carrying little sway with specta- tors.

Not only did these create angst among spectators as they rapidly switched their gaze from one ring to the other, but they also increased the number of per- formers needed, with the obvious cost implications. Three Characteristics of a Good Strategy [yellow tail], like Cirque du Soleil, created a unique and excep- tional value curve to unlock a blue ocean. These three characteristics serve as an initial litmus test of the commercial viability of blue ocean ideas.

Southwest Airlines created a blue ocean by break- ing the trade-offs customers had to make between the speed of air- planes and the economy and flexibility of car transport. To achieve this, Southwest offered high-speed transport with frequent and flexi- ble departures at prices attractive to the mass of buyers.

By elimi- nating and reducing certain factors of competition and raising others in the traditional airline industry, as well as by creating new factors drawn from the alternative industry of car transport, South- west Airlines was able to offer unprecedented utility for air travel- ers and achieve a leap in value with a low-cost business model. The value curve of Southwest Airlines differs distinctively from those of its competitors in the strategy canvas.

Its strategic profile is a typical example of a compelling blue ocean strategy. Costly business models result. On the strategy canvas, therefore, reactive strategists tend to share the same strategic profile. In contrast, the value curves of blue ocean strategists always stand apart. Southwest, for example, pioneered point- to-point travel between midsize cities; previously, the industry operated through hub-and-spoke systems.

Compelling Tagline A good strategy has a clear-cut and compelling tagline. Even the most proficient ad agency would have difficulty reducing the conventional offering of lunches, seat choices, lounges, and hub links, with standard service, slower speeds, and higher prices into a memorable tagline.

A good tagline must not only deliver a clear message but also advertise an offering truthfully, or else customers will lose trust and interest. In fact, a good way to test the effectiveness and strength of a strategy is to look at whether it contains a strong and authentic tagline. The figure shows that the value curve of Ringling Bros. It has new and noncircus factors such as theme, multiple productions, re- fined watching environment, and artistic music and dance.

These factors, entirely new creations for the circus industry, are drawn from the alternative live entertainment industry of theater. In this way, the strategy canvas clearly depicts the traditional factors that affect competition among industry players, as well as new factors that lead to creation of new market space and that shift the strat- egy canvas of an industry. However, their strategic profiles shared the same three characteristics: focus, divergence, and a compelling tagline.

These three criteria guide companies in carrying out the process of re- construction to arrive at a breakthrough in value both for buyers and for themselves. Reading the Value Curves The strategy canvas enables companies to see the future in the pres- ent. To achieve this, companies must understand how to read value curves. Embedded in the value curves of an industry is a wealth of strategic knowledge on the current status and future of a business.

A Blue Ocean Strategy The first question the value curves answer is whether a business de- serves to be a winner. These three criteria serve as an initial litmus test of the commercial viability of blue ocean ideas. This signals slow growth unless, by the grace of luck, the company benefits from being in an industry that is growing on its own ac- cord. If not, the strategy canvas signals that the company may be oversup- plying its customers, offering too much of those elements that add incremental value to buyers.

To value-innovate, the company must decide which factors to eliminate and reduce—and not only those to raise and create—to construct a divergent value curve. Its strategy is likely based on independent substrategies. These may individually make sense and keep the business running and everyone busy, but col- lectively they do little to distinguish the company from the best competitor or to provide a clear strategic vision.

This is often a re- flection of an organization with divisional or functional silos. Strategic Contradictions Are there strategic contradictions? These are areas where a com- pany is offering a high level on one competing factor while ignor- ing others that support that factor. Strategic inconsistencies can also be found between the level of your offering and your price. No wonder it was losing market share fast. For example, does it use the word mega- hertz instead of speed, or thermal water temperature instead of hot water?

Are the competing factors stated in terms buyers can under- stand and value, or are they in operational jargon? Analyzing the language of the strategy canvas helps a company understand how far it is from creating industry demand. It is the intersection between these analytic techniques and the six principles of formulating and exe- cuting blue oceans that allow companies to break from the compe- tition and unlock uncontested market space. Now we move on to the first principle, reconstructing market boundaries.

In the next chapter we discuss the opportunity-maxi- mizing and risk-minimizing paths to creating blue oceans. This principle addresses the search risk many companies struggle with. The challenge is to success- fully identify, out of the haystack of possibilities that exist, com- mercially compelling blue ocean opportunities.

This challenge is key because managers cannot afford to be riverboat gamblers bet- ting their strategy on intuition or on a random drawing. In conducting our research, we sought to discover whether there were systematic patterns for reconstructing market boundaries to create blue oceans.

And, if there were, we wanted to know whether these patterns applied across all types of industry sectors—from consumer goods, to industrial products, to finance and services, to telecoms and IT, to pharmaceuticals and B2B—or were they lim- ited to specific industries?

We found clear patterns for creating blue oceans. Specifically, we found six basic approaches to remaking market boundaries. We call this the six paths framework. None of these paths requires special vision or foresight about the future.

All are based on looking at familiar data from a new perspective. These six assumptions, on which most companies hypnotically build their strategies, keep compa- nies trapped competing in red oceans. To break out of red oceans, companies must break out of the ac- cepted boundaries that define how they compete. Instead of look- ing within these boundaries, managers need to look systematically across them to create blue oceans. This gives companies keen insight into how to reconstruct market realities to open up blue oceans.

Path 1: Look Across Alternative Industries In the broadest sense, a company competes not only with the other firms in its own industry but also with companies in those other in- dustries that produce alternative products or services.

Alternatives are broader than substitutes. Products or services that have differ- ent forms but offer the same functionality or core utility are often substitutes for each other.

On the other hand, alternatives include products or services that have different functions and forms but the same purpose. For example, to sort out their personal finances, people can buy and install a financial software package, hire a CPA, or simply use pencil and paper. The software, the CPA, and the pencil are largely substitutes for each other. They have very different forms but serve the same function: helping people manage their financial affairs. In contrast, products or services can take different forms and perform different functions but serve the same objective.

Consider cinemas versus restaurants. Restaurants have few physical fea- tures in common with cinemas and serve a distinct function: They provide conversational and gastronomical pleasure. This is a very different experience from the visual entertainment offered by cine- mas.

Despite the differences in form and function, however, people go to a restaurant for the same objective that they go to the movies: to enjoy a night out. These are not substitutes, but alternatives to choose from. In making every purchase decision, buyers implicitly weigh al- ternatives, often unconsciously. Do you need a self-indulgent two hours?

What should you do to achieve it? For some reason, we often abandon this intuitive thinking when we become sellers. Rarely do sellers think consciously about how their customers make trade-offs across alternative industries. A shift in price, a change in model, even a new ad campaign can elicit a tremendous response from rivals within an industry, but the same actions in an alternative industry usually go unnoticed.

Trade jour- nals, trade shows, and consumer rating reports reinforce the verti- cal walls between one industry and another. Often, however, the space between alternative industries provides opportunities for value innovation.

Consider NetJets, which created the blue ocean of fractional jet ownership. In less than twenty years NetJets has grown larger than many airlines, with more than five hundred aircraft, operating more than two hundred fifty thousand flights to more than one hun- dred forty countries.

Purchased by Berkshire Hathaway in , today NetJets is a multibillion-dollar business, with revenues grow- ing at 30—35 percent per year from to The reality is that NetJets reconstructed market boundaries to cre- ate this blue ocean by looking across alternative industries. The most lucrative mass of customers in the aviation industry are corporate travelers. NetJets looked at the existing alternatives and found that when business travelers want to fly, they have two principal choices.

On the other hand, a company can purchase its own aircraft to serve its corpo- rate travel needs. The strategic question is, Why would corpora- tions choose one alternative industry over another? By focusing on the key factors that lead corporations to trade across alternatives and eliminating or reducing everything else, NetJets created its blue ocean strategy.

Consider this: Why do corporations choose to use commercial airlines for their corporate travel? Rather, they choose commercial air- lines for only one reason: costs.

On the one hand, commercial travel avoids the high up-front, fixed-cost investment of a multimillion- dollar jet aircraft. On the other hand, a company purchases only the number of corporate airline tickets needed per year, lowering variable costs and reducing the possibility of unused aviation travel time that often accompanies the ownership of corporate jets.

So NetJets offers its customers one-sixteenth ownership of an aircraft to be shared with fifteen other customers, each one entitled to fifty hours of flight time per year. Comparing first-class travel with private aircraft, the National Business Avia- tion Association found that when direct and indirect costs—hotel, meals, travel time, expenses—were factored in, the cost of first- class commercial travel was significantly higher.

To understand the rest of the NetJets formula, consider the flip side: Why do people choose corporate jets over commercial travel? Certainly it is not to pay the multimillion-dollar price to purchase planes. Nor is it to set up a dedicated flight department to take care of scheduling and other administrative matters.

Nor it is to pay so- called deadhead costs—the costs of flying the aircraft from its home base to where it is needed. Rather, corporations buy private jets to dramatically cut total travel time, to reduce the hassle of congested airports, to allow for point-to-point travel, and to gain the benefit of having more productive and energized execu- tives who can hit the ground running upon arrival.

So NetJets built on these distinctive strengths. On international flights, your plane pulls directly up to the cus- toms office. With point-to-point service and the exponential increase in the number of airports to land in, there are no flight transfers; trips that would otherwise require overnight stays can be completed in a single day. The time from your car to takeoff is measured in min- utes instead of hours.

For example, whereas a flight from Washing- ton, D. If a jet is not available, NetJets will charter one for you. Last but not least, NetJets dramatically reduces issues re- lated to security threats and offers clients customized in-flight ser- vice, such as having your favorite food and beverages ready for you when you board. By offering the best of commercial travel and private jets and eliminating and reducing everything else, NetJets opened up a multibillion-dollar blue ocean wherein customers get the conven- ience and speed of a private jet with a low fixed cost and the low variable cost of commercial airline travel see figure And the competition?

According to NetJets, in the past seven years fifty- seven companies have set up fractional jet operations; of those, fifty-seven have gone out of business. The biggest telecommunications success in Japan since the s also has its roots in path 1. The i-mode service changed the way people communicate and access information in Japan.

The result was that costs were rising while the average revenue per user fell. NTT DoCoMo broke out of this red ocean of bloody com- petition by creating a blue ocean of wireless transmission not only of voice but also of text, data, and pictures. Although the Internet of- fered endless information and services, the killer apps were e-mail, simple information such as news, weather forecasts, and a tele- phone directory , and entertainment including games, events, and music entertainment.

On the other hand, the distinctive strengths of mobile phones were their mobility, voice transmission, and ease of use. NTT DoCoMo broke the trade-off between these two alterna- tives, not by creating new technology but by focusing on the deci- sive advantages that the Internet has over the cell phone and vice versa.

The company eliminated or reduced everything else. Its user- friendly interface has one simple button, the i-mode button i stand- ing for interactive, Internet, information, and the English pronoun I , which users press to give them immediate access to the few killer apps of the Internet.

Instead of barraging you with infinite infor- mation as on the Internet, however, the i-mode button acts as a hotel concierge service, connecting only to preselected and preap- proved sites for the most popular Internet applications. That makes navigation fast and easy. At the same time, even though the i-mode phone is priced 25 percent higher than a regular cell phone, the price of the i-mode phone is dramatically less than that of a PC, and its mobility is high. Moreover, beyond adding voice, the i-mode uses a simple billing service whereby all the services used on the Web via the i-mode are billed to the user on the same monthly bill.

This dramatically re- duces the number of bills users receive and eliminates the need to give credit card details, as on the Internet.

And because the i-mode service is automatically turned on whenever the phone is on, users are always connected and have no need to go through the hassle of logging on. By the end of the number of i-mode subscribers had reached The i-mode service did not simply win customers from competitors. It dramatically grew the market, drawing in youth and senior citi- zens and converting voice-only customers to voice and data trans- mission customers.

Our assessment shows that they have been focused on deliver- ing the most sophisticated technology, WAP wireless application protocol , instead of delivering exceptional value. This has led them to build overcomplicated offerings that miss the key common- alities valued by the mass of people. Many other well-known success stories have looked across alter- natives to create new markets.

The Home Depot offers the expertise of professional home contractors at markedly lower prices than hard- ware stores. By delivering the decisive advantages of both alterna- tive industries—and eliminating or reducing everything else—The Home Depot has transformed enormous latent demand for home improvement into real demand, making ordinary homeowners into do-it-yourselfers. Southwest Airlines concentrated on driving as the alternative to flying, providing the speed of air travel at the price of car travel and creating the blue ocean of short-haul air travel.

Simi- larly, Intuit looked to the pencil as the chief alternative to personal financial software to develop the fun and intuitive Quicken software. What are the alternative industries to your industry? Why do customers trade across them? 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. Path 2: Look Across Strategic Groups Within Industries Just as blue oceans can often be created by looking across alterna- tive industries, so can they be unlocked by looking across strategic groups.

The term refers to a group of companies within an industry that pursue a similar strategy. In most industries, the fundamental strategic differences among industry players are captured by a small number of strategic groups. Each jump in price tends to bring a corresponding jump in some dimensions of performance.

Most companies focus on improving their competi- tive position within a strategic group. Mercedes, BMW, and Jaguar, for example, focus on outcompeting one another in the luxury car segment as economy car makers focus on excelling over one an- other in their strategic group.

Neither strategic group, however, pays much heed to what the other is doing because from a supply point of view they do not seem to be competing. A new Curves opens, on average, every four hours somewhere in the world. In reality, however, Curves exploded demand in the U. Curves built on the decisive advantages of two strategic groups in the U.

At the one extreme, the U. Their trendy facilities are designed to attract the high-end health club set. Having fought their way across town to health clubs, customers typically spend at least an hour there, and more often two. Traditional health club customers represent only 12 percent of the entire population, concentrated overwhelmingly in the larger urban areas. At the other extreme is the strategic group of home exercise pro- grams, such as exercise videos, books, and magazines.

These are a small fraction of the cost, are used at home, and generally require little or no exercise equipment. Instruction is minimal, being con- fined to the star of the exercise video or book and magazine expla- nations and illustrations.

The question is, What makes women trade either up or down be- tween traditional health clubs and home exercise programs? The average female nonathlete does not even want to run into men when she is working out, perhaps revealing lumps in her leotards. She is not inspired to line up behind ma- chines in which she needs to change weights and adjust their in- cline angles. As for time, it has become an increasingly scarce commodity for the average woman.

Few can afford to spend one to two hours at a health club several times a week. For the mass of women, the city center locations also present traffic challenges, something that increases stress and discourages going to the gym. It turns out that most women trade up to health clubs for one principal reason. Conversely, women who use home exercise programs do so primarily for the time saving, lower costs, and privacy. Curves built its blue ocean by drawing on the distinctive strengths of these two strategic groups, eliminating and reducing everything else see figure Curves has eliminated all the aspects of the tra- ditional health club that are of little interest to the broad mass of women.

Gone are the profusion of special machines, food, spa, pool, and even locker rooms, which have been replaced by a few curtained- off changing areas. The experience in a Curves club is entirely different from that in a typical health club. The member enters the exercise room where the machines typically about ten are arranged, not in rows facing a television as in the health club, but in a circle to facilitate inter- change among members, making the experience fun.

The QuickFit circuit training system uses hydraulic exercise machines, which need no adjusting, are safe, simple to use, and nonthreatening. Specifically designed for women, these machines reduce impact stress and build strength and muscle. While exercising, members can talk and support one another, and the social, nonjudgmental atmosphere is totally different from that of a typical health club.

There are few if any mirrors on the wall, and there are no men star- ing at you. Members move around the circle of machines and aero- bic pads and in thirty minutes complete the whole workout. Most franchises are profitable within a few months, as soon as they recruit on average one hun- dred members.

The result is that Curves facilities are everywhere in most towns of any size. Curves is not competing directly with other health and exercise concepts; it created new blue ocean demand. Expansion has already begun in Latin America and Spain. By the end of , Curves is expected to reach eight thousand five hundred fitness centers. At the same time, its up- dated classical look and price capture the best of the classical lines such as Brooks Brothers and Burberry.

By combining the most at- tractive factors of both groups and eliminating or reducing every- thing else, Polo Ralph Lauren not only captured share from both segments but also drew many new customers into the market.

And think of the Sony Walkman. By looking across the high fidelity of boom boxes with the low price and mobility of transistor radios within the audio equipment industry, Sony created the personal portable-stereo market in the late s. The Walkman took share from these two strategic groups. In addition, its leap in value drew new customers, including joggers and commuters, into this blue ocean.

Michigan-based Champion Enterprises identified a similar op- portunity by looking across two strategic groups in the housing in- dustry: makers of prefabricated housing and on-site developers. Prefabricated houses are cheap and quick to build, but they are also dismally standardized and have a low-quality image.

Houses built by developers on-site offer variety and an image of high qual- ity but are dramatically more expensive and take longer to build. Champion created a blue ocean by offering the decisive advan- tages of both strategic groups. EPUB download..

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