The four actions frame work of the blue ocean strategy applied on jet blue case study shows that david neelmans and with his years of experience in the airline industry new exactly what to reduce, create, raise and eliminate which ensured that jet blue set the benchmark in the airline industry and broke all myths practices that were taken as granted in the industry. Pdf impact of blue ocean strategy on organizational. In this article you will learn how to make your competition irrelevant and have sales and profit. What is blue ocean strategy about blue ocean strategy. Chan kim and renee mauborgne is used to reconstruct buyer value elements in crafting a new value curve or strategic profile. Value innovation strategy canvas four actions framework six paths. What are the factors, which your industry takes for granted, but should be eliminated. After you define the three tiers of non customers, the idea is that you poll these noncustomers and find out what it would take to purchase your product or service. Chen, information systems theory and practices red ocean vs.
To break the tradeoff between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry. The diagnostic framework is somewhat of a situational analysis. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. A fouraction framework for blueocean innovation the. The structure can be created or recreated by the steps taken by players in the market. The premise of the book is that companies can succeed by creating. This short article examines the many ways blue ocean strategy bos can be used to create a better educational system. It provides guidelines to identify new competing factors and therefore be more creative during later phases of innovation and design a new buyer value curve. Made by group d of the minor global trendwatching 2015.
Aug 28, 2012 this article explains the blue ocean strategy, developed by w. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Four hurdles to strategy execution blue ocean strategy. A good blue ocean strategy has items in each of the four grids. The evolution of blue ocean strategy vivechan international journal. A crucial tool in this odyssey is the fouractions framework. Blue ocean strategy formulation the four principles of strategy formation this blog article is a summary of the book by w. Blue ocean strategys four actions framework poses four central questions that let companies break the valuecost tradeoff and create a blue ocean. Create here, the idea is to create new industry factors that can generate value and anew market and were not. To break from competition, a organization has to reconstruct the market boundary which is the first and foremost principle in creating blue ocean strategy. Strategy canvas key competing factors offeringlevel 23. Blue ocean strategy on jet blue case study by neil k. 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.
Remember what the product that company delivers is all about. The four pillars of blue ocean leadership insead knowledge. An analogy for using the blue ocean strategy framework game. There are six basic approaches to reconstruct market boundaries, also known as six paths framework. The challenge of execution exists, of course, for any strategy. Chen, information systems theory and practices blue ocean strategy.
The blue ocean strategy offers users a framework for creating uncontested market. This allows you to understand where the competition is currently investing, the factors the industry currently competes on in products, service, and delivery, and what. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Four actions framework blue ocean strategy shortform blog. Once a blue ocean is discovered, management must clearly formulate the blue ocean strategy and take the actual actions to implement the new strategy. Apr 25, 2018 to move forward with the model, and thus the companys new blue ocean strategy, the use of the strategic canvas can be one of the most crucial aspects of the planning of the strategy. Public sector application and research, including the application of blue ocean shift, blue ocean strategy, and blue ocean leadership to governments and nonprofits. Sep 23, 2014 to put blue ocean leadership in action, we adapt the analytic tools and frameworks of blue ocean strategy to the leadership context. The canvas can be split between a diagnostic framework and an action framework. The four actions framework and errc grid tweet after you define the three tiers of non customers, the idea is that you poll these noncustomers and find out what it would take to purchase your product or service. Once a company has developed a blue ocean strategy with a profitable business model, the next challenge is strategy execution. Four actions framework template blue ocean framework miro. The result is the leadership canvas, the leadership profile and the blue ocean leadership grid all of which are grounded in acts and activities, easy to understand and communicate and that engage more people in an.
The fouractions frameworkon blue ocean strategy to reduce, create, raise and eliminate industry practices to create a. They observed that companies tend to engage in headtohead competition in search of sustained profitable growth. Pdf blue ocean strategy as a tool for improving a companys. Blue ocean shift is the definitive guide to shift you, your team, and your organization to new heights of confidence, market creation, and growth. Barriers to imitation adopting a blue ocean creators business model is hard thing to do. Blue ocean strategy value innovation strategy canvas four actions. Blue ocean strategy is a systematic approach to finding innovative, cost efficient, value adding, productmarket matches. May 31, 2016 instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. The four actions framework and the eliminatereduceraisecreate grid are almost a straightforward stepbystep strategy which offers an answer to all four parts of the marketing mix. Ill explain both of these in big picture terms to help you understand how these concepts interact with and build on one another to help you get a better idea of your strategic position relative to your market, and then how to break out of it by. Before the blue ocean strategy framework can be applied, many strategists utilize porters 1979 five forces theory as a strategy canvas can only be created once one captures the contemporary state of the play by detailing the factors that players compete on in terms of products, services and even delivery. Summary of the first four chapters of the international bestseller blue ocean strategy. Jul 16, 2015 the blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present.
The four actions framework is used to help create value innovation and break the valuecost tradeoff. The six paths framework in formulating blue ocean strategy are 1 look across alternative industries, 2 look across strategic groups within industry, 3look across buyer groups, 4 look across complementary product and service offerings, 5look across the functionalemotional orientation of an industry and 5look across time to shape trends. The blue ocean strategy tools strategy canvas this tool serves as both a diagnostic aid and an action framework for creating blue ocean strategies. An analogy for using the blue ocean strategy framework. To move forward with the model, and thus the companys new blue ocean strategy, the use of the strategic canvas can be one of the most crucial aspects of the planning of the strategy. Reviewing the blue ocean strategy university of twente student. Blue ocean strategy workshop at disted hospitality campus.
Miro has multiple exporting options, like saving to pdf. Kicking off the book with four analytical tools that promise to help firms find and exploit untapped markets, the authors offer a step by step approach, comprised of six principles, on how to break away from the competition of red oceans and execute a blue ocean strategy. After reading you will understand the basics of this powerful strategy tool. The process sounds very much like how bos is used every day in the business world because not surprisingly, people in practically any industry ask similar questions. The six paths framework in formulating blue ocean strategy. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. This question helps you to think about removing certain elements which often organizations within your industry utilize as their competitive differentiators.
Apr 28, 2010 blue ocean strategy has two important tools. The expanded edition of blue ocean strategy, is metaphorical, witty, and almost biblical in its commentary of the bloody waters of competitive red ocean market forces. Jul, 2018 to discover an elusive blue ocean, kim and mauborgne recommend that businesses consider what they call the four actions framework to reconstruct buyer value elements in crafting a new value curve. It captures the current state of play in the known market space. Remember what the product that company delivers is. Feb 01, 2016 strategy canvas key competing factors offeringlevel 23. May 14, 2011 the blue ocean strategy four actions framework also called eliminate reduce raise create grid errc grid is a complementary tool to the strategy canvas. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Mar 15, 2014 four actions framework of blue ocean applied to jet blue 1. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a competitive struggle but that. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. Bos four actions framework errc grid innovating now. Red oceans are all the industries in existence today the known market space.
The blue ocean strategy four actions framework also called eliminate reduce raise create grid errc grid is a complementary tool to the strategy canvas. To put blue ocean leadership in action, we adapt the analytic tools and frameworks of blue ocean strategy to the leadership context. Execution principles overcome key organizational hurdles build execution into strategy the four actions framework. Dec 24, 2012 blue ocean strategy is a strategy to create new opportunities where the rules over pricing, technology and disruption have not been set. This study focuses on kim and mauborgne four action framework tool of blue ocean strategy implemented by indian companies in the last. Formulation principles reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right 2. By using the descriptive method and the theories in strategic management, it is clearly visible how the implementation of blue ocean strategy by pt kintetsu world express indonesia can make the.
Value innovation strategy competes in an uncontested market space. Tipping point leadership and fair process in action introduction blue ocean strategy was developed by w. Use our free blue ocean 4 actions framework template to create, collaborate on with your. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. Your productservice must raise and create customer value gain and simultaneously reduce and eliminate features or services that are less valued, or not valued at all, the customer pain. Blue ocean strategy formulation the four principles of. Blue ocean strategy actionable tools and frameworks. An introduction to blue ocean strategy mba knowledge base. Typically, companies in the red ocean pursue incremental improvements for customers through either low cost or differentiation. Social sector application and research, including such topics as how blue ocean strategy can be applied in the developing world to mitigate poverty and improve education and health. In a blue ocean you change the playing field of strategy.
I wish i could say my own pursuit of enlightenment led me to chan kim and renee mauborgnes masterpiece on embracing and leveraging difference. Blue ocean strategy workshop at disted hospitality campus this short article examines the many ways blue ocean strategy bos can be used to create a better educational system. Blue ocean strategys four actions framework poses four central questions that let companies. Jul 28, 2018 the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. But wait, there was another blue ocean in the seventies according to the authors, when the japanese three competitors. Four actions framework of blue ocean applied to jet blue 1. For example, nintendo asked people in their three tiers why they didnt play games. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. Tools and frameworks for creating and capturing blue oceans it is constructed to create a new value curve and when you apply the four actions framework to the strategy canvas of your industry, you get a. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to. Blue ocean strategy is a strategy to create new opportunities where the rules over pricing, technology and disruption have not been set. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was.
Red oceans, the current state of hotly contested industries are a constant battlefield of lowering cost structures, comoditisation of products and services and increasing competition. Chan kim and mauborgne have therefore constructed more frameworks that can help with this process like. The niche strategy adopted by general motors increased overall market share from 20% to 50%. Achieved via the delivery of features that have a highest marginal benefit to customer needs. By creating this plot, you can find imbalances in your strategy, such as only raising and creating which leads to overengineering and trying to be the best or only eliminating and reducing which leads to mere price competition. This study is based on the pros and cons of the blue ocean strategy bos that offers users a framework for creating uncontested market space and diverts the views from the current competition to. First and foremost on their list is a tool used to break out of competition and make competition irrelevant called the strategy canvas. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. Tru group inc blue ocean strategy belongs in the dead sea. This article is about the combination of the blue ocean strategy together with a project management methodology with the objective to help small and medium companies to surpass the actual financial turmoil and tough competitiviness in the red ocean in order to find their own blue ocean. Strategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand. May 26, 2015 summary of the first four chapters of the international bestseller blue ocean strategy. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Most companies focus on how to overcome the competition in existing.
Value innovation is the cornerstone of blue ocean strategy 1 and it is the strategic move that allows a company to create a blue ocean. Chan kim and renee mauborgne, professors at insead. A crucial tool in this odyssey is the four actions framework. This article explains the blue ocean strategy, developed by w. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Oct 09, 2017 a four action framework for blue ocean innovation. The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy 4 actions framework marketingplan. Blue ocean strategy is a bad book, but it is not your usual bad book. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking.
This tool is the central diagnostic and action framework for building a compelling blue ocean strategy. The four actions framework is used to help create value innovation and break the valuecost trade. After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Blue ocean strategy is a book published in 2005 and written by w. Four actions framework of blue ocean applied to jet blue. The four actions framework aids in eliminating the tradeoff between differentiation and low cost. Blue ocean strategy including examples and pdf download.
Blue ocean strategy the four questions that are critical for developing blue ocean strategy. Blue ocean strategy chapter 14 the four action framework chapter two. The fouractions frameworkon blue ocean strategy to reduce, create, raise and eliminate industry practices to create a blue ocean fromthe industry red ocean. Analysis plandata usedkey assumptions analysis plan. Professor of mis school of business administration gonzaga university spokane, wa 99258 usa. Keywords blue oceans, value innovation, four action framework, strategy canvas, fair process. A fouraction framework for blueocean innovation the globe. Companies, like individuals, often have a tough time translating thought into action whether in red or blue oceans. Blue ocean strategy how to create uncontested market.
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