Avoid Red Ocean Traps By Andy Rogers Miller

Avoid Red Ocean Traps By: Andy Rogers, Miller Peaden, Bowie Wynne, Richard Kelly

Red Ocean Trap One - The belief that blue ocean strategy is a customer-oriented strategy that’s about being customer led. - Noncustomers hold the greatest insight into industry pain points. - This forces you to create a new demand in the industry.

Trap Two -The belief that to create blue oceans, you must venture beyond your core business. -Businesses must adapt and overcome -Example- If Ford would have been the first vehicle manufacture to mass produce electric vehicles before other companies.

Trap Three -The misconception that blue ocean strategy is about new technologies. -Not all blue oceans are created through new technologies including Starbucks, Chick Fil A, Salesforce. com.

Trap Four -The belief that to create a blue ocean, you must be first to market It’s not about being first to market, it’s about being first to get it right by linking innovation to value. (Apple, Fisker, etc)

Trap Five -The misconception that blue ocean strategy and differentiation strategy are synonymous Differentiation is a strategic choice that reflects the value-cost trade off in a given market structure. (price) Blue Ocean strategy is about breaking the value-cost trade off to open new market space.

Trap Six -The misconception that blue ocean strategy is a low-cost strategy that focuses on low pricing Blue Ocean strategy pursues differentiation and low cost by restructuring market boundaries. Create leap in buyer value at lower costs.

Trap Seven -The belief that blue ocean strategy is the same as Innovation - Creating value innovation -Tesla’s Model 3 is currently 60% of the US EV market.

Trap Eight -The belief that blue ocean strategy is a theory of marketing and a niche strategy - BOS requires more than just a compelling value proposition - Niche strategy is the opposite of a blue ocean strategy -BOS wants to find commonalities among all buyer groups, and not segment the market further.

Trap Eight Continued -Tesla has struggled with finding a large market for their electric vehicles but continues to adjust to market commonalities. - In Q 1 2019 Tesla was 15% of Luxury Car sales (trailing BMW and Mercedes. Benz)

Trap Nine The belief that blue ocean strategies sees competition as bad when in fact it can be good for companies Less incentive to improve product lines Competition is only good to a certain point? Go beyond competition and innovative strategies Redefine industry boundaries and create new market space

Trap Ten The belief that blue ocean strategy is synonymous with creative destruction or disruption Without displacement, disruption does not occur (Digital photography is the norm) Go beyond creative destruction to embrace non destructive creations Ex: Viagra, The Nintendo Wii Key question is how does our company stimulate economic growth?