Blue Oceans Strategy Kalie Marchington Jacey Guest Luke

Blue Oceans Strategy Kalie Marchington Jacey Guest Luke Burkett

Quick Review ● ● ● Why it is important to create blue oceans The analytical tools and frameworks needed to do that How companies use those tools to reconstruct market boundaries

The Goal How do you align your strategic planning to focus on the big picture and apply these ideas to drawing a strategic canvas and arrive at a blue ocean?

Typical Strategic Plan vs. a Strategic Canvas TYPICAL STRATEGIC PLAN FOCUSES ON: • How to create market share • How to capture new segments • Cutting costs • Graphs and spreadsheets Results: • Conflicting agendas • No clear picture ADVANTAGES OF A STRATEGY CANVAS: • Reveals blue oceans • Is easy to communicate to the whole organization • Looks to the future • Is easy to execute

Focusing on the Big Picture Strategic Canvas does these three things: 1. Depicts the factors (and future factors) that affect competition within the industry 2. Identifies current and potential competitors 3. Shows the company’s strategic profile (value curve)

Drawing your Strategic Canvas ● Managers know how the company fairs along 1 or 2 dimensions but rarely see the overall dynamic of the whole industry ○ Ex. An airline catering manager knows how his/her airline compares to competitors in terms of refreshments but that may not be the most important factor to customers who look at many other factors the airline has to offer.

4 Steps to Visualizing Strategy 1. Visual Awakening a. Compare your business with competitors by drawing your “as is” strategy canvas b. See where your strategy needs to change Example: European Financial Services

EFS Strategy Canvas (Offline)

EFS Strategy Canvas (Online)

Step 2 2. Visual Exploration a. Examine how people use or don’t use their products or services b. Identify the array of complementary products and services that are consumed alongside your own c. Look at how customers might find alternative ways of fulfilling the need that your product or service satisfies

Step 3 3. Visual Strategy Fair a. Buyers from all markets have a basic set of needs and expect similar services b. Created future distinctive need in the marketplace that is true and hidden

EFS: Before and After

The Case of EFS

Visual Communication Clearly Communicate the strategy in a way that can be understood easily by employees. ● Clear Graphics ● Clear Work Outlines ● Clear Goals

VIP Center - Suwon, South Korea: (Value Innovation Program) Unique meetings are held between different businesses where executives and company heads discuss their different long term strategies. The VIP Center produces on average 90 strategic plans a year. A team of innovative individuals helps push through all projects and helps keep teams focused. ● ● ● Designers Engineers Programmers Planners Executives A Strategy Canvas is a physical example of a business plan.

Pioneer-Migrator-Settler (PMS) Map Pioneer - Business that offers unprecedented value. Settlers - Business whose value curve conforms with the basic shape of the industry. Migrators - Somewhere in the middle The more settlers there are in a market, the better the opportunity to innovate and create value in the industry. Value and Innovation are key parameters to follow when managing business decisions.

Overcoming Traditional Strategy Problems The 4 step Process was created to solve this problem. If you learn and apply each step in the planning process, this will greatly improve your chances of creating a blue ocean. Drawing a Strategy Plan or PMS is very effective. Although this step is not necessary to create a blue ocean, it sure can help your employees visualize the company goals. It is much easier to understand a plan once you have seen graphics based on the information. Most managers are upset with the current system and feel there is a need for change in Strategic Planning. They are for a bottom-up or a top-down approach to planning and feel they don’t have enough power to influence the overall strategy.