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Blue Ocean Strategy-Appendix A,B,C

Blue Ocean Strategy-Appendix A,B,C. Michal Medrano Casey Harvey Mason Stone Julio Garcia Courtney Ellis Glen Lesly Travis Tempel Roberto Padilla. Key Topics:. Open New market Space Value Innovation- Linked to what buyers value Competition Buyer Value at an accessible price

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Blue Ocean Strategy-Appendix A,B,C

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  1. Blue Ocean Strategy-Appendix A,B,C Michal Medrano Casey Harvey Mason Stone Julio Garcia Courtney Ellis Glen Lesly Travis Tempel Roberto Padilla

  2. Key Topics: • Open New market Space • Value Innovation- Linked to what buyers value • Competition • Buyer Value at an accessible price • Two Distinct Views on Industry Structure • Structuralist Strategies • Reconstructionist Strategy • Reconstruction & Recombination • Market Dynamics of Value Innovation Appendix C • Monopolies

  3. Automobile Industry • Started back in 1893 • Woodrow Wilson said " the horseless carriage at the present is a luxury for the wealthy. It will never come into consumer use as the bicycle. The Model T • Henry Ford • Revolutionary Assembly Line • Market Share rose from 9% in 1908 to 62% in 1921

  4. General Motors • 1924 • Strategy- Produce a car for every purse and purpose • Buyers trade up for fashion and comfort

  5. Japanese Jump Into Blue Ocean Opportunity • Small, Fuel Efficient cars • Cars made were the Honda, Toyota, and Nissan • Oil Crisis in the 1970's, Consumers flocked the Japanese cars Chrysler • On edge of bankruptcy • Introduce the minivan • Ignites SUV market

  6. Two Distinct Views on Industry Structure • Structuralist View – Has its roots in industrial organization economics • Industrial Organization • Reconstructionist View – built on theory of endogenous growth • Joseph A Schumpeter

  7. Structuralist Strategies • Structuralist – important implications often leads to competition-based strategic thinking.Leads to deciding whether or not to enter. • Leads firms to divide industries into attractive and unattractive one. • Decide whether or not to enter.

  8. Reconstructionist Strategy • Recognizing that structure and market boundaries. • Managers & Practitioners do not let this view limit their thinking • Creating Demand • Reordering existing elements

  9. Reconstruction & Recombination • A change in market structure • Stimulating the demand side • Cirque de Soleil • Reconstructing existing buyer value elements • Reconstruction & Recombination

  10. Market Dynamics of Value Innovation Appendix C • Value innovation vs. technology innovation • Value innovation rapidly increases demand • Lowers price and long run average costs UnderArmour • Submit and Idea

  11. Monopolies • Harm social welfare • Charge high prices that exclude consumers • Waste society’s resources-deadweight loss

  12. Conclusion: • Auto Industry • Structuralist • Reconstructionist • Value Innovation and Monopolies

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