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Blue Ocean Strategy

Blue Ocean Strategy. Ch. 4 Focus on the Big Picture, Not the Numbers Seth Schulz, Jacob Martin, Daniel Lujan. Strategic Planning Process. Second Principle Focus on the big picture, not the numbers How do you align your strategic planning process to focus on the big picture?

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Blue Ocean Strategy

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  1. Blue Ocean Strategy Ch. 4 Focus on the Big Picture, Not the Numbers Seth Schulz, Jacob Martin, Daniel Lujan

  2. Strategic Planning Process • Second Principle • Focus on the big picture, not the numbers • How do you align your strategic planning process to focus on the big picture? • Draw a strategy canvas, don’t crunch numbers • This approach consistently produces strategies that unlock the creativity of a wide range of people within an organization, open companies’ eyes to blue oceans, and are easy to understand and communicate for effective execution

  3. Strategy Canvas • 3 Things • 1. Shows the strategic profile of an industry by depicting the factors that affect competition among industry players • 2. Shows the strategic profile of current and potential competitors • 3. Shows the company’s value curve, depicting how it invests in the factors of competition and how it might invest in them in the future

  4. Strategic Profile • High blue ocean potential company’s have three qualities: • 1. Focus • 2. Divergence • 3. Compelling tagline • If a company does not have these qualities, it’s strategy is undifferentiated, hard to communicate, and costly to execute

  5. Drawing Your Strategy Canvas • Drawing your company’s strategy canvas is somewhat difficult to do • Assessing to what extent your competitors offer competitive factors is also difficult to do • Most managers can pinpoint one or two dimensions there company and their competitors fare, but very few see the overall picture of the entire industry

  6. The Four Steps of Visualizing Strategy • 1. Visual Awakening • 2. Visual Exploration • 3. Visual Strategy Fair • 4. Visual Communication • European Financial Services adopted this process to break away from its competition. It resulted in a 30% revenue boost in its initial year of adopting the strategy

  7. Step 1: Visual Awakening • Executives are reluctant to accept the need for change • Takes a highly determined leader or a serious crisis • EFS began the strategy process by bringing together more than 20 senior managers from there subsidiaries in Europe, North America, Asia, and Australia and splitting them into two teams. • Produce value curves depicting EFS’s current strategic profile in its traditional corporate foreign exchange business relative to its competitors and emerging online foreign exchange business relative to its competitors

  8. Step 2 Visual Exploration

  9. Visual Exploration How do people use/don’t use the product or service? • This is many times outsourced • Sends a team into the field to figure things out • Company should never outsource it’s eyes, no substitute for seeing yourself

  10. Visual Exploration Michael Bloomberg • Helped translate financial information online, to something much easier to understand • Change in focus (IT purchasers  Users) Users are the main focus • Go after non-customers as well • What if customer and user is different? • Need to extend observations to users

  11. Visual Exploration Identify the products and services that are complementary to your product or service • May give insight to bundling opportunities European Financial Services (EFS) • Sent own managers into field to observe • New customers, customers of competitors, companies that did not yet use corporate FX…. • Found that relationship managers were ineffective and speedy confirmation of transaction was what customers wanted

  12. Step 3 Visual Strategy Fair

  13. Visual Strategy Fair EFS • Two teams (Online and Offline) • Each had to create 6 curves • Then invited the people interviewed by the managers earlier (non customers, competitors customers…) • Had customers give feedback on each curve

  14. Visual Strategy Fair • EFS discovered 1/3 of what they perceived important, to be only marginal to customer • Overlooked 1/3 of what was essential to the customer • Learned each customer had a basic set of needs and expected services

  15. Visual Strategy Fair In the end • The final strategy formulated • Eliminated relationship mgmt because customers did not like • Reduced investment in account executives and corporate dealers to focus on only AAA accounts • Sent automatic confirmations to all customer because that was essential to every customer

  16. Step 4: Visual Communication Easily Understood Must have a focus and avoid past jargon Moving from the old to the new

  17. Strategy Canvas • First Draw, then Sharing! • Present their canvas and Implementations

  18. Value Innovation Program • Idea by Samsung • Cross functional teams to meet and discuss their strategic projects. • Institutionalized the system (Actual VIP Center) • Awards ceremony to recognize the best cases.

  19. PMS Map • Pioneer- Business that offer unprecedented value • Migrator- Offer value but not innovational value • Settler- Saturated markets

  20. Pioneers VS. Settlers • Pioneers – Maximum growth but high cash consumer • Settlers- Low growth but cash generators

  21. Overcoming Limitations • The Soul never thinks without an image. • Aristotle • Numbers and documentation are still important

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