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Blue Ocean Strategy Chapter 1- Creating Blue Oceans

Blue Ocean Strategy Chapter 1- Creating Blue Oceans. Team 3 – Hayley Jacobs, Paige Adams, Dan Lawson, Gage Mitchell, Laura Freeman, Haley Smith. Learning Objectives. What are blue oceans? How do you create a blue ocean? Why are blue oceans important? What is value innovation?.

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Blue Ocean Strategy Chapter 1- Creating Blue Oceans

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  1. Blue Ocean StrategyChapter 1- Creating Blue Oceans Team 3 – Hayley Jacobs, Paige Adams, Dan Lawson, Gage Mitchell, Laura Freeman, Haley Smith

  2. Learning Objectives • What are blue oceans? • How do you create a blue ocean? • Why are blue oceans important? • What is value innovation?

  3. What are blue oceans? “Creating uncontested new market space that makes the competition irrelevant.”

  4. New Market Spaces

  5. Creation of Blue Oceans • Blue oceans have evolved over time • Standard Industrial Classification (SIC) system vs. • North American Industry Classification Standards (NAICS) system • Ten sectors into twenty • Service sector expanded into seven

  6. What Blue Oceans have been created in our lifetime?

  7. Rising Imperative of Creating Blue Oceans • Price vs. Brand Loyalty • Nike vs. Adidas • Technology innovation leads to supply exceeding demand • Shrinking profit margin

  8. From Company and Industry to Strategic Move • In Search of Excellence,Built to Last, and Creative Destruction • “Stable excellent visionary companies” tend to fall quickly • Strategic move: a move that delivers goods and services that opens and captures new market spaces • Strategic move is the unit of analysis for blue oceans • Blue oceans are in all industries • Not predominantly in any one industry according to the authors

  9. Value Innovation • Focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. • Value without Innovation is not sufficient • Innovation without Value is not considerate of buyers • ISQS 3344 - Tucker: The Man and His Dream

  10. What to Consider in Value Innovation Cost • The whole system • Differentiation and Low Cost – Blue Oceans use both strategies • Apple vs. HP Buyer Value Value Innovation

  11. Structuralistvs.Reconstructionist • Create new “best practice” • Breaks existing value-cost trade-off • Standard view of business • Contains standards and guidelines

  12. Conclusion • Blue Ocean Strategy will always contain both opportunity and risk • Managers are concerned about the risks and don’t take the opportunity • Red oceans will continue even as Blue Ocean Strategy becomes urgent

  13. Questions?

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