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Blue Ocean Strategy-Appendix A,B,C

This document explores key concepts of the Blue Ocean Strategy within the automotive sector, emphasizing value innovation linked to buyer needs. It contrasts structuralist and reconstructionist views of industry structure, highlighting the importance of recognizing market dynamics and the creation of demand. Historical examples, such as the impact of Henry Ford's assembly line and Japanese car manufacturers, illustrate how market strategies evolve. The content dives into monopolistic behavior, the significance of innovation, and the need to balance consumer welfare against competitive practices.

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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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