Yes, you can create new markets, or new space within a market. The thought of creating a new market is daunting to most people. You don’t have to create the next Apple, Amazon, or Uber to create your own space. Si2 can help you simplify the concept of creating a new market into something actionable and realistic. It can be as simple as creating space in your market where there are no
competitors, to filling a space between markets where unmet demand is. Blue Ocean Strategy is the leading methodology on how to find new market space where there is unmet customer demand. The concept and tools were created in 2004 by W. Chan Kim and Renée Mauborgne. Blue Ocean Strategy helps you create and capture uncontested market space, making
the competition irrelevant. The theory states that market boundaries and industry structures aren’t certainties. These boundaries and systems can be changed to meet the needs of new customers and create a leap in value for them. You create the rules for the new market space, not your past competitors.
“Red oceans” represent the current markets being fought over by competitors in
that space. Firms fight amongst each other in terms of price wars, new product features, marketing campaigns and more. These battles between companies turn the current market waters “red with blood”, hence the term red ocean. “Blue oceans” represent the vast, uncontested, market space that has not been explored by others. These blue oceans represent all of the unknown market space in existence. The Blue Ocean Strategy process is not about looking at your current customer
segments and market, but at looking at non-customers that have similar jobs-to-be-done as your current market. (Top image credited to Simon Associates Management Consultants. Bottom image credited to ClearPoint Strategy.) In Red Oceans companies focus on the existing market space and trying to beat thier competitors. Each competitor tries to take market share from the other in order to
grow. Firms usually have to decide if they want to be low-cost leaders, high-priced niche players, or in the middle just competing on beting better at sales and marketing. In Blue Oceans companies focuson creating new market space. They construct the rules of the maket that enable them to capture unmet demand. By doing this, firms can create a low-cost offering, but price it for a high margin because they are giving the new customer a leap in
value from thier previous solution. This can only be done by truly understanding the unmet needs of the customer and how you can fill those better than the existing alternatives. The key tool in the Blue
Ocean Strategy journey is the Strategy Canvas. It depicts your ‘value curve’ compared to your key competitors in your current industry. The goal is to be objective and compare your product/service on the factors you think you compete on now. Si2 has adapted the Strategy Canvas from Kim & Maurborgne into the Value Curve Canvas. The canvas helps you focus on the jobs, pains, and gains that the non-customers have that you are targeting. The concept of
jobs-to-be-done will be included in the process and you can find more about it below. The goal of the journey is to identify non-customers that have needs (jobs to be done) that you can solve by slightly changing what your offer focuses on. We can only discover and validate what is most important to this new market by talking with them and observing them. We can then eliminate a few factors that this new customer segment does not need, reduce or increase our focus on specific factors, and create new features that are critical to this new segment. Blue Ocean Strategy ExamplesCirque du Soleil competes against other circuses. By examining the competing factors that are most important to the new customer segment they were targeting, they were able to change the value curve significantly from the other competitors. They lowered costs, while at the same time increasing ticket prices due to the value they provided. Uber did not try to disrupt the taxi industry. That was just collateral damage. They set out to solve the problem of getting non-taxi goers from point A to point B. They changed the experience by using technology to engage with the customer. Uber also lowered their costs by using the drivers own vehicle. Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings. Creating New Market SpaceGather Insights On Jobs-To-Be-Done
Reconstruct Market Boundaries
Reduce & Elimate Costs
Prioritize & Create To Add Value
Blue Ocean Strategy Workshop Outcomes
Additonal Tools Used in Blue Ocean WorkshopsBusiness Model DesignBusiness models must be created for any new idea or market. We will use the Business Model Canvas to document and design your new Blue Ocean idea. Learn more Testing Business IdeasHow do you know what customers want? How do you know which features to add or eliminate? Testing helps you reduce the risk of investing in business models that might not work out, while also helping you find the best route to growth. Learn more Jobs To Be DoneYou need to understand your customer’s problems better than they do. To solve problems, customer’s ‘hire’ products and services to “get a job done!” Learn more Brian is one of the leading Blue Ocean Strategists in the US. He has been trained by the Blue Ocean Academy and has spent years researching Blue Ocean Strategy.
What is Blue Ocean Strategy quizlet?Blue ocean strategy. The simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.
Which of the following best explains why a Blue Ocean Strategy?Answer and Explanation: The correct option is B) It requires the reconciliation of fundamentally different strategic positions differentiation and low cost. The Blue Ocean strategy uses a product in a market where there are no or very few competitors.
What are the 4 most important cost drivers that managers can manipulate to keep their costs low are?important cost drivers that managers can manipulate to keep their costs low (4): cost of input factors. economies of scale. learning-curve effects.
What is the key to successfully implementing a Blue Ocean Strategy quizlet?a blue ocean strategy is only successful if the firm can... implement some type of value innovation that reconciles the inherent trade-off between value creation and underlying costs. two fundamentally different generic business strategies.
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