20653023 Entry # 12

Blue Ocean Strategy: in details
We've mentioned Blue Ocean Strategy on our classes. And it prompted me to read more about it. Below you can find some principles, frameworks, and characteristics related to Blue Ocean.
But at first, let us define what Red Ocean Strategy vs. Blue Ocean Strategy are about:

1. Compete in existing market space vs. Create uncontested market space
2. Beat the competition vs. Make the competition irrelevant
3. Exploit existing demand vs. Create and capture new demand
4. Make the value-cost trade-off vs. Break the value-cost trade-off
5. Align the whole system of a firm's activities:
   with its strategic choice of differentiation or low cost vs. in pursuit of differentiation and low cost
   
   

Critical question for strategists is, How do you break out of red ocean of bloody competition to make the competition irrelevant? How do you open up and capture a blue ocean of uncontested market space?
And there is an analytic framework, called the strategy canvas. First, it captures the current state of play in the known market space. Second, it allows to understand where the competition is currently investing, the factors the industry currently competes on in products, service, and delivery, and what customers receive from the existing competitive offerings on the market.

Second basic analytic is the four actions framework: there are 4 key questions to challenge an industry’s strategic logic and business model:
1. Which of the factors that the industry takes for granted should be eliminated?
2. Which factors should be reduced well below the industry’s standard?
3. Which factors should be raised well above the industry’s standard?
4. Which factors should be created that the industry has never offered?

And the third key tool which is supplementary analytic to the four action framework: eliminate-reduce-raise-create grid. It basically organize previous questions in grid with 4 cells.

And the last one: 3 Characteristics of a Good Strategy
Focus
Every great strategy has focus, and a company’s strategic profile should clearly show it.
Divergence
To open up a blue ocean, it’s necessary to differentiate your company from overall trends within the industry.
Compelling Tagline
A good strategy has s clear-cut and compelling tagline, which must not only deliver a clear message but also advertise an offering truthfully.