20653023 Entry # 14

Blue Ocean Strategy: in details (cont’d)
Today let us talk about companies’ strategic planning process.
Research reveals that even knowing all paths to create blue ocean company still stays in red ocean due to its strategic planning process.
How does usual typical strategic plan look like?
Lengthy description of current industry conditions and the competitive situation; discussion of how to increase market share, capture new segments, or cut costs; outline of numerous goals and initiatives; full budget; graphs and spreadsheets.
How does process look like?
Out of mishmash of data provided by people from various departments who often have conflicting agenda and poor communication managers try to get some reasonable factors filling in boxes and running numbers.
Instead would not be that better to think outside the box and develop a clear picture of how to break competition?
To do that we should use the second principle of blue ocean strategy: Focus on the big picture, not the numbers.
Drawing a strategy canvas (for example of it plz refer to my first entry about Blue Ocean Strategy) for your company and using the Pioneer-Migrator-Settler (PMS) Map will let you to see how to break into the blue ocean.
Drawing a strategy canvas does three 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, identifying which factors they invest in strategically.
3. Shows the company’s strategic profile (value curve) depicting how it invests in the factors of competition and how it might invest in them in the future.
There are 4 steps of visualizing strategy:
1. Visual Awakening

• Compare your business with your competitors’ by drawing your “as is” strategy canvas
• See where your strategy needs to change

2. Visual Exploration

• Go into the field to explore the 6 paths to creating blue ocean
• Observe the distinctive advantages of alternative products and services
• See which factors you should eliminate, create, or change

3. Visual Strategy Fair

• Draw your “to be” strategy canvas based on insight from field observations
• Get feedback on alternative strategy canvases from customers, competitors’ customers and noncustomers
• Use feedback to build the best “to be” future strategy

4. Visual Communication

• Distribute your before-and-after strategic profiles on one page for easy comparison
• Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.

Another useful exercise to pursue profitable growth is to plot the company’s current and planned portfolios on a pioneer-migrator-settler (PMS) map.
Where pioneers are the business that offer unprecedented value (very significant, your blue oceans); settlers – businesses whose value curves conform to the basic shape of the industry’s; and migrators – businesses exend the industry’s curve by giving customers more for less, but they don’t alert its basic shape.
If both the current portfolio and the planned offerings consist mainly of settlers, the company has a low growth trajectory. If current and planned offerings consist of a lot of migrators, reasonable growth can be expected.