Questions before:

How do you analyze blue oceans?

How do those strategies differ from those of the red oceans?

What frameworks do you use to create and discover blue oceans?

Questions after:

Is the creation of blue ocean strategy creative or systematic?

Do companies actually follow the framework or do they think of the situation intuitively and then fit it in a blue ocean?

Main Points:

 Value curves are really important in Blue Ocean Strategy. You pretty much have a bar graph of the different value attributes of an industry, ranging from price, cost, customer service and so on. As you plot the different competitors, they will begin to converge onto a few different clusters. For example, for wines, there are budget wines and high end wines, which have their different value attributes. To have a strong Blue Ocean Strategy, when you plot your value curve, you should diverge from the competitors. But it’s also important to focus.  You don’t want to have an oscillating strategy among all the different value attributes

In addition, you want to ask the 4 questions:

1. What does your industry take for granted that are unnecessary?
2. What values can you go below the industry standard?
3. What values can you go above the industry standard?
4. What can you bring to the industry that has never been done before?

This ultimately leads to the action framework of Eliminate-Reduce-Raise-Create grid.

Cirque du Soleil

A good Blue Ocean strategy has 3 components: Focus, Divergence, and Tagline.

Traps include: Not enough differentiation, hence ending up in a red ocean. Lack of focus in strategy. Strategic Contradictions. Incoherent strategy.

General Notes:

Effective Blue Ocean Strategy should be about risk minimization and not risk taking.

8 principles of formulating and executing Blue Ocean Strategy.

They talked about the wine industry. Each year, there were 30 billion dollars in sales. Highly competitive, but the consumer base remain stagnant. US remained 31st place in wine consumption. How do you break out of this red ocean of bloody competition to make the competition irrelevant?