A Book Review On

BLUE OCEAN STRATEGY

By W Chan Kim and Renee Maoborgne

Presented By:
Ram Khandelwal
“How to create uncontested
market space and make the
competition irrelevant.”
The Strategy Canvas of US Wine Industry
in the Late 1990’s
The Eliminate-Reduce-Raise-Create-
Grid
 What is Blue Ocean Strategy?

A competitive strategy in which the competition is

made irrelevant through an approach that pursues
Differentiation & Low-cost, to open a previously un-
tapped or under-served market.
What do we Intend to do in
this strategy?
Value
Innovation:
The Corner
Stone of
Blue Ocean
Strategy
 Tool for Implementing Blue Ocean Strategy:
The Four Action Framework
Red Ocean Strategy Vs Blue Ocean Strategy
 Some Facts and Figures

In a Study Conducted on 108 companies:

1. 86% of the new business launches were in Red Ocean
and only 14% in the Blue Ocean.

2. Red Oceans provided 62% of Total Revenues but only

39% of Total Profits.

3. In contrast, Blue Oceans provided 38% of the Total

Revenues but it delivered 61% of TOTAL PROFITS!!!
 Formulating Blue Ocean Strategy:
The Six Principals of Blue Ocean Strategy
Formulation Principles Risk Factor
Reconstruct Market Boundaries Search Risk

Focus on the Big Picture, not on the numbers Planning Risk

Reach beyond existing demand Scale Risk

Get the Strategic Sequence Right Business Model Risk

Execution Principles Risk factor

Overcome key Organizational Hurdles Organizational Risk

Build Execution Strategy Management Risk

Sequence of Blue Ocean Strategy
Buyer utility

No-- Rethink

Yes

Price

No-- Rethink

Yes

Cost

No-- Rethink

Yes

Adoption

No-- Rethink

Yes

A Commercially
Viable Blue Ocean
Idea
 Operation of Blue Ocean Strategy in
Automobile Industry
Key Blue Ocean Blue Ocean Driven by At time of
Creations created by a new technology or creation, industry
entrant or value pioneering? attractive or
incumbent? unattractive?

Ford Model T New Entrant Value (mostly Unattractive

existing
technologies)

GM’s “car for Incumbent Value (some new Attractive

every purse and technologies)
purpose”

Japanese fuel- Incumbent Value (some new Unattractive

efficient cars technologies)

Chrysler minivan Incumbent Value (mostly Unattractive

existing
technologies)
“Man cannot discover new oceans unless he
has the courage to lose sight of the shore.”
Lord Chesterfield

Thank You