Blue Ocean Strategy

Prof. V.S. Bhakre Management Consultant & Visiting Faculty

Blue Ocean Strategy- Book

1. Best Seller across 5 countries. 2. Published in 40 languages. 3. Sold > than 2 Mio copies. 4. ~ 30 industries. 5. Against traditional strategic planning. Todays Blue tomorrows Red innovation continually.

Examples of Blue Ocean Strategy

1. Ford Model- T- Early 1900 car. 2. Swatch Swiss Quartz Watch. 3. Chinese Detergent - ~ 20% Cost of MNCs. 4. U.S Wine industry-.

5. Cirque du. Soleil-Circus (Children Blend of circus + Theatre (No animals).

6.Cavin Care Shampoo sachet Mr. Ranganathan. 7. Swachha- Tata Water filter. 8. Nirma HUL to copy as wheel. 9. Titan- Brand. Many more

Blue Ocean Strategy How to Win in the future?

1. Stop trying to beat competition.

2. Blue Ocean- Untapped market space & demand. Creation and opportunity for profitable growth.
3. Well beyond existing industries New Market space Uncontested. 4. Largely uncharted Put the clock forward by 25 years. 5. Value innovation. 6. Minimum risk & not Risk taking.

Red Ocean Strategy Case Study I

Fords Model T
1. 1908 200+ Auto makers.

2.Custom made - $ 2000.

3. Ordinary People Hardly could afford. 4. 200- Cos Competing to serve small % of customers.

Blue Ocean Strategy Case Study I

1.Blue Ocean Model T- $ 1250.

2. Mass produced Q intact.

3. Conveyor belt concept. 4. Any colour As long as its Black (-ve later). 5. Adoption of technology to increase productivity. Moral: Never bench mark UR-Self against competition. Competitor: Horse Driven coaches $ 350. Model T : Helped Ford Garner 61% Mkt. Share Vs 9% 1908. Rethinking Industry Boundaries.

Blue Ocean Strategy Case Study II B.O.S U.S Wine Industry 1. Price/Bottle of Wine. 2. Elite refined Image Medals won Art/Science of wine making. 3. Marketing Raise consumer awareness in a crowded market. 4. Encourage distributors/ retailers to give prominence to a brand.

5. Aging Q of wine.
6. Complexity and Sophistication of wine taste. 7. Diverse Range: Varieties of grapes and consumer preferences.

> 1600 wineries Same strategic profile.

High price; classic differentiation strategy- Low cost players?? Research : Customers can scarcely imagine. How to create uncontested market space.

Blue Ocean Strategy Case Study II B.O.S U.S Wine Industry Strategic profile broke from the competition.

Social Drink- Accessible to every one-Beer/Cocktail.

In the space 2/3 years fun/social drink: Emerged as the fastest growing brand. U.S/Australia. Surpassing the wines of France and Italy.

Need for aging Eliminated (Working Capital reduced)

Faster pay back for the wine produced.

Blue Ocean Strategy Swiss, Quartz Watch 1960 - 62,500 Mechanical Watch Makers. 1970 12,500 Mechanical Watch Makers.
Quartz Watch

Invented By Swiss How to Differentiate?? Italian SWISS Technology Fashion Design Swatch

Commercialized by Japan

LEGO Plastic Eng Skills SWISS QUARTZ WATCH @ 25 Euro

Diff from Japanese

Japanese cannot produce at this cost