Blue Ocean Strategy EMBA(NCKU) Presentation Mark A. Hsu / Professor Yeh Chih-Chung May, 2007

Transcription

1 Blue Ocean Strategy EMBA(NCKU) Presentation Mark A. Hsu / Professor Yeh Chih-Chung May, /2/2 1

2 Presentation Overview 1. Classic Competitive Strategy 2. Blue Ocean Strategy Value Curves Six Paths 3. Example: Cirque du Soleil 4. Q&A 2007/2/2 2

3 Classic Competitive Strategy Strategic Focus Strategic Goal Analytic Tools Choosing attractive industries and building competitive positions within them Outperforming the competition Porter s 5 Forces Value Chain Generic Strategies 2007/2/2 3

4 Porter s Five Forces 2007/2/2 4

5 Kim and Mauborgne on Value Innovation 1. Value Innovation: The strategic Logic of High Growth, Harvard Business Review (1997) 2. Creating New Market Space, HBR (1999) 3. Knowing a Winning Business Idea When You See One, HBR (2000) 4. Charting Your Company s Future, HBR (2002) 2007/2/2 5

6 Value Curves A value curve is a graphic depiction of the way a company configures its offerings to customers. It is drawn by plotting the performance of the offering relative to other alternatives along the key success factors that define competition in the industry or category. For example: 2007/2/2 6

7 How Do You Discover New Value Curves? Raise What factors should be raised well beyond the industry standard? WTP Create What factors should be created that the industry has never offered? Eliminate What factors should be eliminated that the industry has taken for granted? Cost The Key to Discovering a New Value Curve Lies in Asking Four Basic Questions Reduce What factors should be reduced well below the industry standard? 2007/2/2 7

8 Value for Whom? One can use value curves for a variety of partners: End users Distribution channels Suppliers including employees Suppliers of complements 2007/2/2 8

9 Employee Value Curves High WAL MART Average Industry Average Low Success Factors Union protections Slack Quality of coworkers Empowerment 2007/2/2 9 Management Respect Corporate image Profit sharing Wage

10 An Alternative Approach Strategic Focus Strategic Goal Competitive Strategy Choosing attractive industries and building competitive positions within them Outperforming the competition Value Innovation Redefining industry boundaries and creating new market space Making the competition irrelevant Analytic Tools Porter s 5 Forces Value Chain Generic Strategies Value Curves 6 Paths 2007/2/2 10

11 2007/2/2 11

12 Key Dimensions of Competition? Food Acts Animals Comedy/Clowns 2007/2/2 12

13 Strategic Groups? 2007/2/2 13

14 Ringling Brother s Revenues 2007/2/2 14

15 Traditional Circus Industry 2007/2/2 15

16 Cirque du Soleil 2007/2/2 16

17 2007/2/2 17

18 Cirque du Soleil Programs 2007/2/2 18

19 Questions for Reflections In comparison with a conventional circus as you know it 1. What are the elements totally eliminated here? 2. What are the key elements kept here? Which of them are raised and which are reduced? 3. What are the elements created here and where do these newly introduced elements come from? 4. How does Cirque du Soleil create profitable growth? 2007/2/2 19

20 Eliminated Elements Animals Ring Master Stars Language Aisle concession sales Is it still a circus? 2007/2/2 20

21 Kept Elements Acrobatics Music Clowns Tent (important for keeping circus image) Audience Participation Seating Magic Exotic Feel PRICE 2007/2/2 21

22 Created Elements Theme / Story Dance Lighting Singing Programs Intellectual, artistic orientation Where do these elements come from? 1. Adult Focus (Children or Parent?) 2. Substitute: Broadway show, Ballet, Opera 2007/2/2 22

23 Profitable Growth High WTP by targeting adult and corporate High Volume: Different Shows Global Product (no Language) Traveling / Flexible Location Low Cost: No animals (40% Cost) No Stars Global sourcing (China, East Europe) Some cost additions because of target customers; e.g. seating 2007/2/2 23

24 Cirque du Soleil Value Curve 2007/2/2 24

25 Cirque du Soleil Attendance 2007/2/2 25

26 Revenues Less likely to see competitive response from RBBB 2007/2/2 26

27 The Founder 2007/2/2 27

28 Where to look Inspiration for successful new strategies may be closer than you think: New market space can be created by combining known elements in new ways However, it requires challenging conventional industry wisdom and thinking about competition and customers in new ways The Six Paths framework offers a systematic way to search for new inspiration 2007/2/2 28

29 Looking Across Competing Offers Six Paths 1. Why do customers buy substitute ( 代替品 ) offers? (1) Cirque du Soleil takes musical score and theme from ballet and theater (2) Low-cost airlines (Southwest, easyjet) take elements from other transport 2. Why do customers buy from other strategic groups? (1) Cirque du Soleil takes tent from small time circuses (Cost leader) (2) Ralph Lauren / Polo combines haute couture and classical lines 2007/2/2 29

30 Looking Across Customers 3. Are we too focused on one part of the chain of buyers? (1) Are we ignoring the user, influencer or payer? (2) Cirque du Soleil shifts emphasis from kids to adults (payer) 4. What are the important complements?( 輔助品 ) (1) IKEA offers childcare, restaurant (2) B&N offers places to read books (couches, cafe) 5. Can we reverse the industries functional/emotional focus? (1) Swatch, Dyson (vacuum cleaner) : from functional to emotional (2) Bodyshop: from emotional to functional 2007/2/2 30

31 Exploiting Key Time Trends 6. What are the important time trends in the industry? For example: (1) Technology (e.g wireless broadband; free processing and storage) (2) Social changes (edge of town retail and IKEA; aging populations) (3) Customer learning (digital literacy) 2007/2/2 31

32 An Alternative Approach Strategic Focus Strategic Goal Competitive Strategy Choosing attractive industries and building competitive positions within them Outperforming the competition Value Innovation Redefining industry boundaries Creating new market space Making the competition irrelevant Analytic Tools Porter s 5 Forces Value Chain Generic Strategies Value Curves 6 Paths 2007/2/2 32

33 Envision Study Group Example 2007/2/2 33

34 Blue Ocean Strategy Casella Wines Yellow tail > 2007/2/2 34

35 Callaway Big Bertha 2007/2/2 35

36 Swiss Watch 2007/2/2 36

37 Q & A 謝謝指教! 2007/2/2 37