Question

In this challenge, you’ll be using your critical and creative dimensions of 4-DS thinking. In this exercise use the Strategic Canvas and Four Actions Framework to see if you can identify a Blue Ocean within or outside an existing Red Ocean. First, provide your Strategy Canvas and in detail explain the significance of the factors in your Strategy Canvas. Then, proceed to use the Four Action Framework to identify a potential Blue Ocean. What does your Blue Ocean look like? Is it competitive free?

Answer 1

Blue Ocean strategy shapes strategic structure to create new demand and generate high growth for the company. To create such a strategy, there are a set of analytical tools and frameworks used in formulating and executing it. The first and foremost tool in value innovation and creation of blue ocean strategy is the strategy canvas.

Also known as Snake Plot, the basic component of strategy canvas is value curve that is nothing but a graphical form of company & competition’s current state of play in the known market. This mapping makes us understand where the competition is currently focusing, the factors that the industry competes in selling its products, service and delivery and what the customers receive from the existing competitive offering on the market. Strategy canvas helps us to reconstruct the buyer value essentials by questioning its existing industry’s strategy and business model by shifting our focus from competitors to alternatives and from customers to noncustomers of the industry thus making a trade-off between value and cost. It tells the story in one page.

The horizontal axis captures the key factors the industry competes on and invests in. The vertical axis of the strategy canvas is a rating scale that captures the current state of play of key competing factors

Key factors are those value creating components a company invests in resources, processes and capabilities and involves strategic choices and impacts strategic purpose. To know the key elements the team has to do extensive research and analysis within the organization as well as outside, interactions with customers about the product, service and delivery. After determining the key elements, the team has to give rating to these elements. The rating given may be relatively low, low, medium, high, relatively high etc. The rating given to each key factor must be fair and unbiased

Red Ocean Strategy

•             Compete in existing market space.

•             Beat the competition.

•             Exploit existing demand.

•             Make the value-cost trade-off.

Blue Ocean Strategy

•             Create uncontested market space.

•             Make the competition irrelevant.

•             Create and capture new demand.

•             Break the value-cost trade-off.

•             Align the whole system of a firm’s activities in pursuit of differentiation and low cost.

Four Actions Framework for New Value Curve are as below:

•             Raise: Which factors should be raised well above the industry’s standard?

•             Create: Which factors should be created that the industry has never offered?

•             Reduce: Which factors should be reduced well below the industry’s standard?

•             Eliminate: Which factors that the industry has long competed on should be eliminated?