Blue Ocean Strategy Principles to Know for Business Strategy and Policy

Blue Ocean Strategy focuses on creating new market spaces where competition is irrelevant. By emphasizing value innovation and the simultaneous pursuit of differentiation and low cost, businesses can unlock new demand and foster sustainable growth in their industries.

1. Value Innovation

   • Focuses on creating new value for customers while reducing costs.
   • Aims to break the trade-off between differentiation and low cost.
   • Drives companies to innovate in ways that make competition irrelevant.

2. Simultaneous Pursuit of Differentiation and Low Cost

   • Encourages businesses to pursue both differentiation and cost leadership simultaneously.
   • Helps to create a unique market position that attracts a broader customer base.
   • Reduces the risk of being trapped in a competitive market.

3. Creating Uncontested Market Space

   • Involves identifying and developing new markets where competition is minimal or non-existent.
   • Focuses on innovation that meets unaddressed customer needs.
   • Allows companies to capture new demand and create new opportunities.

4. Four Actions Framework (Eliminate-Reduce-Raise-Create Grid)

   • Guides organizations in rethinking their value propositions.
   • Encourages the elimination of factors that the industry takes for granted.
   • Promotes reducing, raising, and creating elements to enhance customer value.

5. Strategy Canvas

   • A visual tool that depicts the current state of play in the market.
   • Helps identify the factors that drive competition and customer choice.
   • Aids in visualizing how a company can differentiate itself from competitors.

6. Six Paths Framework

   • Provides a systematic approach to exploring new market opportunities.
   • Encourages looking across alternative industries, strategic groups, buyer groups, and complementary products.
   • Helps identify new value curves and potential blue oceans.

7. Reconstructing Market Boundaries

   • Involves redefining the boundaries of existing markets to discover new opportunities.
   • Encourages thinking beyond traditional industry definitions and customer segments.
   • Aims to create new demand by exploring overlooked areas.

8. Focus on the Big Picture, Not the Numbers

   • Emphasizes the importance of strategic vision over mere financial metrics.
   • Encourages leaders to prioritize long-term value creation and innovation.
   • Helps organizations avoid getting bogged down in short-term performance indicators.

9. Reach Beyond Existing Demand

   • Focuses on attracting non-customers and expanding the market.
   • Encourages understanding the needs and preferences of potential customers.
   • Aims to create new demand by addressing the pain points of non-customers.

10. Get the Strategic Sequence Right

    • Involves ensuring that the strategy is aligned with the right sequence of actions.
    • Focuses on creating a compelling product or service before scaling.
    • Aims to ensure that the value proposition resonates with target customers.

11. Overcome Key Organizational Hurdles

    • Identifies and addresses internal barriers to implementing blue ocean strategies.
    • Encourages fostering a culture of innovation and collaboration.
    • Aims to align resources and capabilities with strategic goals.

12. Build Execution into Strategy

    • Emphasizes the importance of integrating execution into the strategic planning process.
    • Encourages clear communication and alignment of goals across the organization.
    • Aims to ensure that strategies are actionable and measurable.

13. Non-disruptive Creation

    • Focuses on creating new markets without displacing existing ones.
    • Encourages innovation that complements rather than competes with current offerings.
    • Aims to foster sustainable growth by expanding the overall market.

14. Three Tiers of Noncustomers

    • Identifies three categories of noncustomers: soon-to-be, refusing, and unexplored.
    • Encourages businesses to understand the reasons behind non-consumption.
    • Aims to develop strategies that convert noncustomers into customers.

15. Fair Process (Engagement, Explanation, Expectation Clarity)

    • Emphasizes the importance of involving stakeholders in the strategy formulation process.
    • Encourages transparent communication and clarity of expectations.
    • Aims to build trust and commitment among employees and stakeholders.