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BlueOceanStrategy,W.ChanKimandReneeMaubourgneEditedbyChitchaiP.,GJI,pchitchai,2,Agenda,BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworksFormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRightExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusion,GJI,pchitchai,3,Agenda,BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworksFormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRightExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusion,BlueOceanStrategy(BOS),GJI,pchitchai,4,CreatingBlueOcean,NewMarketSpaceTheContinuingCreationofBlueOceansTheImpactandImperativeofCratingBlueOceansFromCompanyandIndustrytoStrategicMoveValueInnovation:TheCornerstoneofBOSTheSixPrinciplesofBOS,GJI,pchitchai,5,ImpactofCreatingBlueOceans,ProfitandGrowthConsequenceFigure(TBA),GJI,pchitchai,6,ValueInnovation:TheCornerstoneofBOS,Costs,BuyerValue,ValueInnovation,TheSimultaneousPursuitofDifferentiationandLowCost,GJI,pchitchai,7,RedOceanvs.BlueOceanStrategy,RedOceanStrategy,Competeinexistingmarketspace,Beatthecompetition,Exploitexistingdemand,Makethevalue-costtrade-off,Alignthewholesystemofafirmsactivitieswithitsstrategicchoicesofdifferentiationorlowcost,Focusesonadaptingtoexternaltrendsastheyoccur,Createuncontestedmarketspace,Makethecompetitionirrelevant,Createandcaptureuntappeddemand,Breakthevalue-costtrade-off,Alignthewholesystemofafirmsactivitiesinpursuitofdifferentiationandlowcost,Participatesinshapingexternaltrendsovertime,BlueOceanStrategy,GJI,pchitchai,8,TheSixPrinciplesofBOS,ExecutionPrinciplesOvercomekeyorganizationhurdlesBuildexecutionintostrategy,RiskFactorEachPrincipleAttenuatesOrganizationriskManagementrisk,FormulatingPrinciplesReconstructmarketboundariesFocusonthebigpicture,notthenumbersReachbeyondexistingdemandGetthestrategicsequenceright,RiskFactorEachPrincipleAttenuatesSearchriskPlanningriskScaleriskBusinessmodelrisk,GJI,pchitchai,9,AnalyticalToolsandFrameworks,StrategyCanvasFourActionsFrameworkEliminate-Reduce-Raise-CreateGridThreeCharacteristicsofaGoodStrategy,GJI,pchitchai,10,StrategyCanvasUSWineIndustryinthelate1990s,High,Price,Low,PremiumWines,BudgetWines,Winerange,Winecomplexity,Vineyardprestige,Agingquality,Above-the-linemarketing,Useofenologicalterminologyanddistinctionsinwinecommunication,GJI,pchitchai,11,FourActionsFramework,REDUCEWhichfactorsshouldbereducedwellbelowtheindustrysstandards?,CREATEWhichfactorsshouldbecreatedthattheindustryhasneveroffered?,ELIMINATEWhichofthefactorsthattheindustrytakeforgrantedshouldbeeliminated?,RAISEWhichfactorsshouldberaisedwellabovetheindustrysstandard?,ANewValueCurve,GJI,pchitchai,12,Eliminate-Reduce-Raise-CreateGridCaseStudy:YellowTail,ReduceWinecomplexityWinerangeVineyardprestige,CreateEasydrinkingEaseofselectionFunandadventure,EliminateEnologicalTerminologyAgingqualitiesAbove-the-lineMarketing,RaisePriceversusbudgetwinesRetailstoresinvolvement,GJI,pchitchai,13,ANewValueCurveStrategyCanvasofYellowTail,High,Price,Easydrinking,Easeofselection,Low,PremiumWines,yellowtail,BudgetWines,Funandadventure,Winerange,Winecomplexity,Vineyardprestige,Agingquality,Above-the-linemarketing,Useofenologicalterminologyanddistinctionsinwinecommunication,CREATE,REDUCE,ELIMINATE,RAISE,GJI,pchitchai,14,StrategyCanvas:SouthwestAirlines,High,Price,Meals,Lounges,Seatingclasschoice,Hubconnectivity,FriendlyService,Speed,FrequentPint-to-pointdeparture,Low,AverageAirlines,SouthwestAirlines,CarTransport,GJI,pchitchai,15,StrategyCanvas:CirqueduSoleil,High,Price,Starperformers,Animalshows,Multipleshowarena,Funandhumor,Thrillandchallenge,Uniquevenue,Theme,Low,RinglingBros.&Barnum&Bailey,CirqueduSoliel,SmallerRegionalCircuses,Refinedwatchingenvironment,MultipleProduction,Artisticmusicanddance,Aisleconcessions,GJI,pchitchai,16,ThreeCharacteristicsofaGoodStrategy,FocusDivergenceCompellingTagline,GJI,pchitchai,17,Agenda,BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworksFormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRightExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConclusion,FormulatingBlueOceanStrategy,GJI,pchitchai,18,ReconstructMarketBoundaries,Path1:LookAcrossAlternativeIndustriesPath2:LookAcrossStrategicGroupswithinIndustriesPath3:LookAcrossChainofBuyersPath4:LookAcrossComplementaryProductsandServiceOfferingsPath5:LookAcrossFunctionalorEmotionalAppealtoBuyersPath6:LookAcrossTime,GJI,pchitchai,19,StrategyCanvas:NetJetsPath1:AlternativeIndustry,High,Price(fixedpurchase+variablepriceperflight),Needforcustomertomanageaircraft(AircraftM&A),Deadheadcosts,Speedoftotaltraveltime,Easeoftravel(include.Check-in,customs,etc.,Flexibilityandreliability,In-flightservice,Low,PrivateJetCorporatetravel,NetJetsValueCurve,CommercialAirlinesFirstandBusiness-Classestravel,GJI,pchitchai,20,StrategyCanvas:QuickFitPath2:StrategicGroup,High,Price,Amenities,Workoutequipment(treadmill,weights,etc),Workouttime,Availabilityofinstructors,Environmentencouragingdisciplineandmotivationinexercise,Nonthreateningsame-sexEnviron-ment,Convenience,Low,Traditionalhealthclubs,Curves,HomeExerciseProgram,Womanlyfunatmos-phere,GJI,pchitchai,21,StrategyCanvas:NovoPenPath3:BuyerGroup,GJI,pchitchai,22,StrategyCanvas:NABIPath4:ScopeofProduct/ServiceOfferings,High,Initialpurchaseprice,Corrosion,Maintenancecost,Fuelconsumption,Environmentalfriendliness,Aestheticdesign,Customerfriendliness,Low,AverageUSTransitBus,NABIHungarianMunicipalBusCompany,Life-CycleCost,GJI,pchitchai,23,StrategyCanvas:QBHousePath5:Functional/EmotionalOrientation,High,Price,Reservationdesk,Extraservices(otherthanhaircutting),Rangeofhairtreatments,Hygiene,Timesavingsonwaiting,Timesavingsonhaircut,Highperformance”airwash”system,Low,AverageJapaneseBarbershop,QBHouse,GJI,pchitchai,24,StrategyCanvas:iTunes/CiscoPath6:Time,GJI,pchitchai,25,Summary:ConceivingNewMarketSpace,Head-to-HeadCompetition,Industry,StrategicGroup,BuyerGroup,ScopeofProductorServiceOffering,FunctionalEmotionalOrientation,Time,Focusesonrivalswithinitsindustry,Focusesoncompetitivepositionwithinstrategicgroup,Focusesonbetterservingthebuyergroup,Focusesonmaximizingthevalueofproductandserviceofferingwithintheboundsofitsindustry,Focusesonimprovingpriceperformancewithinthefunctional-emotionalorientationofitsindustry,Focusesonadaptingtoexternaltrendsastheyoccur,GJI,pchitchai,26,FocusonBigPicture,FourStepsofVisualizingStrategyThePioneer-Migrator-SettlerMap,GJI,pchitchai,27,FourStepsofVisualizingStrategy,VisualAwakening,VisualExploration,VisualStrategyFair,VisualCommunication,Compareyourbusinesswithyourcompetitorsbydrawingyour“asis”strategycanvas.Seewhereyourstrategyneedstochange.,Gointothefieldtoexplorethesixpathstocreatingblueoceans.Observethedistinctiveadvantagesofalternativeproductsandservices.SeewhichfactorsyoushouldEliminate,Raise,Create,orChange.,Drawyourtobe”strategycanvasbasedoninsightsfromfieldobservations.Getfeedbackonalternativestrategycanvasesfromcustomers,competitorscustomer,andnon-customers.Usefeedbacktobuildthebest“tobe”futurestrategy.,Distributeyourbefore-and-afterstrategicprofilesononepageforeasycomparison.Supportonlythoseprojectsandoperationalmovesthatallowyourcompanytoclosethegapstoactualizethenewstrategy.,GJI,pchitchai,28,ThePMSMap,Pioneers,Migrators,Settlers,Today,Tomorrow,GJI,pchitchai,29,ReachBeyondExistingDemand,FirstTier:“Soon-to-be”non-customerswhoareontheedgeofyourmarket,waitingtojumpshipSecondTier:“Refusingnon-customerswhoconsciouslychooseagainstyourmarket.ThirdTier:“Unexplored”noncustomerswhoareinmarketsdistantfromyours.,FirstTier,SecondTier,ThirdTier,GJI,pchitchai,30,GettheStrategicSequenceRight,BuyerUtility,Price,Cost,Adoption,CommerciallyViableBlueOceanIdea,NO,Isthereexceptionalbuyerutilityinyourbusinessidea?,Isyourpriceeasilyaccessibletothemassofbuyers?,NO,Canyouattainyourcosttargettoprofitatyourstrategicprice?,NO,Whatareadoptionhurdlesinactualizingyourbusinessidea?Areyouaddressingthemupfront?,NO,GJI,pchitchai,31,BuyerUtilityMap,TheSixUtilityLevels,TheSixStagesoftheBuyerExperienceCycle,Howlongtofindtheproductyouneed?,Istheplaceofpurchaseattractiveandaccessible?,Howsecureisthetransactionenvironment?,Howrapidlycanyoumakeapurchase?,Howlongtogettheproductdelivered?,Howdifficulttounpackandinstallthenewproduct?,Dobuyershavetoarrangedeliverythemselves?Ifyes,howcostlyanddifficultisthis,Trainingorexpertiseassistancerequired?,Easytostorewhennotinused?,Howeffectivearefeaturesandfunctions?,Overchargedwithbellandwhistles?,Needotherproductstomakeitwork?,Ifso,howcostlyarethey?,Howmuchtimedotheytake?,Howmuchpaindotheycause?,Howeasyaretheytoobtain?,RequireexternalME,Howeasytomaintainandupgrade?,Howcostly?,Createwaistitems?,Howeasytodispose?,Legalorenvironmentalissueoftheproductdisposal?,Howcostly?,GJI,pchitchai,32,PriceCorridoroftheMass,IdentifythePriceCorridorofthemass,SpecifyaPriceLevelwithinthePriceCorridor,Threealternativeproduct/servicetypes:,PriceCorridoroftheMass,HighdegreeoflegalandresourceprotectionDifficulttoImitate,Somedegreeoflegalandresourceprotection,LowdegreeoflegalprotectionEasytoImitate,GJI,pchitchai,33,ProfitModelofBOS,TheTargetProfit,TheStrategicPrice,TheTargetCost,PricingInnovation,StreamliningandCostInnovative,Partnering,GJI,pchitchai,34,Adoption,EmployeesPartnersGeneralPublic,GJI,pchitchai,35,Agenda,BlueOceanStrategy(BOS)CreatingBlueOceanAnalyticalToolsandFrameworksFormulatingBlueOceanStrategyReconstructMarketBoundariesFocusonBigPictureReachBeyondExistingDemandGetStrategicSequenceRightExecutingBlueOceanStrategyOvercomeKeyOrganizationHurdlesBuildExecutionintoStrategyConcl
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