Tse blue ocean_strategy_modified2014
Download as PPT, PDF0 likes514 views
The document discusses the concepts of "Red Oceans" and "Blue Oceans" in business. It provides examples and tools to help find "Blue Oceans", or new market spaces with uncontested demand. Specifically, it summarizes how the Australian wine company Casella Wines was able to break into the crowded US wine market by creating a "Blue Ocean". They mapped the existing competitive factors wine producers competed on (price, packaging, marketing etc.) and eliminated or reduced competing on those factors. Instead, they raised and created new factors like ease of purchase and an image of fun and adventure to attract new wine drinkers, carving out a new, uncontested market space. This approach led
![Value innovation example:
[yellow tail]
Australian vineyard Casella Wines
sought a way to increase US sales in a
hugely crowded and competitive industry
space with falling margins
The US Wine market –
hardly attractive
Copyright of Bart Clarysse and Sabrina Kiefer
The Smart Entrepreneur](https://image.slidesharecdn.com/tseblueoceanstrategymodified2014-141127122431-conversion-gate02/85/Tse-blue-ocean_strategy_modified2014-7-320.jpg)
![[yellow tail] – 1 and 2
1. Industry Strategy Canvas
• Price, packaging, above the line marketing, aging quality, prestige of the
vineyard, complexity of taste, diverse range of wines
2. Four actions framework - observations
• Wine was only accessible to a limited number of people + takes years to
appreciate wine
• French and worldwide producers were all competing on the factors on
the strategy canvas, bringing down margins
• Blue Ocean: not competing on wine market, but on the alternative
market for beers, spirits and cocktails
>> Create a new market of new wine drinkers
Copyright of Bart Clarysse and Sabrina Kiefer
The Smart Entrepreneur](https://image.slidesharecdn.com/tseblueoceanstrategymodified2014-141127122431-conversion-gate02/85/Tse-blue-ocean_strategy_modified2014-17-320.jpg)
![[yellow tail] - 3
3. The eliminate-reduce-raise-create grid
• Eliminated
» Enological terms on wine packaging,
» above the line marketing – (replace with in-store merchandising)
» aging quality
» => costs and working capital declined
• Reduced
» Vineyard prestige,
» complexity of taste and range (2 products: Chardonnay and Shiraz)
• Raised
» Price versus budget wines,
» retail store involvement (display stands, merchandised clothing for staff)
• Created
» 3 new factors: easy drinking, easy to select, and ‘fun and adventure’ image of
Australia
Copyright of Bart Clarysse and Sabrina Kiefer
The Smart Entrepreneur](https://image.slidesharecdn.com/tseblueoceanstrategymodified2014-141127122431-conversion-gate02/85/Tse-blue-ocean_strategy_modified2014-18-320.jpg)
![[yellow tail] value line vs US wine industry
Copyright of Bart Clarysse and Sabrina Kiefer
The Smart Entrepreneur](https://image.slidesharecdn.com/tseblueoceanstrategymodified2014-141127122431-conversion-gate02/85/Tse-blue-ocean_strategy_modified2014-21-320.jpg)
![[yellow tail] - Results
Copyright of Bart Clarysse and Sabrina Kiefer
The Smart Entrepreneur](https://image.slidesharecdn.com/tseblueoceanstrategymodified2014-141127122431-conversion-gate02/85/Tse-blue-ocean_strategy_modified2014-22-320.jpg)
Tse blue ocean_strategy_modified2014
- 1. Business Model Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 2. Blue Oceans = value innovation (a new market space within mature industry) • Compete in existing market space • Beat the competition head-on • Exploit existing demand • Make the value/cost trade off • Create uncontested market space • Make competition irrelevant • Create and capture new demand • Break the value/cost trade off Red Oceans (most businesses) Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 3. Business Launches 86% 14% Revenue Impact 62% 38% Profit Impact 39% 61% Me-too & Value Improvement Pioneer, Innovation in Customer Value • Why seek Value Innovation? 14% of firms in a ‘Blue Ocean’ space 61% of overall profits (Kim’s & Mauborgne’s observation of 108 companies over a 100-year period) Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 4. Tools to find Blue Oceans A The Strategy Canvas: captures the current state of play in the known market space; reorients focus from competitors to alternatives and from customes to non customers the range of factors the industry competes on and invests in the offering level that buyers receive across all of these key competing factors. Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 5. B Four actions framework (observations): Factors that no longer are valuable to potential customers are avoidable costs Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 6. B Eliminate-reduce-raise-create grid Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 7. Value innovation example: [yellow tail] Australian vineyard Casella Wines sought a way to increase US sales in a hugely crowded and competitive industry space with falling margins The US Wine market – hardly attractive Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 8. Casella Wines’ value innovation 1. What did the US wine industry strategy canvas look like (on what factors were producers competing)? Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 9. US wine industry - Factor 1: price Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 10. US wine industry - Factor 2: labelling for connoisseurs Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 11. US wine industry - Factor 3: mass media advertising Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 12. US wine industry - Factor 4: aging quality – age=better Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 13. US wine industry - Factor 5: heritage = prestige Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 14. US wine industry - Factor 6: complex bouquet = desirable product Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 15. US wine industry - Factor 7: wide product range = better label Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 16. The US Wine Industry – strategy canvas Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 17. [yellow tail] – 1 and 2 1. Industry Strategy Canvas • Price, packaging, above the line marketing, aging quality, prestige of the vineyard, complexity of taste, diverse range of wines 2. Four actions framework - observations • Wine was only accessible to a limited number of people + takes years to appreciate wine • French and worldwide producers were all competing on the factors on the strategy canvas, bringing down margins • Blue Ocean: not competing on wine market, but on the alternative market for beers, spirits and cocktails >> Create a new market of new wine drinkers Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 18. [yellow tail] - 3 3. The eliminate-reduce-raise-create grid • Eliminated » Enological terms on wine packaging, » above the line marketing – (replace with in-store merchandising) » aging quality » => costs and working capital declined • Reduced » Vineyard prestige, » complexity of taste and range (2 products: Chardonnay and Shiraz) • Raised » Price versus budget wines, » retail store involvement (display stands, merchandised clothing for staff) • Created » 3 new factors: easy drinking, easy to select, and ‘fun and adventure’ image of Australia Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 19. Smaller product range, simpler labelling Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 20. In-store merchandising Retail store involvement Wal-Mart displays Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 21. [yellow tail] value line vs US wine industry Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 22. [yellow tail] - Results Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
- 23. Further Reading Kim, W.C. and Mauborgne, R., 2005. Blue Ocean Strategy: How to Create uncontested Market Space and Make the Competition Irrelevant. Boston: Harvard Business School Press. Copyright of Bart Clarysse and Sabrina Kiefer The Smart Entrepreneur
Editor's Notes
- #19: Put Kangaroo on it instead of enological terms Retail store involvement: made retail shop employees embassadors by giving them Australian outback clothing + wine they did not feel intimidated by => recommended the wine