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Overview[ edit ] Based on a study of strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that companies can succeed by creating "blue oceans" Positioning map for starbucks uncontested market space, as opposed to "red oceans" where competitors fight for dominance, the analogy being that an ocean full of vicious competition turns red with blood.
The first part presents key concepts of blue ocean strategy, including Value Innovation — the simultaneous pursuit of differentiation and low cost — and key analytical tools and frameworks such as the strategy canvas and the four actions framework.
The four actions framework aids in eliminating the trade-off between differentiation and low cost within a company. The four actions framework consists of the following: This questions which factors must be raised within an industry in terms of product, pricing or service standards.
This questions which areas of a company or industry could be completely eliminated to reduce costs and to create an entirely new market. Therefore, it can be reduced without completely eliminating Positioning map for starbucks.
This prompts companies to be innovative with their products. By creating an entirely new product or service, a company can create their own market through differentiation from the competition. The second part describes the four principles of blue ocean strategy formulation.
These four formulation principles address how an organization can create blue oceans by looking across the six conventional boundaries of competition Six Paths Frameworkreduce their planning risk by following the four steps of visualizing strategy, create new demand by unlocking the three tiers of noncustomers and launch a commercially viable blue ocean idea by aligning unprecedented utility of an offering with strategic pricing and target costing and by overcoming adoption hurdles.
The book uses many examples across industries to demonstrate how to break out of traditional competitive structuralist strategic thinking and to grow demand and profits for the company and the industry by using blue ocean reconstructionist strategic thinking. The four principles are: The third and final part describes the two key implementation principles of blue ocean strategy including tipping point leadership and fair process.
These implementation principles are essential for leaders to overcome the four key organizational hurdles that can prevent even the best strategies from being executed.
The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, finding the resources to implement the new strategic shift, keeping your people committed to implementing the new strategy, and from overcoming the powerful vested interests that may block the change.
Unlike the "red ocean strategy", the conventional approach to business of beating competition derived from the military organization, the "blue ocean strategy" tries to align innovation with utility, price and cost positions.
The authors justify with original and practical ideas that neither the company nor the industry is the best unit of analysis of profitable growth; rather it is the strategic move that creates "blue ocean" and sustained high performance.
The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about "value innovation" being the cornerstone of a blue ocean strategy.
Value innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant.
The new chapters in the expanded edition of the book deal with the issues of how to develop and align the three strategy propositions of value, profit and people, how to sustain and renew blue ocean strategy at both the business level and the corporate level, and how to avoid red ocean traps that keep organizations anchored in existing market space even as they attempt to create new market space.
Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. December Cirque du Soleil — an example of creating a new market space, by blending opera and ballet with the circus format while eliminating star performers and animals.
The metaphor of red and blue oceans describes the market universe. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of product or service demand.
As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or nicheand cutthroat competition turns the ocean bloody; hence, the term "red oceans".
In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored.
The aim of value innovation, as articulated in the article, is not to compete, but to make the competition irrelevant by changing the playing field of strategy. The strategic move must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.
The Four Actions Framework is used to help create value innovation and break the value-cost trade-off. Instead, blue ocean strategy proposes finding value that crosses conventional market segmentation and offering value and lower cost. He proposed that a combination of differentiation and low cost might be necessary for firms to achieve a sustainable competitive advantage.
For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, Funky Business explained that "Competitive Strategy is the route to nowhere".
Funky Business argues that firms need to create "sensational strategies". Kim and Mauborgne explain that the aim of companies is to create blue oceans, that will eventually turn red. This is the same idea expressed in the form of an analogy.Starbucks has been experiencing very positive results, driven by technological innovation in the US, improved menu and outlet localization strategies in Western Europe, and increased investment in in key growth markets in Asia Pacific.
Every brand should have a five-year plan brand strategy roadmap that includes the vision, purpose, values, key issues, strategies, brand idea, and tactics. Blue Ocean Strategy is a marketing theory from a book published in which was written by W. Chan Kim and Renée Mauborgne, professors at INSEAD.
Based on a study of strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that companies can succeed by creating "blue oceans" of uncontested market space, as opposed to "red .
Second, Dunkin’ Donuts sales growth has stalled for years. While Starbucks has been chugging along with 5–7% comparable store sales growth at its U.S.
stores since , Dunkin’ Donuts has. This business plan template can be downloaded in both PDF and MS Word format at: Starbucks third principle conveys, "When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers." Be creative as you think about the principles that will define your business.
Use attheheels.com to search the locality. «The strategic positioning of Cabio is to become an invisible champion of the niche market for high-end food ingredients based on highly effective biological technology.