Vision to Reality: The Reut Blog

In the lead up to our discussion at the Seminar about Reut’s ‘added value’ here is a summary of the book Blue Ocean Strategy by Kim and Maugborg.

The cornerstone of Blue Ocean Strategy is Value Innovation The creators of blue ocean didn’t use the competition as their benchmark. Instead of focusing on beating the competition, they focussed on making the competition irrelevant by creating a leap in value for buyers and thereby opening up new and uncontested market space. Click for a table charting the difference between red and blue ocean strategies.

Creating Blue Ocean is made up for four different aspects

Eliminate – which factors industry takes for granted should be eliminated (Cirque de Solelil eliminated animal shows / star performers / Yellow Tail wine eliminated ageing wine / ‘Curves’ the gym eliminated the cost, flashiness and distance of other gyms)

Reduce – which factors should be reduced well below the industry’s standard (Yellow Tail: wine complexity, wine range, vineyard prestige Cirque: thrill and danger)

Raise - which factors should be raised well above the industry’s standard (Yellow Tail: retail store involvement price versus budget wine)

Create – which factors should be created that the industry has never offered (Yellow Tail: easy drinking, ease of selection, fun and adventure. Cirque: fun & theme, artistic music & dance)

Its asking the question of what assumptions are still relevant / what needs to be changed and involves a constant re-examination of what constitutes an organization’s hedgehog concept.

The things an organization can’t be best in should be eliminated or reduced. The things it can should be raised or created.

The book also talks about Reconstructing Market Boundaries by ‘Looking Across Functional or Emotional Appeals to buyers’ Two examples of turning some emotional into something functional or something functional into emotional;

Example: Haircuts in Japan (emotional to functional) Drinking Coffee (functional to emotional)

What is Reut’s Blue Ocean?