Summary — Blue Ocean Shift

The book is the second volume of Blue Ocean Strategy. You could read my summary on the first volume below 👇

Book Summary — Blue Ocean Strategy

🚀 The Book in 3 Sentences

1. The second book of blue ocean strategy which focuses on execution and takes human in the process.
2. 5 steps to enter the blue ocean.
3. Start with a perspective, follow by a process.

🎨 Impressions

This book explains deliberately step by step to enter the blue ocean. It fulfills the blue ocean strategy quite well. Worth reading!

🙎‍ Who Should Read It?

I would recommend this book for the entrepreneur who wants to avoid competition in the red ocean. It will be better if a reader completes the blue ocean strategy book before reading this book. Anyway, this book can also be read by anyone and it is not required to read the blue ocean strategy book before this book.

📒 Summary + Notes

1. Introduction

• Change from market competing to the market creating.
• 🔑 Key of blue ocean shift: create a new productivity frontier with lower cost and higher value to customers.

• 3 components of success: a blue ocean perspective, market-creating tools, humanness in the process.

1. Blue ocean perspective

2. Market-creating tools

To create a new market, there is a market-creating strategy

• Disruptive Creation = Replace existing industry
• Nondisruptive Creation = Create new industry
• Always focus on customer value, not technology

3. Humanness in the process

To build humanness in the process requires 3 components

1. Atomization: break a challenge down into the small pieces
2. Firsthand discovery: allow people to see things firsthand
3. Fair process: engagement + explanation + clear expectation

2. Procedure

There are 5 steps to making a blue ocean shift. It is not required to start from step 1.

2.1 Get Start

1. Evaluate portfolio using the pioneer-migrator-settler map.

Plot your company business portfolio in the pioneer-migrator-settler map which is divided into 3 zones.

The higher zone, the more innovative and close to the blue ocean.

The bigger the circle, the more revenue of that business.

Select some key businesses to shift to pioneer which is the blue ocean. Those businesses should satisfy these criteria: it is a settler, the manager is skillful, low workload, it will not survive in the future if there is no change.

2. Build a good team

• 10–15 team members
• come from different departments
• Everyone is respectful (kingpins in the company)

2.2 Understand Where You Are Now

1. Compare with competitors using strategy canvas.

Strategy canvas illustrates a big picture.

source: https://www.blueoceanstrategy.com/tools/strategy-canvas/

You can find more detail of the strategy canvas in the Blue Ocean Strategy book.

2.3 Imagine Where You Could Be

1. Uncovering hidden pain points that limit the industry size by using the Buyer utility map.

source: https://www.blueoceanstrategy.com/tools/buyer-utility-map/

• Horizontal axis: buyer experience sequence
• Vertical axis: Utility levers that are feeling of the customer for each buying step
• When you know the current industry focus, you can find the pain point and solve it using the blue ocean strategy.
• You can interview buyers or pretend to be a buyer to get buyer insight.

2. Discover noncustomers

Source: https://www.blueoceanstrategy.com/tools/three-tiers-of-noncustomers/

There are 3 tiers of noncustomers that offer big blue ocean opportunities.

Tier 1: Close to the current market. However, they won’t buy a product if not necessary.

Tier 2: Refuse to use product or unaffordable.

Tier 3: Never interested in the current market.

Try to estimate the demand of each tier.

2.4 Find How You Get There

1. Reconstruct a market boundary by using 6-path framework

source: https://www.blueoceanstrategy.com/blog/digitization-nation-e-estonia/

1. Developing alternative blue ocean strategy by using the 4-action framework (raise, Eliminate, Reduce, Create)

You can find more detail of the strategy canvas in the Blue Ocean Strategy book.

2.5 Make Your Move

The last step is to conduct rapid market tests.

1. Holding Your Blue Ocean Fair

• Present 6 methods from the 6-path framework.
• Get feedback, voting.
• Manages to make a final decision.

2. Create a rapid prototype

3. Formalizing Your Big-Picture Business Model

• Adjust desired cost based on price not adjust price based on cost. Then, find a way to achieve that cost.
• Drawing a big-picture business model.

4. Execute strategy

• Start small to spare time for solving the problem.

Hope you enjoy reading my blog 😄.

If you never read the Blue Ocean Strategy book, I recommend you to read the summary here: https://yannawut.medium.com/book-summary-blue-ocean-strategy-ab4d97f94e6b