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Getting the Strategic Sequence Right. Blue Ocean Strategy, Chapter 6 Paul Shirley Jonathan McLaurin Marsha Swink. The Fourth Principle of Blue Ocean Strategy. Build a robust business model to ensure that you make a healthy profit on your blue ocean idea The Strategy Sequence

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getting the strategic sequence right

Getting the Strategic Sequence Right

Blue Ocean Strategy, Chapter 6

Paul Shirley

Jonathan McLaurin

Marsha Swink

the fourth principle of blue ocean strategy
The Fourth Principle of Blue Ocean Strategy
  • Build a robust business model to ensure that you make a healthy profit on your blue ocean idea
  • The Strategy Sequence
    • Buyer utility
    • Price
    • Cost
    • Adoption
slide3

Buyerutility

Is there exceptional buyer utility in your business idea?

No- Rethink

Yes

Revenue side of the business model

Price

Is your price easily accessibly to the mass of buyers?

No- Rethink

Yes

Cost

slide4

Cost

Can you attain your cost target to profit at your strategic price?

No- Rethink

Yes

Adoption

What are the adoption hurdles in actualizing your business idea?

Are you addressing them up front?

No- Rethink

Yes

Viable Blue Ocean Idea

buyer utility
Buyer Utility
  • Don’t get caught in the trap!
  • Use the Buyer Utility Map
buyer utility map
Buyer Utility Map

The Six Stages of the Buyer Experience Cycle

The Six Utility Levers

buyer utility map wholesale store
Buyer Utility Map-Wholesale Store

The Six Stages of the Buyer Experience Cycle

The Six Utility Levers

blue ocean strategic pricing
Blue Ocean Strategic Pricing
  • Want and Compelling Ability to Pay
    • Finding the Right Price
  • Excludability
    • Originators or Followers-Imitators
  • Combine with Exceptional Utility
the price corridor of the mass
The Price Corridor of the Mass
  • Step 1- Identify the Price Corridor
    • Same Form- Same Products or Services.
    • Different Form, Same Function- Different look, but same use.

3. Different Form and Function- Completely different, but same overall objective.

the price corridor of the mass10
The Price Corridor of the Mass
  • Step 2- Price level within the price corridor
    • Upper-level Pricing- Many Patents and Asset protection
    • Mid-level Pricing- Fewer patents and Asset safe- guards
    • Lower-level Pricing- With out patent protection.

Costco- Volume brings cost advantages

target costing the profit side
Target Costing-The Profit Side
  • Price Minus Costing- To arrive at a desired profit.
  • Working Backwards to arrive at the Target Cost.
    • Support the necessities and still make a profit.
  • Three Levers to achieve the Target Cost.
lever one streamlining and cost innovations
Lever One - Streamlining and Cost Innovations
  • Most effective and efficient ways of achieving the same task
  • Outsourcing, simplifying, choosing locations
  • Unconventional means of production.
lever two partnering
Lever Two - Partnering
  • Using other’s expertise
    • Averret Trucking for Inbound and Outbound shipping
  • Acquisitions
  • Vertical and Horizontal Integration
lever three pricing innovation
Lever Three – Pricing Innovation
  • Changing the Price Model
    • If all else fails, change it!
  • Using other industry’s price models.
  • Buying-Leasing-Renting
main stakeholders
Main Stakeholders

Educate

Keys

  • Employees
  • Business Partners
  • General Public
  • Open discussion for why
  • Set clear expectations
  • Explain its merits
  • Need voices of shareholders to be heard
  • No surprises
what s next
What’s Next

After Passing BOI Index

  • Shift gears to execution
  • 5th principle of BOS

Overcoming key organizational hurdles

take aways
Take Aways
  • Utility Map
  • If all else fails, change your price model
  • BOI Index