Blue ocean strategic conception
To conceive the strategic layout of the blue ocean, we need to answer four questions:
What elements are taken for granted by the industry and need to be eliminated?
This problem eliminates the elements of competition and comparison among enterprises in the industry, which are often taken for granted, although they are no longer valuable.
What elements should be lowered below industry standards?
This problem urges people to make a decision to see if the existing products or services are over-designed in function. Just to compete and defeat competitors, enterprises have given more than their customers' needs, which has increased costs in vain.
What elements should be added to industry standards?
This problem urges us to explore the compromises that consumers in this industry have to make.
What industries have never had elements to create?
This problem is helpful to find a new source of buyer's value, thus creating new demand and changing the industrial strategic pricing standard.
Application of Blue Ocean Strategy
Buyer's utility
In other words, products and services should have convincing reasons to urge buyers to buy. To build excellent buyer's utility, we must first understand the buyer's experience cycle, which covers six buyer's experience links from purchase to disposal: purchase, escort, use, supplement, maintenance and disposal, and then test it with utility levers (including customer productivity lever, simplicity lever, convenience lever, risk lever, interest and image lever and environmental protection lever) that span all stages of buyer's experience.
Strategic price
The goal of strategic pricing is to create new demand, not only to win customers in the industry, but also to attract customers from other industries. This requires enterprises to go beyond the existing pricing norms of the industry, list available products or services, find out the mass price corridor, and determine the pricing of the upper, middle and lower stages of the price corridor under the consideration of law, resource protection and imitation.
Planned cost target
After strategic pricing is completed, the next step is target cost planning. Enterprises should start with strategic pricing, deduce the profit rate they want from the price, and plan the target cost instead of pricing from the cost. In order to achieve the target cost, we need to use three levers: simplifying operations, finding partners and changing the pricing model of the industry.
Remove obstacles to acceptance
First of all, we should make clear what obstacles our products or services may encounter when entering the market, and then solve these obstacles by educating employees, business partners and the general public to openly discuss why such products or services should be launched.
Principles of blue ocean strategy
Blue Ocean Strategy * * * puts forward six principles, four principles of strategy formulation: rebuilding the market boundary, paying attention to the overall situation rather than figures, surpassing the existing demand, following a reasonable strategic order, and two principles of strategy implementation: overcoming key organizational obstacles and making strategy implementation a part of the strategy.
One of the strategic principles of the blue ocean
Rebuild market boundaries
From head-on competition to building a blue ocean, we use six paths to rebuild the market boundary.
1. Industry: Looking at the markets of other industries.
Red sea thinking: people follow the trend to define the industry and concentrate on becoming the best among them.
Blue Ocean View: An enterprise not only competes with its own industrial competitors, but also competes with industrial competitors who choose alternative products or services.
Example: NTT DoCoMo, a Japanese telecom operator, launched i-mode mobile phone one-click Internet access on 1999, turning customers who only use voice services into customers who use voice and data services (music, pictures and information).
2. strategic groups: Observing the market through different strategic groups in the industry.
Red Sea Thinking: Subject to the widely accepted ideas of strategic groups (such as luxury cars, economical cars and family cars), we strive to excel in the group.
Blue ocean view: break through the narrow vision and find out what factors determine the choice of customers, such as the choice of high-end and low-end consumer goods.
Example: Curved Beauty Fitness Club is designed for women, eliminating luxury facilities and miniaturization of community distribution. Members take turns to use a set of equipment for half an hour three times a week, and the monthly fee is only $30.
3. Buyer groups: redefine the buyer groups in the industry.
Red sea thinking: only pay attention to a single buyer, not to end users.
Blue Ocean View: Buyers are a chain of buyers, users and influencers.
Example: Novo Nordisk Company is an insulin manufacturer, which integrates insulin and injection pen to create Novo Nordisk injection device, which is convenient for patients to carry around.
4. Scope of products or services: Focus on the market of complementary products and services.
Red Sea Thinking: Defining the scope of products and services in the same way.
Blue Ocean View: Complementary products or services contain undeveloped requirements. The simple method is to analyze what customers need before, during and after using the product.
Example: Beike Company found that the municipal government is not concerned about the price of the bus itself, but the maintenance cost. By using glass fiber body, the price of bus is increased, but the maintenance cost is reduced, forming a win-win situation with the municipal government.