Blue ocean strategy for project management

Blue Ocean Strategy

The Blue Ocean Strategy is a strategy to gain a competitive advantage. It is used to create uncontested market space and to make the competition irrelevant. New demands are made instead of fighting over existing demand, where fighting for shear of the demand will always be limited. This strategy has the possibility to open up an opportunity for rapid and profitable growth. The strategy is meant to be used for companies that builds future where the customers, employees, shareholders, and society wins. The people behind the Blue Ocean Strategy are W.Chan Kim & Renée Mauborgne. They met in a classroom where Mr. W.Chan was a professor, and Miss Reneé was a student, twenty years ago (1995). The Blue Ocean Strategy is relevant for Innovation Management departments, or entrepreneurs wanting to create something for unknown markets.

Red ocean vs. Blue ocean

The 8 Principles of Blue Ocean Strategy

The 8 principles of blue ocean strategy are placed in two different categories, formulation principles and execution principles. Formulation Principles

• Reconstruct Market Boundaries

The first principle of the blue ocean strategy is to change the market boundaries to brake from the competition and to create blue oceans.

• Focus On the Big Picture

Strategy Canvas

• Reach Beyond Existing Demands
• Get the Strategy Sequence Right

Execution Principles

• Overcome Key Organizational Hurdles
• Build Execution Into Strategy
• Align the Value Profit and People Proposition
• Renew Blue Oceans

Analytical Tools & Frameworks The analytical tools and frameworks are used to identify and diagnose where in the ocean each project is located. When the location has been found, the process of turning the focus from red oceans to blue oceans begin. The focus points are shifted with the tools and frameworks to create new markets, and new demand.

Three Characteristics

1. Focus
2. Divergence
3. Compelling Tagline

Three Steps

1. Strategy Canvas

The strategy canvas is a tool, used to diagnose where in the current market competitors are focused on when delivering their product or service to the customers. To understand each market, the principal factors in those markets are identified. A graph is drawn where the principles are located on the x-asis, no matter the order of the principles, and y-asis goes from low to high. Then each principle is rated independently on the graph according to how the market is. When the ratings have been made clear, the graph can then be used as an action framework. As in where to place the focus points to identify blue ocean.

Example

1. Four Action Framework
2. Eliminate-Reduce-Raise-Create Grid

Resources