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Blue Ocean: a comprehensive approach to value chain innovation

Lesson created by SMEGoNet (SMART+) Project using

Video from WOBI - World of Business Ideas YouTube Channel

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Blue Ocean Strategy is a business strategy proposed for first time in 2005 by W. Chan Kim and Renée Mauborgne in their book of same title. The main point of strategy stands for finding or even creating market space which is unconstested. It provides the high growth and profits. First of all you need to focus on thinking innovatively – working in cluster with others may you help to do

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Additional Resources for you to Explore
Blue ocean strategy is a way of innovative thinking which is available for every entepreneur. You do not need to think about starting revolution – a new color of car is innovative enough too. Cinema, TV and finally Youtube are examples of blue oceans which were explored consecutively. See this simple method of predicting or finding next disruptive innovation. Blue Ocean Strategy is not academic theory but practical business method. It focuses on exceeding existing market borders and find uncostested space to develop new deamd. It was adapted successfully by many companies such as Starbucks, Lexus or Cisco as well as by smaller companies (see some success stories). The main challenge is to key customer value commonalities. There are six paths to swim out of a red ocean and find a blue ocean: 1. look across alternative industries - examine why customers choose one offer over the others, 2. look across strategic groups within your industry - diagnose if customers prefer price or performance, 3. look across the chain of buyers - every customer is important but some of them are key buyers to generate your growth and profit, 4. connect your products with complementary services - they may be used before or after but each use is going to increase your company, 5. focus on functional or emotional orientation - a customer makes his purchasing decision on functional or emotional factor which needs to be recognized by your company, 6. look across the time - understand that preferences of customers may change with time and you need to monitor situation as well as react to any change. How can you find or create blue ocean? There are plenty of useful tools to analyse present situation, create new idea and adapt it as new business models. The most important is recognizing the value of innovation itself - without it is not possible to swim in blue ocean. Next you may use strategy canvas, ERRC grid as well as pioneer, settler, migrator map to prepare your own Blue ocean strategy. See these available and other tools explained here. One of the methods to increase your value of innovation is starting cooperation withing larger group of companies such as cluster. Business clusters are a geographic concentration of interconnected companies, suppliers and institutions (ex. universities) which are associated in a particular field. Cluster are considered as a way to increase productivity, innovation and power to compete. Working together provides an effect of synergy. There are clusters in every industry. See example of Klaster LifeScience Kraków. As a member of cluster you adapt process, organizational or marketing innovation, mainly in a form of open innovation which does not usually require much resources to implement. An idea of open innovation we explain in other presentation <link>. Again, working together means synergy - together it is simple to find a blue ocean to swim in. Look out! Blue ocean strategy may be easily misconcepted. It is not just a new product or technology because even spending billions of dollar may be pointless as long as customers do not accept it and do not buy it. It is worth to spend a few minutes to dig deeper about the main misinterpretations of Blue ocean strategy in this document. For more information as well as teaching modules and interactive tools visit the official page of Blue ocean strategy.
This program has been developed as one of four lessons aimed to support SME's to easy comprehend the innovativenes and entrepreneurship, as they grow Global, develop Innovative products and stay Networked within cluster initiative. To learn more please browse for other SMEGONET Project titles: (#1) Innovation: a simple and essential concept; (#2) What is Open Innovation?; (#4) Clusters of innovation. The SME Go Global Network (SMEGoNet) is the subproject under SMART+ program developed in cooperation of: LifeScience Krakow Klaster (Malopolska, Poland) Bio-Aratec (Aragon, Spain) Universitet Babes-Bolyai (Cluj, Romania) University of Western Macedonia (Western Macedonia, Grece). The SMEGoNet is a SMART+ subproject co-financed by the ERDF in the framework of the Interregional Cooperation Programme INTERREG IV C (see:

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