Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity
Workbook
1.15
© Kim & Mauborgne 1
about this workbook
If you are reading this book you have enrolled in the course Blue Ocean Strategy Online Training and
you have begun your journey.
How to Use this Workbook:
This workbook is a companion to your online learning - it is your space to experiment and think
creatively. Throughout the course you will be given instructions to go offline to this workbook to
complete an exercise.
Creativity Exercises:
As you work through the creativity exercises online, you will come across open-ended questions for
your consideration. Take time to think about how the concepts you learn in the modules apply to
your own circumstances, in your work and beyond. You will use Section I of this workbook to journal
about the questions presented to you.
Scenario Exercises: REMINDER!
As you dive into the scenario case, A Blue Ocean
in the Bed & Breakfast Industry, you will see
instructions on your screen indicating it’s time to
open up your workbook to Section II and give
it a try. Along the way you will find this workbook
contains helpful tips & reminders to sharpen your
understanding.
TIP!
Templates:
Finally, Section III of this workbook contains blank frameworks for you to map out your ideas in the
future.
Good luck!
Team BOS
© Kim & Mauborgne 2
table of contents 4
Section I: Creativity Exercises Notes 14
18
Section II: Scenario Exercises 22
24
Module 3: The As-Is Strategy Canvas 28
Module 4: The Three Tiers of Noncustomers 30
Module 5: The Buyer Utility Map
Modules 6 & 7: The Six Paths Framework 32
Module 8: The Eliminate-Reduce-Raise-Create Grid & Value Innovation
Module 9: The To-Be Strategy Canvas
Section III: Blank Templates
© Kim & Mauborgne 3
Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity
Section I: Creativity Exercises
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© Kim & Mauborgne 4
Notes: MODULE 2: Shifting to a Blue Ocean Mindset
Can you think of any areas in your life where you are currently
competing, and can you make a strategic shift in perspective to
see things in a whole new way and uncover new opportunities for
yourself?
Once you have finished journaling, return to the online course to begin Module 3.
© Kim & Mauborgne 5
Notes: MODULE 3: Visualizing Strategy Reality
In what areas of your life can you benefit from using the as-is
strategy canvas to arrive at a commitment for change? Can you
think of areas in where you are having difficulties convincing others
to see your point of view or arrive at common ground?
Once you have finished journaling, return to the online course to begin Module 4.
© Kim & Mauborgne 6
Notes: MODULE 4: Looking Beyond Existing Demand
In what areas of your life can you go beyond your current comfort
zone to gain insights into new possibilities or creative solutions?
Once you have finished journaling, return to the online course to begin Module 5.
© Kim & Mauborgne 7
Notes: MODULE 5: Uncovering Exceptional Utility
In what areas of your life can you shift your perspective to see
things from someone else’s perspective? Can you think of
areas in your work or personal life where you could identify new
opportunities from things that appear as pain points or difficulties?
Once you have finished journaling, return to the online course to begin Module 6.
© Kim & Mauborgne 8
Notes: MODULES 6 & 7: Reconstructing Market Boundaries
Shifting your perspective to look across boundaries rather than
within them can lead to creative insights. Which boundaries in
your life are currently limiting your thinking?
Once you have finished journaling, return to the online course to begin Module 8.
© Kim & Mauborgne 9
Notes: MODULE 8: Developing Alternative Strategy
Can you think of any areas in your professional or personal life
where you can apply the concept of value innovation and the
ERRC grid to develop a new approach to achieving creative
outcomes?
Once you have finished journaling, return to the online course to begin Module 9. 10
© Kim & Mauborgne
Notes: MODULE 9: Communicating a Blue Ocean Strategic Move
In what areas of your life have you encountered situations where
you could use the process of visual communication and the power
of aligning the interests of key stakeholders to change the game
and achieve extraordinary outcomes as a team?
Once you have finished journaling, return to the online course to begin Module 10.
© Kim & Mauborgne 11
Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity
Section II: Scenario Exercises
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© Kim & Mauborgne 1313
MODULE 3:
The As-Is Strategy Canvas
© Kim & Mauborgne 14
MODULE 3: The As-Is Strategy Canvas
Key Factors of Competition
REMINDER: Among the items in the list below, we’ve
circled the key factors of competition for the
hospitality industry:
What is a Key Factor of Distance from Location/ Conference
Competition? your home Destination rooms
A key factor of competition, Limousine Range of Fuzzy
or “key factor”, is something Service Options Slippers
that businesses within an
riiinennctdatroueinsactpsrreeyaarcpttnoeroemvfriasptsleu&,teoeerfmooanrpttbloroaurycyeinetevrassen.,sdt Number of Quality Celebrity
Stories Assurance Clientele
Authentic Food & Rewards
Experience Beverage Program
Luggage Currency Staffing
Storage Exchange Cost
Price Swimming pool Facilities
& spa
TIP:
100% goose- Sky-bar Fusion
How do I know when I have down bedding Restaurants
enough factors?
Trendy Security Yoga
When identifying the key factors for an Brand Classes
industry your list must be comprehensive Modern
enough to properly capture the dynamics of Room Design In-room
key players in the industry (your factors must Size Amenities
be “collectively exhaustive”). At the same
time, if you identify too many factors you will
find that they begin to overlap (your factors
must be mutually exclusive). So how many
factors is that? As a rule of thumb, it’s not less
than 5 and not more than 12.
© Kim & Mauborgne 15
Assigning Levels to MODULE 3: The As-Is Strategy Canvas
Key Factors of Competition
TIP:
We’ve arranged the key factors along the
top of the table below. What is the correct order of
the key factors?
We’ve arranged the key factors in the
order below to help you recognize
patterns on your as-is strategy
canvas. We took the strategic group
that has the highest level of offering
across the key factors (luxury hotels).
Once we assigned levels for that
curve, we ordered the factors in
descending order.
Price
Quality
Assurance
Rewards
program
Facilities
In-room
amenities
Security
Food &
beverage
Room size
Location/
destination
Authentic
experience
Range of
options
Luxury Ho- 9 9 9 8 8 8 77 754
tels
Boutique 10
Hotels
Budget 2
Hotels
Bed & Break- 5
fasts
1 In each of the boxes of the above table, assign a score of 1 to 10 (10 being the highest offering
or price level) to each of the key factors for each strategic group.
For example, if luxury hotels compete on and TIP:
offer the most comprehensive rewards program
relative to all strategic groups, and you score them Where do these numbers
as 9 (as we have above) and boutique hotels are come from?
behind, you might score boutique hotels a 6 for
rewards program. The levels you assign across the factors
for each strategic group or industry
And if boutique hotels are the most expensive player are relative numbers. They
you’ll score them a 10 for price, while B&Bs at half correspond to the degree of the offering
the price, should receive a score of 5. in comparison to the other groups
represented on the canvas. Keep in
We’ve given you a little help to get started... mind you’re trying to capture the big
picture, so it’s okay to estimate.
© Kim & Mauborgne 16
MODULE 3: The As-Is Strategy Canvas
The As-Is Strategy Canvas:
The Hospitality Industry
High 99 By plotting the scores
from the previous page on
888 the grid below & connecting
7 77 the dots, we have created
the as-is value curve for
luxury hotels.
5
4
Luxury Hotels
Low
RQeuawliatrydsAsPsruorgaPrrinaccmee Facilities Security ALuotchRaetainntoignc/eEDRoxfeopsotiOerinmpteiatSinoiozcnesne
Amenities Beverage
In-room &
Food
REMINDER: 2 Now transfer the scores you have just completed in the
table and plot them on the canvas above.
What is a value
curve? 3 Connect the dots to create three additional value
curves. We’ve done the luxury hotels curve for you.
Value curves capture
the profiles of what key 4 Don’t forget to label each value curve!
players or strategic
groups typically offer INTERPRETING THE STRATEGY CANVAS:
relative to one another to
stay competitive. Can you identify the differentiation strategies?
Look at the curves you’ve drawn and identify those that
Once you have completed offer a high level across most of the key factors.
your as-is strategy
canvas, return to Module How about the low cost strategies?
3 and continue to the Look at your curves and see which ones are lower,
creativity exercise. investing and offering less of each of the key factors.
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MODULE 4:
The Three Tiers of Noncustomers
© Kim & Mauborgne 18
MODULE 4: The Three Tiers of Noncustomers
Who are the noncustomers of your industry?
1 Use the spaces below to make note of possible groups that you think belong in each tier for
the B&B industry...
Unexplored
Noncustomers:
- Families
- __________________
- __________________
- __________________
Soon-to-be Refusing
Noncustomers: Noncustomers:
- Backpackers - Business Travelers
- Honeymooners - __________________
- __________________
- __________________ - __________________
- __________________ TIP:
Can groups belong in more than
one tier?
They certainly can! Consider
families, listed here as an
unexplored noncustomers. They are
certainly some families who have
never considered or even heard
about B&Bs, but there are probably
some families who know about
them and have chosen not to stay
deliberately.
© Kim & Mauborgne 19
MODULE 4: The Three Tiers of Noncustomers
Looking for commonalities within tiers of noncustomers
2 Now that you’ve identified groups within the three tiers of noncustomers, can you think of the
commonalities within the tiers? Fill in your ideas in the spaces below, starting with soon-to-be
noncustomers.
Commonalities among Soon-to-be Noncustomers:
- Backpackers and Honeymooners all desire a unique and memorable experience
- __________________________________________________
- __________________________________________________
- __________________________________________________
Commonalities among Refusing Noncustomers:
- __________________________________________________
- __________________________________________________
- __________________________________________________
- __________________________________________________
Commonalities among Unexplored Noncustomers:
- __________________________________________________
- __________________________________________________
- __________________________________________________
- __________________________________________________
© Kim & Mauborgne 20
MODULE 4: The Three Tiers of Noncustomers
Looking for commonalities across tiers of noncustomers
3 Finally, look for commonalities across tiers. Write in your ideas below and shade the 3-tiers
icons accordingly. We’ve given you a couple examples to get started....
- Honeymooners (tier1) and families (tier3) want to spend most of their time
interacting with each other... not dealing with the staff!
- Business travelers (tier2), backpackers (tier1), honeymooners (tier1), and
families (tier3) are all concerned with quality assurance; they want to know
what to expect!
- _________________________________________________________
_________________________________________________________
_________________________________________________________
- _________________________________________________________
_________________________________________________________
_________________________________________________________
- _________________________________________________________
_________________________________________________________
_________________________________________________________
- _________________________________________________________
_________________________________________________________
_________________________________________________________
INTERPRETING THE THREE TIERS OF Once you have completed
NONCUSTOMERS: this exercise, return to
Module 4 and continue to
Review your notes and consider which the creativity exercise.
commonalities represent the largest catchment?
© Kim & Mauborgne 21
In other words, is there a need or desire your
noncustomers share in common that, if you
addressed it, would create the most new
demand?
MODULE 5:
The Buyer Utility Map
© Kim & Mauborgne 22
MODULE 5: The Buyer Utility Map
The Buyer Utility Map
1 Now you will analyze buyer experience for the B&B industry. Using an “X”, identify possible
pain points for each utility lever across each stage of the buyer experience cycle, for each tier
of noncustomers. We’ve already gotten you started...
Purchase Delivery Use Supplements Maintenance Disposal
Productivity X X
Simplicity
Convenience X
Fun & Image
Risk
X = soon to be noncustomers; X = refusing noncustomers; X = unexplored noncustomers
Now we’ll assess the buyer utility map for patterns. REMINDER:
2 Do any of the phases What is a Pain Point?
in the buyer experience
cycle stand out as For customers, pain points
particularly “painful”? On are negative aspects of
the map above, circle their experience with a
the phases you think product or service. For
have the most pain noncustomers they are
points. the reasons they refuse to
participate in the industry.
3 Next, do any of the
utility levers seem to be
problematic? On the
same map above, circle
these utility levers.
TIP: Once you have completed INTERPRETING THE BUYER
this exercise, return to UTILITY MAP:
How many Xs? Module 5 and continue to
the creativity exercise. Look at the circles you’ve made
Try to look for the major on your buyer utility map.
problems. Not every lever at Of the patterns you’ve identified,
every stage will have a pain which do you think, if solved,
point. Try to capture the ones would provide maximum value to
you think most significantly buyers?
block buyer utility.
© Kim & Mauborgne 23
MODULES 6 & 7:
The Six Paths Framework
© Kim & Mauborgne 24
MODULES 6 & 7: The Six Paths Framework
The Six Paths Framework
Now you will use the six paths framework to search for insight that could lead to solutions to the pain
points you’ve identified, and to new demand.
Path 1: Look across industries for insights
What are the alternatives to the B&B industry? Why do buyers trade across industries?
The Bed & Breakfast Industry The Online Travel Industry
1 ? 2 How about features and
functions from the online travel
What features and functions industry?
from the B&B industry can List them here:
serve unmet demand and
create new demand? - Buyers can look at many
List them here: offerings, all in one place
- Decentralized sources of information - _______________________________
about B&Bs - _______________________________
- _______________________________
- ________________________________
Social Media
- ________________________________
- ________________________________
The Bed & Breakfast Industry
? 3 What features & functions from
the social networking industry
could serve unmet demand and
create new demand?
List them here:
- _________________________________
- _________________________________
- _________________________________
- _________________________________
© Kim & Mauborgne 25
MODULES 6 & 7: The Six Paths Framework
Path 2: Look across the strategic groups for insights
What factors cause buyers to trade up or down from B&Bs to Boutique hotels?
Bed & Breakfasts Boutique Hotels
4 ? 5 What features of boutique hotels
cause buyers to trade up?
What features of B&Bs cause List them here:
buyers to trade down and
opt for B&Bs? - _____________________________
List them here: - _____________________________
- _____________________________
- People appreciate authentic - _____________________________
experience, local knowledge, and small
touches
- _________________________________
- _________________________________
- _________________________________
Path 3: Look across different buyer groups
On which buyer groups does the B&B industry typically focus? If you shifted focus to a different
buyer group, how might you unlock new value?
Proprietors Travel Agents Guests
6 What insights can you get by focusing on the needs of
? Proprietors? List their needs here:
- Proprietors are distinctly concerned with capacity, and getting their
properties noticed
- ___________________________________________________
78
How about Travel Agents? List their needs here: And Guests? List their needs here:
- _________________________________________ - _________________________________________ 26
- _________________________________________ - _________________________________________
© Kim & Mauborgne
MODULES 6 & 7: The Six Paths Framework
Path 6: Looking across time
How might these trends shape future buyer value?
P2P eCommerce The Sharing Economy Mobile Communication
9 ? 11
How might the rise of P2P 10 With increasing smartphone
e-commerce shape future How might the sharing penetration, how might buyer
buyer behavior? economy impact buyer value change over time?
List your thoughts here: behavior in the future? Make note of your insights:
Jot down your insights
- Individuals are increasingly below: - __________________________
comfortable and in some cases - __________________________
may prefer to interact with - __________________________ - __________________________
individuals (rather than large - __________________________
companies), even if they’ve - __________________________ - __________________________
never met. - __________________________
- __________________________
- __________________________
- __________________________ - __________________________
- __________________________
- __________________________ TIP:
- __________________________
What about Paths 4 & 5??!!
Once you have completed this
exercise, return to Module 7 and The six paths is a framework for
continue to the creativity exercise. systematically thinking about an industry
from a new perspective. Not every path
will yield insight.
In our B&B case above we’ve given you
a little hint: paths 1, 2, 3 & 6 are rich with
insight.
However, when you use the framework
in the future, we recommend thinking
through each path in order.
© Kim & Mauborgne 27
MODULE 8:
The Eliminate-Reduce-Raise-Create Grid
& Value Innovation
© Kim & Mauborgne 28
MODULE 8: The ERRC Grid & Value Innovation
The Eliminate-Reduce-Raise-Create (ERRC) Grid
Revisit the as-is strategy canvas for the hospitality industry (as shown in Module 4 online).
Now ask yourself the following questions & fill in the grid below
(we’ve given you a little help getting started)...
1 Eliminate Raise 3
Create
What factors Rewards program What factors do buyers
that the industry care about most?
Should they be raised?
provides do buyers Place those factors
here...
take for granted?
Could you eliminate
them? Place those
factors here...
Reduce
2 4
What factors does Now, are there any factors that you
the industry over- could create that the industry has never
provide? Do buyers offered? Any factors that might increase
care that much buyer value, increase profits, or create a
about them? Could strong people proposition? Place those
you reduce them? factors above...
Place those factors
above...
INTERPRETING THE ERRC GRID:
Look at your ERRC grid and think about the following:
When you eliminated a factor, what did you raise or create another to “balance” your offering out?
When you created a factor what did you eliminate or reduce another to increase profits?
Are you achieving both differentiation AND low cost?
Once you have filled in the ERRC Grid, return to Module 8 and continue to the
creativity exercise.
© Kim & Mauborgne 29
MODULE 9:
The To-Be Strategy Canvas
© Kim & Mauborgne 30
MODULE 9: The To-Be Strategy Canvas
The To-Be Strategy Canvas
Now recall the as-is strategy canvas for the B&B industry:
High
Low
RQeuawliatrydsAsPsruorgaPrrinaccmee
In-room AFmaecilniittiieess
CoHAiILmugnothcmchFRuoaeVtoainniomonlttUoiegdyusnc//eemr&OPEDRoepaxfeVorBptpsaPoelStliiOoneverraidnempttecrtfreiaausttuSoiianoirnriihioogzcntteeysnmynep
Luxury Hotels Boutique Budget Hotels B&B
1 Based the ERRC Grid provided online in Module 8, plot the new value curve of “Blue Bed” on
the strategy canvas above.
2 Try to write a compelling tagline: TIP:
____________________________________
____________________________________ How should I order the factors
____________________________________ on the to-be strategy canvas?
INTERPRETING THE On a to-be strategy canvas, order the
TO-BE STRATEGY CANVAS: factors from left to right based on the four
actions of the ERRC Grid. Price always
Look at your to-be curve. Ask yourself: comes first; then the eliminated factors;
Does it show focus? then the reduced; then raised, then
Does it diverge from the others? created, in order from low to high. This
ordering creates the typical shape of a
blue ocean curve - with price first followed
by a sweep from low to high.
Once you have completed your to-be strategy canvas, return to © Kim & Mauborgne 31
Module 9 and continue to the creativity exercise.
Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity
Section III: Templates
1.15
© Kim & Mauborgne 32
TEMPLATES: The As-Is Strategy Canvas
As-Is Strategy Canvas Templates
Use these templates to create your own as-is strategy canvases.
The Strategy Canvas: ________________________
(Industry)
High
Low Key Factors of Competition
High
The Strategy Canvas: ________________________
(Industry)
Low
Key Factors of Competition
© Kim & Mauborgne 33
TEMPLATES: The As-Is Strategy Canvas
The Strategy Canvas: ________________________
(Industry)
High
Low Key Factors of Competition
High
The Strategy Canvas: ________________________
(Industry)
Low
Key Factors of Competition
© Kim & Mauborgne 34
TEMPLATES: The Three Tiers of Noncustomers
Three Tiers of Noncustomers Templates
Use these templates to explore the three tiers of noncustomers...
The Three Tiers of Noncustomers: Unexplored Noncustomers:
___________________________ -_____________________________________
-_____________________________________
(industry) -_____________________________________
Refusing Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
Soon-to-be Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
The Three Tiers of Noncustomers: Unexplored Noncustomers:
___________________________ -_____________________________________
-_____________________________________
(industry) -_____________________________________
Refusing Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
Soon-to-be Noncustomers: © Kim & Mauborgne 35
-_____________________________________
-_____________________________________
-_____________________________________
TEMPLATES: The Three Tiers of Noncustomers
The Three Tiers of Noncustomers: Unexplored Noncustomers:
-_____________________________________
___________________________ -_____________________________________
-_____________________________________
(industry)
Refusing Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
Soon-to-be Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
The Three Tiers of Noncustomers: Unexplored Noncustomers:
___________________________ -_____________________________________
-_____________________________________
(industry) -_____________________________________
Refusing Noncustomers:
-_____________________________________
-_____________________________________
-_____________________________________
Soon-to-be Noncustomers: © Kim & Mauborgne 36
-_____________________________________
-_____________________________________
-_____________________________________
TEMPLATES: The Buyer Utility Map
Buyer Utility Map Templates
Use these templates to explore buyer utility....
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
© Kim & Mauborgne 37
TEMPLATES: The Buyer Utility Map
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
Buyer Utility Map: ________________ (Industry)
Purchase Delivery Use Supplements Maintenance Disposal
Productivity
Simplicity
Convenience
Fun & Image
Risk
Environmental
Friendliness
© Kim & Mauborgne 37
TEMPLATES: The Six Paths Framework
Six Paths Framework Templates
Use these templates to search for insight into new demand....
Looking Across... Insight
Industries
Strategic Groups
The Chain of Buyers
Complementary REMINDER:
Products & Services
You will not gain
Functional-Emotional insights from each
Orientation of the six pathways
every time you
Time do this exercise.
Use this template
to systematically
guide your thinking.
© Kim & Mauborgne 39
Looking Across... Insight TEMPLATES: The Six Paths Framework
Industries
© Kim & Mauborgne 40
Strategic Groups
The Chain of Buyers
Complementary
Products & Services
Functional-Emotional
Orientation
Time
TEMPLATES: The ERRC Grid & Value Innovation
ERRC Templates
Use these templates to help you uncover value innovation
Eliminate ERRC Grid: ________________ (Industry)
Raise
Reduce Create
Eliminate ERRC Grid: ________________ (Industry)
Raise
Reduce Create
© Kim & Mauborgne 41
TEMPLATES: The ERRC Grid & Value Innovation
Eliminate ERRC Grid: ________________ (Industry)
Raise
Reduce Create
Eliminate ERRC Grid: ________________ (Industry)
Raise
Reduce Create
© Kim & Mauborgne 42
TEMPLATES: The To-Be Strategy Canvas
To-Be Strategy Canvas Templates
Use these templates to create your own to-be strategy canvases.
The Strategy Canvas: ________________________
Tagline: ___________________________________________
High
Low Key Factors of Competition
High
The Strategy Canvas: ________________________
Tagline: ___________________________________________
Low
Key Factors of Competition
© Kim & Mauborgne 43
TEMPLATES: The To-Be Strategy Canvas
The Strategy Canvas: ________________________
Tagline: ___________________________________________
High
Low Key Factors of Competition
High
The Strategy Canvas: ________________________
Tagline: ___________________________________________
Low
Key Factors of Competition
© Kim & Mauborgne 44