To apply the Blue Ocean Strategy, you start with a Business Model Canvas that describes your industry and then look at your the business model canvas from three different perspectives: the cost prospective, value proposition, and the customer segment.
From the cost prospective, identify the highest cost infrastructure elements and see what would happen to the model if you eliminated or reduced them. Then consider the infrastructure investments you could make or improve upon and see what would happen to the model. When it comes to looking at your model from the cost prospective, ask yourself the following questions:
– What activities, resources, and partnerships have the highest cost?
– What happens if you reduce or eliminate some of these cost factors?
– How could you replace useless or costly elements by reducing expensive resources, activities, or partnerships?
– What value would be created by planning new investments?
– How will changes made from a cost prospective affect your value proposition and customer side of the model?
Next, look at your business model from the value proposition prospective and see what new value you can create or increase. Then see what value you can eliminate or reduce. When it comes to looking at your model from a value proposition prospective, ask yourself the following questions:
– What less valuable features or services could be eliminated or reduced?
– What features or services could be enhanced or created to produce a valuable new customer experience?
– What are the cost implications of your changes to your value proposition?
– How will changes to the value proposition affect the customer side of the model?
Finally, look at your business model from the customer prospective and see what new customer segments you could focus on. Then see what customer segments you can eliminate or reduce. When it comes to looking at your model from the customer prospective, ask yourself the following questions:
– Which new customer segments could you focus on and which segments could you possibly reduce or eliminate?
– What jobs do new customer segments really want to have done?
– How do the customers prefer to be reached and what kind of relationship do they expect?
– What are the cost implications of serving new customer segments?
– What effects does adding or eliminating customer segments have on your value proposition?
How would you start to apply the blue ocean strategy to your business?
Note: this article was originally posted November 11, 2015 at www.stevebizblog.com.