Consigliere

Blue Ocean Strategy Glossary : Consigliere

Consigliere is a politically adept and highly respected insider who can help identify landmines that may lie ahead in executing a Blue Ocean Strategy. A consigliere will, for example, help identify who will fight and who will support the changes a tipping point leader would like to make. While it is important to build a top management team with strong functional skills such as marketing, operations or finance, bringing a Consigliere on board allows a leader to zoom in on identifying the key players and how they will likely play the political game. See Political Hurdles.

Source: Blue Ocean Strategy Glossary at www.blueoceanstrategy.com

Complementary Products and Services

Blue Ocean Strategy Glossary : Complementary Products and Services

Complementary Products and Services are products and services that indirectly impact the utility a buyer receives from an offering. Few products and services are used in a vacuum. Yet managers tend to confine their worldview within the bounds of their industry, without asking what happens before, during, and after the use of their product or service.

The key is to define the total solution buyers seek when they choose a product or service. For example, babysitting assistance and parking facilities are two complementary services to movie theaters. By expanding one's attention to the total solution buyers seek when they choose a product or service, and by removing the "pain points" that buyers experience before, during or after the use of their product or service, a company can create a blue ocean of new market space. See Six Paths Framework.

Source: Blue Ocean Strategy Glossary at www.blueoceanstrategy.com

Commonalities

Blue Ocean Strategy Glossary : Commonalities

Commonalities are shared preferences among buyers. To ensure that a blue ocean is deep and wide enough to guarantee sustainable profitability, managers must aggregate the greatest demand for their offering by challenging two conventional strategic practices: focusing on existing customers and driving for finer segmentation to accommodate buyer differences. By looking to noncustomers and by building on powerful commonalities across them, it is possible to reach beyond existing demand and unlock a new mass of customers that did not exist before.

Source: Blue Ocean Strategy Glossary at www.blueoceanstrategy.com

Cold Spots

Blue Ocean Strategy Glossary : Cold Spots

Cold Spots are activities that have high resource input but low performance impact. Taking resources away from cold spots and assigning them to activities that have a high performance impact is a way to execute Blue Ocean Strategy with limited resources. See Resource Hurdle.

Source: Blue Ocean Strategy Glossary at www.blueoceanstrategy.com

Cognitive Hurdles

Blue Ocean Strategy Gloassary : Cognitive Hurdles

Cognitive Hurdles are the mental blocks holding back employees from realizing that there is a need for change as is often required by Blue Ocean Strategy. Often to wake employees up to the need for change, companies point to the numbers and insist that the company must achieve better results. This, however, is often too abstract to inspire employees to move. In order to effectively change employees' attitude and behavior, one must make them see and experience the need to change first hand. To overcome the cognitive hurdle employees must be put face-to-face with their worst operational problems and with disgruntled customers. Research in neuroscience and cognitive science shows that people remember and respond most effectively to what they see and experience. See Tipping Point Leadership.

Source: Blue Ocean Strategy Glossary at www.blueoceanstrategy.com

Chain of Buyers

Blue Ocean Strategy Glossary - Chain of Buyers

Chain of Buyers refers to the different players involved directly or indirectly in the buying decision. Generally speaking there are three groups: purchasers, users and influencers. Although these three groups may overlap, they often differ. For example, a sick child would be the user of a prescribed medicine, their parent, the purchaser, and the doctor, the influencer.

However, normally an industry converges on a single buyer group. The pharmaceutical industry, for example, focuses overwhelmingly on doctors, the influencers. When reconstructing market boundaries, managers should challenge conventional definitions of who is the target buyer and look across the chain of buyers. This is because different buyer groups often hold different definitions of value. Thus, by shifting the focus to other buyer groups companies can often see new ways to unlock value. See Six Paths Framework.

Source: For more Blue Ocean Strategy Glossary, visit www.blueoceanstrategy.com

Buyer Utility Map

Blue Ocean Strategy Glossary - Buyer Utility Map

Buyer Utility Map is a tool that helps managers test whether their business or product/service offers a leap in value to buyers. It also helps managers test whether their business or product/service unwittingly blocks buyer utility across the totality of the buyer's experience. A buyers' experience can be broadly broken into a cycle of six stages: Purchase, Delivery, Use, Supplements, Maintenance, and Disposal. At each stage, a company can typically use six levers to unlock exceptional buyer utility: Customer Productivity, Simplicity, Convenience, Risk, Fun & Image, and Environmental Friendliness. The buyer utility map is a two-dimensional matrix that displays the six stages of the buyer experience cycle on one dimension, and the six utility levers on the other.

By applying the buyer utility map, managers: 1) gain initial insights into the unquestioned assumptions that their industry is based on that detract from value and can be reversed; 2) can test the exceptional utility of their offering by checking whether their business or product/service removes the biggest blocks to utility across the experience cycle; 3) can uncover what assumptions increase costs without significantly raising buyer utility.

Source: For more Blue Ocean Strategy Glossary, visit www.blueoceanstrategy.com

Blue Oceans

Blue Ocean Strategy Glossary - Blue Oceans

Blue Oceans represent the unknown market space, i.e. all the industries not in existence today. Blue oceans are defined by untapped market space, demand creation, and the opportunity for highly profitable growth. In blue oceans, competition is irrelevant because the rules of the game are not set. Blue oceans can be created by expanding existing industry boundaries or by reconstructing industry boundaries. Blue Ocean Strategy provides the systematic logic, tools and methodologies to create blue oceans.

Source: For more Blue Ocean Strategy Glossary, visit www.blueoceanstrategy.com

Blue Ocean Idea (BOI) Index

Blue Ocean Strategy Glossary : Blue Ocean Idea (BOI) Index

Blue Ocean Idea (BOI) Index is a simple yet robust tool to verify if a new business idea meets the criteria of a Blue Ocean Strategy. Often, companies believe that a great idea is enough to generate a commercial success. Of course, great ideas must create a significant leap in buyer utility. But the offering must also be priced so that it is within the reach of the mass of target buyers, while at the same time guaranteeing a handsome profit to the company by reducing its cost structure. Managers must also ensure that before executing the strategy, they have addressed any adoption hurdles ― fears and resistance coming from employees, business partners, or the general public in response to the change created by the new business idea.

In this perspective, the Blue Ocean Idea index tests the following four criteria, in that order:

1. Does the new offering provide exceptional utility?
2. Is the price easily accessible to the mass of target buyers?
3. Does the cost structure meet the target cost?
4. Are adoption hurdles addressed up front?

If the answer is no at any step, it is important to return to the previous step until the answer is yes to each question.

Source: For more Blue Ocean Strategy Glossary, visit www.blueoceanstrategy.com

Atomization

Blue Ocean Strategy Glossary - Atomization

Atomization is the process of breaking the execution of a Blue Ocean Strategy into bite-size atoms that employees at each level of the organization can relate to and feel responsible for. Unless employees believe that the new strategic challenge is attainable, they will likely be de-motivated. Therefore the new strategic vision must be brought down-to-earth in a way that is easy to understand and is atomized into actionable tasks that can be quickly executed at all levels of the organization. See Motivational Hurdle.

Source: For more Blue Ocean Strategy glossary, visit www.blueoceanstrategy.com

Angels

Blue Ocean Strategy Glossary - Angels

Angels are those within a company who have the most to gain from the execution of a new strategy. They are the ones who will support you in the execution of your Blue Ocean Strategy. You need to identify angels early on, and build a coalition of them around you. Having a coalition of angels around you protects you from your adversaries, because attacking you would mean attacking your coalition. See Political Hurdles.

Source: For more Blue Ocean Strategy Glossary, visit www.blueoceanstrategy.com