4 Steps to Creating a “Blue Ocean” Strategy

Step 1: Outline the industry and get a good feel for it’s key attributes and the intensity of the competition. Porter’s 5 Forces model can be useful for this.
5 forces

Step 2: Consider the individual companies in the industry. What are the competitive drivers? Here is a list of areas where companies typically compete.

Research and Development
Design of Products, Services, or Processes
Marketing & Sales
Customer Service

Step 3: Create a Blue Ocean Strategy Canvas like the ones below. Your first task is to take the key aspects of the industry from both the companies perspective as well as the customers perspective and put them on the bottom axis. Then start drawing your graph.

It may be that your industry all converges along the same line like in the graph below from aiconsortia.com. In this case the green line represents the fast food industry and the blue line shows where the proposed Blue Ocean company, Burger Van, could differentiate itself.


Or, if the industry is fragmented, it may make sense for you to graph your industry company by company or in segments of companies as in the image below.

hospital Canvas

Step 4: Finally, it’s time to see where you might create your Blue Ocean. It may be helpful to ask yourself these questions from the Blue Ocean Strategy:

  • What can I eliminate?
  • What can I reduce?
  • What can I raise?
  • What can I create?

In this graph, the red lines would have been drawn as part of step 3, the blue line is the new creation.



Image source: sixpathsconsulting.com