Case Study: The Profit Model Of Blue Ocean Strategy

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7. Get the Strategic Sequence Right, The Fourth Principle.

The sequence starts with buyer utility, followed by price, cost and adoption.

• Does it have exceptional buyer utility, your business idea? If yes, continue. If not, rethink.

• Is your price affordable to the mass of buyers? If yes, continue. If not, rethink.

• Can you limit your cost to profit at your strategic price? If yes, continue. If not, rethink.

• What are the adoption barriers in actualizing your business idea? Are you addressing them up front? If yes, continue. If not, rethink.

After accomplishing this sequence you will have a commercially viable blue ocean idea.

7.1. The Buyers Utility

The Buyer Utility Map helps to identify the levers to deliver exceptional utility to buyers.

Each stage of buyers’
To be successful with target costing, the strategy profile must be divergent, but must also have focus.

7.3.1. The Profit Model of Blue Ocean Strategy

7.4. Adoption

A so large change threatens the status quo, and for that reason it may provoke insecurity and resistance among company’s stakeholders.

Concerns of employees, business partners and general public must be addressed to avoid resistance and fears, when changing the current status quo. Awareness should be developed to communicate the advantages that everyone will have with the success of the actions.

7.5. The Blue Ocean Idea Index

Despite following the sequence: utility, price, cost and adoption, the vision of the whole must not be lost.

The blue ocean idea index helps to keep that systemic vision.

Basically, that vision is formed by the answer of the following questions:

Is there exceptional utility? Are there compelling reasons to buy the offering?

Is the price easily accessible to the mass of buyers?

Does the cost structure meet the target cost?

Were addressed adoption hurdles up

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