Blue Ocean StrategyAppendix A,B,C
MICHAL MEDRANO
CASEY HARVEY
MASON STONE
JULIO GARCIA
COURTNEY ELLIS
GLEN LESLY
TRAVIS TEMPEL
ROBERTO PADILLA
Key Topics:
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Open New market Space
Value Innovation- Linked to what buyers value
Competition
Buyer Value at an accessible price
Two Distinct Views on Industry Structure
Structuralist Strategies
Reconstructionist Strategy
Reconstruction & Recombination
Market Dynamics of Value Innovation Appendix C
Monopolies
Automobile Industry
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Started back in 1893
Woodrow Wilson said " the horseless carriage at the present is a
luxury for the wealthy. It will never come into consumer use as the
bicycle.
The Model T
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Henry Ford
Revolutionary Assembly Line
Market Share rose from 9% in 1908 to 62% in 1921
General Motors
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1924
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Strategy- Produce a car for every purse and purpose
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Buyers trade up for fashion and comfort
Japanese Jump Into Blue Ocean
Opportunity
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Small, Fuel Efficient cars
Cars made were the Honda, Toyota, and Nissan
Oil Crisis in the 1970's, Consumers flocked the Japanese cars
Chrysler
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On edge of bankruptcy
Introduce the minivan
Ignites SUV market
Two Distinct Views on Industry
Structure
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Structuralist View – Has its roots in industrial
organization economics
 Industrial

Organization
Reconstructionist View – built on theory of
endogenous growth
 Joseph
A Schumpeter
Structuralist Strategies
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Structuralist – important implications often leads
to competition-based strategic thinking.
Leads to deciding whether or not to enter.
Leads
firms to divide industries into attractive
and unattractive one.
Decide
whether or not to enter.
Reconstructionist Strategy
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Recognizing that structure and market boundaries.
 Managers
thinking
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& Practitioners do not let this view limit their
Creating Demand
 Reordering
existing elements
Reconstruction & Recombination
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A change in market structure
 Stimulating
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the demand side
Cirque de Soleil
 Reconstructing
existing buyer value elements
 Reconstruction
& Recombination
Market Dynamics of Value Innovation
Appendix C
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Value innovation vs. technology innovation
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Value innovation rapidly increases demand
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Lowers price and long run average costs
UnderArmour
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Submit and Idea
Monopolies
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Harm social welfare
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Charge high prices that exclude consumers
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Waste society’s resources-deadweight loss
Conclusion:
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Auto Industry
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Structuralist
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Reconstructionist
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Value Innovation and Monopolies