Editor's Note: Take a look at our featured best practice, Growth Strategy (41-slide PowerPoint presentation). The reality is: all businesses face the challenge of achieving sustainable Growth. They need viable Growth Strategies. So, what is Growth Strategy? It is the organization's high-level Corporate Strategy Plan that outlines everything the organization needs to do to achieve its goals for [read more]
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Multiple industry sectors are entangled in unrelenting competition as organizations endeavor vigorously, frequently competing over identical attributes, while offering comparable products and services.
This environment of intense competition has distinct and accepted boundaries and well-defined competitive norms. Companies endeavor to surpass their competitors and acquire a larger portion of the product or service demand in this setting.
As the market space grows more and more crowded, prospects for growth and profit dwindle.
Products either become commodities or discover their niche, resulting in intense competition that transforms the industry into a battlefield. This is why such environments are referred to as "red oceans."
Establishing an uncontested market space, also known as a "blue ocean," is one method for sustaining profitable growth. Blue Ocean is a business strategy that encourages the creation of new markets and Value Propositions that make competitors irrelevant.
The basis of this strategy is Value Innovation, through which unchallenged markets are created. Value Innovation is the simultaneous effort to achieve uniqueness and cost effectiveness. The companies shatter the conventional cost-value trade-off by providing substantially greater value to end consumers at a reduced price.
The foundation of the Blue Ocean Strategy is the 4 Actions Framework, which represents a powerful tool. The primary argument of the 4 Actions Framework is that establishing a new market can generate more advantages than contending against entrenched competitors in an existing market.
The framework considers the following 4 actions when either enhancing a current offering or developing a fresh one:
The vital component to implementing a successful 4 Actions Framework strategy is identifying the recurrent obstacles that only the organization can address. The framework is designed for assessing the current Value Proposition of an organization whilst discovering a way to create a new one that resonates with a different group of consumers or needs.
Let us delve a little deeper into some of the actions.
In this action, queries pertaining to product, pricing, or service characteristics that must exceed industry standards are addressed. The essential query to pose is, "Which factors justify significantly exceeding typical industry standards?"
This query pushes businesses to identify and eliminate the trade-offs that customers must tolerate.
This action investigates segments of an organization or industry that can be eliminated wholly to reduce costs and help establish an entirely new market. The essential question that must be asked is, "What are elements that are frequently ignored by the industry that ought to be eliminated?"
This question necessitates consideration about the elimination of factors upon which competitors have customarily competed. The focus should on characteristics that necessitate significant effort and investment, but generate only marginal revenue or new consumers.
This action examines areas of a company's product or service that are not essential but are notable in the industry and can be streamlined without being eliminated.
Interested in learning more about the 4 Actions Framework? You can download an editable PowerPoint presentation on the 4 Actions Framework here on the Flevy documents marketplace.
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"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu
For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.
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