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Estimated Read: 2 minutes

Yesterday, we discussed the difference between red and blue oceans and how to use fancy tools to find your blue ocean. Today, we will dive deeper into the blue ocean strategy and show you how to create your unique value proposition. Here are the key takeaways from Chapters 3 and 4 of "Blue Ocean Strategy":

• The Four Actions Framework: This is one of the fancy tools we mentioned earlier, and it's all about finding new ways to create value for your customers while reducing costs.

• The Eliminate-Reduce-Raise-Create Grid: This is another tool that helps you create your own blue ocean strategy by plotting the factors you identified in the Four Actions Framework.

• The Three Tiers of Noncustomers: To truly create a blue ocean strategy, you need to look beyond your current customers and identify noncustomers not currently served by your industry.

Okay, so now that you have all these fancy tools and frameworks, how do you actually create your own blue ocean strategy? It's all about looking for opportunities to differentiate yourself from the competition and create a unique value proposition. To do this, you need to:

• Focus on the factors that matter most to your customers and noncustomers

• Identify what factors you can eliminate or reduce to lower costs

• Identify what factors you can raise to create more value for your customers and noncustomers

• Identify what factors you can create that your industry has never offered

• Test and refine your strategy over time

By doing all of this, you can create a blue ocean strategy that sets you apart from the competition and makes waves in your industry.

But don't keep all this blue ocean knowledge to yourself!

Share this newsletter with your friends and colleagues who might benefit from creating their own blue ocean strategy. Together, we can all make waves in our industries.

That's it for today! Tomorrow, we'll talk about the next steps in implementing your blue ocean strategy, including building a team to help you execute your vision.

Stay tuned and keep making waves!

To learn more about the Blue Ocean Strategy, checkout this Harvard Business Review Article. 

You can also get the book on Amazon

Best,

Camillo

A Quick Case Study

Today, let's explore how a local bakery can use the Blue Ocean Strategy's tools to create a unique and profitable business. Here are the key takeaways and how they can apply to the bakery industry:

The Four Actions Framework

• Identify the key factors that the industry competes on (e.g., taste, price, convenience).

• Eliminate or reduce the factors that don't matter as much to your customers (e.g., a fancy storefront).

• Raise the factors that do matter to your customers (e.g., using high-quality ingredients).

• Create new factors that the industry hasn't offered before (e.g., unique flavor combinations).

The Eliminate-Reduce-Raise-Create Grid

• Use the four actions identified in the Four Actions Framework to plot the key factors of the industry on the grid.

• Focus on the factors that matter the most to your customers and that you can excel at (i.e., raise).

• Identify what factors you can eliminate or reduce (i.e., eliminate/reduce) to lower costs or improve efficiency.

• Identify what new factors you can create that your industry hasn't offered (i.e., create).

The Three Tiers of Noncustomers

• Identify noncustomers who are not currently being served by your industry.

• Focus on noncustomers in the first and second tiers who have never been customers or left the industry.

• Discover what factors would make these noncustomers switch to your bakery.

A local bakery could create a unique and successful business model using these tools. For example, they could:

• Eliminate the need for fancy storefronts by using an online ordering system or pop-up shops.

• Reduce the number of product lines to focus on higher quality, fresher ingredients.

• Raise the value of their products by using unique flavor combinations and offering customization options.

• Create a brand that is focused on sustainability or a social cause, which could attract noncustomers who value those factors.

Using the Blue Ocean Strategy's tools, a local bakery can stand out in the crowded industry and create a unique value proposition that sets them apart. So, next time you visit your local bakery, consider how they might use the Blue Ocean Strategy to create a successful business.