Leadership

Operational effectiveness is not strategy

Operational effectiveness:

* Similar activities better than competition

* Improving utilisation of inputs

* Reduce wasted effort

* Better employee motivation

* More advanced technology

* Greater insight into managing specific activities

* Improve relative cost position vs competitors

* Over time competitors lose differentiation as they all adopt best productivity practice.

* Customers come to expect this level of productivity and, therefore, the productivity does not translate into higher profitability

Blue Ocean Strategy

* Value Innovation

* Strategy Canvas and Value Curves

* Four Actions Framework

Value Innovation:

* Value innovation happens when a company is able to innovate strategically and both reduce costs and increase the value for buyers.

* Costs are cut by reducing and eliminating some of the factors on which industry competes.

* Buyer value is increased by raising the value buyers get from some existing factors or creating new factors which buyer did not have previously and which industry is not competing on today.

Strategy Canvas and Value Curve

Four Actions Framework

* Four Actions Framework enables company to break trade-off in traditional strategic logic between product differentiation or competing on cost

* Four Actions Framework is tool to help find alternative and new value curve when looking to break out of the Red and into a Blue Ocean

2. Reduce

Which Factors should be reduced well below industry’s standard?

3. Raise

Which Factors should be raised well above industry’s standard?

1. Eliminate

Which of the Factors that industry takes for granted should be eliminated

4. Create

Which Factors should be created that the industry has never offered?

A new Value Curve

2. Reduce

Which Factors should be reduced well below industry’s standard?

3. Raise

Which Factors should be...