Blue Ocean Strategy Online Training

How to unlock blue oceans of opportunity

Workbook
1.15

Kim & Mauborgne 1

about this workbook
If you are reading this book you have enrolled in the course Blue Ocean Strategy Online Training and
you have begun your journey.

How to Use this Workbook:

This workbook is a companion to your online learning - it is your space to experiment and think
creatively. Throughout the course you will be given instructions to go offline to this workbook to
complete an exercise.

Creativity Exercises:
As you work through the creativity exercises online, you will come across open-ended questions for
your consideration. Take time to think about how the concepts you learn in the modules apply to
your own circumstances, in your work and beyond. You will use Section I of this workbook to journal
about the questions presented to you.

Scenario Exercises:
As you dive into the scenario case, A Blue Ocean
in the Bed & Breakfast Industry, you will see
instructions on your screen indicating its time to R EM IN D ER !
open up your workbook to Section II and give
it a try. Along the way you will find this workbook
contains helpful tips & reminders to sharpen your
understanding.

TIP!

Templates:
Finally, Section III of this workbook contains blank frameworks for you to map out your ideas in the
future.

Good luck!
Team BOS

Kim & Mauborgne 2

table of contents
Section I: Creativity Exercises Notes 4

Section II: Scenario Exercises

Module 3: The As-Is Strategy Canvas 14
Module 4: The Three Tiers of Noncustomers 18
Module 5: The Buyer Utility Map 22
Modules 6 & 7: The Six Paths Framework 24
Module 8: The Eliminate-Reduce-Raise-Create Grid & Value Innovation 28
Module 9: The To-Be Strategy Canvas 30

Section III: Blank Templates 32

Kim & Mauborgne 3

Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity

Section I: Creativity Exercises

1.15

Kim & Mauborgne 4

 MODULE 2: Shifting to a Blue Ocean Mindset

Notes: Can you think of any areas in your life where you are currently
competing, and can you make a strategic shift in perspective to
see things in a whole new way and uncover new opportunities for
yourself?

Once you have finished journaling, return to the online course to begin Module 3.
Kim & Mauborgne 5
 MODULE 3: Visualizing Strategy Reality

Notes: In what areas of your life can you benefit from using the as-is
strategy canvas to arrive at a commitment for change? Can you
think of areas in where you are having difficulties convincing others
to see your point of view or arrive at common ground?

Once you have finished journaling, return to the online course to begin Module 4.
Kim & Mauborgne 6
 MODULE 4: Looking Beyond Existing Demand

Notes: In what areas of your life can you go beyond your current comfort
zone to gain insights into new possibilities or creative solutions?

Once you have finished journaling, return to the online course to begin Module 5.
Kim & Mauborgne 7
 MODULE 5: Uncovering Exceptional Utility

Notes: In what areas of your life can you shift your perspective to see
things from someone elses perspective? Can you think of
areas in your work or personal life where you could identify new
opportunities from things that appear as pain points or difficulties?

Once you have finished journaling, return to the online course to begin Module 6.
Kim & Mauborgne 8
 MODULES 6 & 7: Reconstructing Market Boundaries

Notes: Shifting your perspective to look across boundaries rather than

within them can lead to creative insights. Which boundaries in
your life are currently limiting your thinking?

Once you have finished journaling, return to the online course to begin Module 8.
Kim & Mauborgne 9
 MODULE 8: Developing Alternative Strategy

Notes: Can you think of any areas in your professional or personal life
where you can apply the concept of value innovation and the
ERRC grid to develop a new approach to achieving creative
outcomes?

Once you have finished journaling, return to the online course to begin Module 9.
Kim & Mauborgne 10
 MODULE 9: Communicating a Blue Ocean Strategic Move

Notes: In what areas of your life have you encountered situations where
you could use the process of visual communication and the power
of aligning the interests of key stakeholders to change the game
and achieve extraordinary outcomes as a team?

Once you have finished journaling, return to the online course to begin Module 10.
Kim & Mauborgne 11
Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity

Section II: Scenario Exercises

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Kim & Mauborgne 1313

 MODULE 3:
The As-Is Strategy Canvas

Kim & Mauborgne 14

 MODULE 3: The As-Is Strategy Canvas

Key Factors of Competition

Among the items in the list below, weve

circled the key factors of competition for the
RE M IN DE R: hospitality industry:
What is a Key Factor of
Competition? Distance from Location/ Conference
your home Destination rooms
A key factor of competi
tion,
or key factor, is some
thing Limousine Range of Fuzzy
that businesses within Service Options Slippers
an
industry compete on or
invest
in to create value for bu
yers,
increase profits, or attrac Number of Quality Celebrity
t and Stories Assurance Clientele
retain partners & emplo
yees.

Authentic Food & Rewards

Experience Beverage Program

Luggage Currency Staffing

Storage Exchange Cost

Price Swimming pool Facilities

TIP: & spa
How do I know when I have
enough factors? 100% goose- Sky-bar Fusion
When identifying the key factors for an down bedding Restaurants
industry your list must be comprehensive
enough to properly capture the dynamics of
key players in the industry (your factors must Trendy Security Yoga
Brand Classes
be collectively exhaustive). At the same
time, if you identify too many factors you will
find that they begin to overlap (your factors Room Modern In-room
must be mutually exclusive). So how many Size Design Amenities
factors is that? As a rule of thumb, its not less
than 5 and not more than 12.

Kim & Mauborgne 15

 MODULE 3: The As-Is Strategy Canvas

Assigning Levels to TIP:

What is the correct order of
Key Factors of Competition the key factors?
Weve arranged the key factors in the
order below to help you recognize
patterns on your as-is strategy
canvas. We took the strategic group
that has the highest level of offering
across the key factors (luxury hotels).
Once we assigned levels for that
curve, we ordered the factors in
Weve arranged the key factors along the descending order.
top of the table below.

destination

experience
Assurance

Room size
amenities

Authentic
Location/
beverage

Range of
Rewards

Facilities
program

Security
In-room

options
Food &
Quality
Price

Luxury Ho- 9 9 9 8 8 8 7 7 7 5 4
tels

Boutique 10
Hotels

Budget 2
Hotels

Bed & Break- 5

fasts

1 In each of the boxes of the above table, assign a score of 1 to 10 (10 being the highest offering
or price level) to each of the key factors for each strategic group.

For example, if luxury hotels compete on and

offer the most comprehensive rewards program TIP:
relative to all strategic groups, and you score them Where do these numbers
as 9 (as we have above) and boutique hotels are come from?
behind, you might score boutique hotels a 6 for
rewards program. The levels you assign across the factors
for each strategic group or industry
And if boutique hotels are the most expensive player are relative numbers. They
youll score them a 10 for price, while B&Bs at half correspond to the degree of the offering
the price, should receive a score of 5. in comparison to the other groups
represented on the canvas. Keep in
Weve given you a little help to get started... mind youre trying to capture the big
picture, so its okay to estimate.

Kim & Mauborgne 16

 MODULE 3: The As-Is Strategy Canvas

The As-Is Strategy Canvas:

The Hospitality Industry
By plotting the scores
from the previous page on
the grid below & connecting
High 9 9 the dots, we have created
the as-is value curve for
8 8 8 luxury hotels.
7 7 7

Luxury Hotels

Low
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2 Now transfer the scores you have just completed in the

table and plot them on the canvas above.
REMI NDER :
What is a value 3 Connect the dots to create three additional value
curve? curves. Weve done the luxury hotels curve for you.

Value curves capture 4 Dont forget to label each value curve!

the profiles of what key
players or strategic
groups typically offer
relative to one another to
stay competitive.
INTERPRETING THE STRATEGY CANVAS:

Can you identify the differentiation strategies?

Look at the curves youve drawn and identify those that
Once you have completed offer a high level across most of the key factors.
your as-is strategy
How about the low cost strategies?
canvas, return to Module
Look at your curves and see which ones are lower,
3 and continue to the investing and offering less of each of the key factors.
creativity exercise.

Kim & Mauborgne 17

 MODULE 4:
The Three Tiers of Noncustomers

Kim & Mauborgne 18

 MODULE 4: The Three Tiers of Noncustomers

Who are the noncustomers of your industry?

1 Use the spaces below to make note of possible groups that you think belong in each tier for
the B&B industry...

Unexplored
Noncustomers:
- Families
- __________________
- __________________
- __________________

Refusing
Noncustomers:
- Business Travelers
- __________________
- __________________
Soon-to-be
Noncustomers: - __________________
- Backpackers
- Honeymooners
- __________________
- __________________

TIP:
Can groups belong in more than
one tier?

They certainly can! Consider

families, listed here as an
unexplored noncustomers. They are
certainly some families who have
never considered or even heard
about B&Bs, but there are probably
some families who know about
them and have chosen not to stay
deliberately.

Kim & Mauborgne 19

 MODULE 4: The Three Tiers of Noncustomers

Looking for commonalities within tiers of noncustomers

2 Now that youve identified groups within the three tiers of noncustomers, can you think of the
commonalities within the tiers? Fill in your ideas in the spaces below, starting with soon-to-be
noncustomers.

Commonalities among Soon-to-be Noncustomers:

- Backpackers and Honeymooners all desire a unique and memorable experience

- __________________________________________________
- __________________________________________________
- __________________________________________________

Commonalities among Refusing Noncustomers:

- __________________________________________________
- __________________________________________________
- __________________________________________________
- __________________________________________________

Commonalities among Unexplored Noncustomers:

- __________________________________________________
- __________________________________________________
- __________________________________________________
- __________________________________________________

Kim & Mauborgne 20

 MODULE 4: The Three Tiers of Noncustomers

Looking for commonalities across tiers of noncustomers

3 Finally, look for commonalities across tiers. Write in your ideas below and shade the 3-tiers
icons accordingly. Weve given you a couple examples to get started....

- Honeymooners (tier1) and families (tier3) want to spend most of their time
interacting with each other... not dealing with the staff!

- Business travelers (tier2), backpackers (tier1), honeymooners (tier1), and

families (tier3) are all concerned with quality assurance; they want to know
what to expect!

- _________________________________________________________
_________________________________________________________
_________________________________________________________

- _________________________________________________________
_________________________________________________________
_________________________________________________________

- _________________________________________________________
_________________________________________________________
_________________________________________________________

- _________________________________________________________
_________________________________________________________
_________________________________________________________

INTERPRETING THE THREE TIERS OF

NONCUSTOMERS:

Review your notes and consider which Once you have completed
commonalities represent the largest catchment? this exercise, return to
Module 4 and continue to
In other words, is there a need or desire your the creativity exercise.
noncustomers share in common that, if you
addressed it, would create the most new
demand?
Kim & Mauborgne 21
 MODULE 5:
The Buyer Utility Map

Kim & Mauborgne 22

 MODULE 5: The Buyer Utility Map

The Buyer Utility Map

1 Now you will analyze buyer experience for the B&B industry. Using an X, identify possible
pain points for each utility lever across each stage of the buyer experience cycle, for each tier
of noncustomers. Weve already gotten you started...

Purchase Delivery Use Supplements Maintenance Disposal

Productivity X
Simplicity
Convenience
Fun & Image X
Risk X

X = soon to be noncustomers; X = refusing noncustomers; X = unexplored noncustomers

Now well assess the buyer utility map for patterns.

RE MIN DE R:
What is a Pain Point?
2 Do any of the phases
in the buyer experience For customers, pain points
cycle stand out as are negative aspects of
particularly painful? On their experience with a
the map above, circle product or service. For
the phases you think noncustomers they are
have the most pain the reasons they refuse to
points. participate in the industry.

3 Next, do any of the

utility levers seem to be
problematic? On the
same map above, circle
these utility levers.
INTERPRETING THE BUYER
UTILITY MAP:

Look at the circles youve made

TIP:
How many Xs?
Try to look for the major
problems. Not every lever at
every stage will have a pain
point. Try to capture the ones
you think most significantly
block buyer utility.
Once you have completed
this exercise, return to
Module 5 and continue to
the creativity exercise.
on your buyer utility map.
Of the patterns youve identified,
which do you think, if solved,
would provide maximum value to
buyers?
Kim & Mauborgne 23
MODULES 6 & 7:
The Six Paths Framework

Kim & Mauborgne 24

 MODULES 6 & 7: The Six Paths Framework

The Six Paths Framework

Now you will use the six paths framework to search for insight that could lead to solutions to the pain
points youve identified, and to new demand.

Path 1: Look across industries for insights

What are the alternatives to the B&B industry? Why do buyers trade across industries?
The Bed & Breakfast Industry The Online Travel Industry

1
What features and functions
from the B&B industry can 2 How about features and
serve unmet demand and functions from the online travel
create new demand?

?
industry?
List them here: List them here:
- Decentralized sources of information - Buyers can look at many
about B&Bs
offerings, all in one place
- ________________________________
- _______________________________
- ________________________________
- _______________________________
- ________________________________
- _______________________________

The Bed & Breakfast Industry Social Media

3 What features & functions from

the social networking industry

?
could serve unmet demand and
create new demand?
List them here:

- _________________________________
- _________________________________
- _________________________________
- _________________________________
Kim & Mauborgne 25
 MODULES 6 & 7: The Six Paths Framework

Path 2: Look across the strategic groups for insights

What factors cause buyers to trade up or down from B&Bs to Boutique hotels?

Bed & Breakfasts Boutique Hotels

4
What features of B&Bs cause
buyers to trade down and 5 What features of boutique hotels
opt for B&Bs? cause buyers to trade up?
List them here:

?
List them here:

- People appreciate authentic - _____________________________

experience, local knowledge, and small - _____________________________
touches
- _____________________________
- _________________________________
- _____________________________
- _________________________________
- _________________________________

Path 3: Look across different buyer groups

On which buyer groups does the B&B industry typically focus? If you shifted focus to a different
buyer group, how might you unlock new value?
Proprietors Travel Agents Guests

6 What insights can you get by focusing on the needs of

Proprietors? List their needs here:

?
- Proprietors are distinctly concerned with capacity, and getting their
properties noticed
- ___________________________________________________

7 8
How about Travel Agents? List their needs here: And Guests? List their needs here:

- _________________________________________ - _________________________________________
- _________________________________________ - _________________________________________
Kim & Mauborgne 26
 MODULES 6 & 7: The Six Paths Framework

Path 6: Looking across time

How might these trends shape future buyer value?

P2P eCommerce The Sharing Economy Mobile Communication

9
How might the rise of P2P
e-commerce shape future
buyer behavior?
List your thoughts here:
- Individuals are increasingly
comfortable and in some cases
may prefer to interact with
individuals (rather than large
companies), even if theyve
never met.
- __________________________
- __________________________
- __________________________
- __________________________
- __________________________
Once you have completed this
exercise, return to Module 7 and
continue to the creativity exercise.
? 11
10
How might the sharing
economy impact buyer
behavior in the future?
Jot down your insights
below:
- __________________________
- __________________________
- __________________________
- __________________________
- __________________________
With increasing smartphone
penetration, how might buyer
value change over time?
Make note of your insights:
- __________________________
- __________________________
- __________________________
- __________________________
- __________________________
TIP:
What about Paths 4 & 5??!!
The six paths is a framework for
systematically thinking about an industry
from a new perspective. Not every path
will yield insight.
In our B&B case above weve given you
a little hint: paths 1, 2, 3 & 6 are rich with
insight.
However, when you use the framework
in the future, we recommend thinking
through each path in order.

Kim & Mauborgne 27

 MODULE 8:
The Eliminate-Reduce-Raise-Create Grid
& Value Innovation

Kim & Mauborgne 28

 MODULE 8: The ERRC Grid & Value Innovation

The Eliminate-Reduce-Raise-Create (ERRC) Grid

Revisit the as-is strategy canvas for the hospitality industry (as shown in Module 4 online).

Now ask yourself the following questions & fill in the grid below
(weve given you a little help getting started)...

3
What factors do buyers
1 Eliminate Raise care about most?
Should they be raised?
What factors
Place those factors
that the industry Rewards program
here...
provides do buyers
take for granted?
Could you eliminate
them? Place those
factors here...

Reduce Create

2
What factors does
the industry over-
provide? Do buyers 4
care that much
Now, are there any factors that you
about them? Could
could create that the industry has never
you reduce them?
offered? Any factors that might increase
Place those factors
buyer value, increase profits, or create a
above...
strong people proposition? Place those
factors above...

INTERPRETING THE ERRC GRID:

Look at your ERRC grid and think about the following:

When you eliminated a factor, what did you raise or create another to balance your offering out?
When you created a factor what did you eliminate or reduce another to increase profits?
Are you achieving both differentiation AND low cost?

Once you have filled in the ERRC Grid, return to Module 8 and continue to the
creativity exercise.

Kim & Mauborgne 29

 MODULE 9:
The To-Be Strategy Canvas

Kim & Mauborgne 30

 MODULE 9: The To-Be Strategy Canvas

The To-Be Strategy Canvas

Now recall the as-is strategy canvas for the B&B industry:

High

Low
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Luxury Hotels Boutique Budget Hotels B&B

1 Based the ERRC Grid provided online in Module 8, plot the new value curve of Blue Bed on
the strategy canvas above.

2 Try to write a compelling tagline:

____________________________________ TIP:
____________________________________ How should I order the factors
____________________________________ on the to-be strategy canvas?

On a to-be strategy canvas, order the

factors from left to right based on the four
INTERPRETING THE actions of the ERRC Grid. Price always
TO-BE STRATEGY CANVAS: comes first; then the eliminated factors;
then the reduced; then raised, then
Look at your to-be curve. Ask yourself: created, in order from low to high. This
Does it show focus? ordering creates the typical shape of a
Does it diverge from the others? blue ocean curve - with price first followed
by a sweep from low to high.

Once you have completed your to-be strategy canvas, return to

Module 9 and continue to the creativity exercise. Kim & Mauborgne 31
Blue Ocean Strategy Online Training
How to unlock blue oceans of opportunity

Section III: Templates

1.15

Kim & Mauborgne 32

 TEMPLATES: The As-Is Strategy Canvas

As-Is Strategy Canvas Templates

Use these templates to create your own as-is strategy canvases.

The Strategy Canvas: ________________________

(Industry)
High

Low

Key Factors of Competition

The Strategy Canvas: ________________________

(Industry)
High

Low

Key Factors of Competition

Kim & Mauborgne 33

 TEMPLATES: The As-Is Strategy Canvas

The Strategy Canvas: ________________________

(Industry)
High

Low

Key Factors of Competition

The Strategy Canvas: ________________________

(Industry)
High

Low

Key Factors of Competition

Kim & Mauborgne 34

 TEMPLATES: The Three Tiers of Noncustomers

Three Tiers of Noncustomers Templates

Use these templates to explore the three tiers of noncustomers...

The Three Tiers of Noncustomers:

___________________________ Unexplored Noncustomers:

(industry)
-_____________________________________
-_____________________________________
-_____________________________________

Refusing Noncustomers:

-_____________________________________
-_____________________________________
-_____________________________________

Soon-to-be Noncustomers:

-_____________________________________
-_____________________________________

-_____________________________________

The Three Tiers of Noncustomers:

___________________________ Unexplored Noncustomers:

(industry)
-_____________________________________
-_____________________________________
-_____________________________________

Refusing Noncustomers:

-_____________________________________
-_____________________________________
-_____________________________________

Soon-to-be Noncustomers:

-_____________________________________
-_____________________________________

-_____________________________________ Kim & Mauborgne 35

 TEMPLATES: The Three Tiers of Noncustomers

The Three Tiers of Noncustomers:

___________________________ Unexplored Noncustomers:

(industry)
-_____________________________________
-_____________________________________
-_____________________________________

Refusing Noncustomers:

-_____________________________________
-_____________________________________
-_____________________________________

Soon-to-be Noncustomers:

-_____________________________________
-_____________________________________

-_____________________________________

The Three Tiers of Noncustomers:

___________________________ Unexplored Noncustomers:

(industry)
-_____________________________________
-_____________________________________
-_____________________________________

Refusing Noncustomers:

-_____________________________________
-_____________________________________
-_____________________________________

Soon-to-be Noncustomers:

-_____________________________________
-_____________________________________

-_____________________________________
Kim & Mauborgne 36
 TEMPLATES: The Buyer Utility Map

Buyer Utility Map Templates

Use these templates to explore buyer utility....

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Kim & Mauborgne 37

 TEMPLATES: The Buyer Utility Map

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Buyer Utility Map: ________________ (Industry)

Purchase Delivery Use Supplements Maintenance Disposal
Productivity

Simplicity

Convenience

Fun & Image

Risk

Environmental
Friendliness

Kim & Mauborgne 37

 TEMPLATES: The Six Paths Framework

Six Paths Framework Templates

Use these templates to search for insight into new demand....

Looking Across... Insight

Industries

Strategic Groups

The Chain of Buyers

Complementary
Products & Services

Functional-Emotional
Orientation
RE MIN DE R:

You will not gain

insights from each
of the six pathways
every time you
Time
do this exercise.
Use this template
to systematically
guide your thinking.

Kim & Mauborgne 39

 TEMPLATES: The Six Paths Framework

Looking Across... Insight

Industries

Strategic Groups

The Chain of Buyers

Complementary
Products & Services

Functional-Emotional
Orientation

Time

Kim & Mauborgne 40

 TEMPLATES: The ERRC Grid & Value Innovation

ERRC Templates
Use these templates to help you uncover value innovation

ERRC Grid: ________________ (Industry)

Eliminate Raise

Reduce Create

ERRC Grid: ________________ (Industry)

Eliminate Raise

Reduce Create

Kim & Mauborgne 41

 TEMPLATES: The ERRC Grid & Value Innovation

ERRC Grid: ________________ (Industry)

Eliminate Raise

Reduce Create

ERRC Grid: ________________ (Industry)

Eliminate Raise

Reduce Create

Kim & Mauborgne 42

 TEMPLATES: The To-Be Strategy Canvas

To-Be Strategy Canvas Templates

Use these templates to create your own to-be strategy canvases.

The Strategy Canvas: ________________________

Tagline: ___________________________________________
High

Low

Key Factors of Competition

The Strategy Canvas: ________________________

Tagline: ___________________________________________
High

Low

Key Factors of Competition

Kim & Mauborgne 43

 TEMPLATES: The To-Be Strategy Canvas

The Strategy Canvas: ________________________

Tagline: ___________________________________________
High

Low

Key Factors of Competition

The Strategy Canvas: ________________________

Tagline: ___________________________________________
High

Low

Key Factors of Competition

Kim & Mauborgne 44