Business Strategy Monday - Creating your value curve

Hello and welcome to Business Strategy Monday. I'm Jeremy. This week, you'll review what blue ocean strategy is, what value curves are, and how you draw them. You'll learn some good strategy vocabulary and gain ideas that can strengthen your company's strategy. Let's start off with some vocabulary that will be important for today's lesson: (1) To devalue: This means to make something less important For example: We devalued advertising and instead focused on product quality. (2) is Untouchable: Untouchable is something that can't be hurt For example: After last year's sales numbers, he's untouchable. They would never fire him. And (3) Dependable: Dependable means trustworthy, something that won't become bad For example: He's the most dependable person in the office. We can trust him to do a good job. OK. Now let's talk blue ocean strategy. First, what is blue ocean strategy? Blue ocean strategy is when your company creates a value curve that other companies in your industry don't use. That way you don't have competition. What is a value curve? A value curve is a group of things that are important to your industry. For example, restaurants will have taste, price, and location on their value curve. Your curve depends on how important each thing is to you. To create a value curve, you should think about which things are important in your industry and how important each thing is for your company. So, how do you redraw your value curve and find a blue ocean? This is the really important question. There are actually two ways to redraw your value curve and find a blue ocean. First, you can change how you value things on your curve. For example, if all the restaurants care about taste, you might devalue taste and just have a restaurant in a good location with a good price. But there's another way. You can add things to the value curve. Let's say all the restaurants care about price, taste, and location. You could find a blue ocean by adding entertainment to your curve. If your restaurant is the only one with a jazz band playing, then, you will succeed. A great example of this strategy is from Apple. Here's a typical value curve for the computer industry in the 1990s. Notice that a powerful computer with good features is the most important thing. Other things matter, but not so much. And here's the value curve that Apple drew in order to find a blue ocean and become untouchable for ten years. Apply reduced the importance of features and price. They focused on making a computer that was easy to use and dependable. And they added style. No one else was doing all those things. Apple didn't capture the whole market with their strategy. For many people a feature or the price was the most important thing. But by adding style and refocusing on dependability and ease of use, they were hugely successful. Here's the value curve for the computer industry in the 1990s again. And here's Apple's curve one more time. To redraw your own value curve, that's what you need to do: Change how you value things and find things to value that other companies aren't even thinking about yet. OK. That's about it for today. If you have any questions, please ask in the comments. And check out the blog when you have a chance. There you can read today's lesson, and find some questions to check your understanding. You can find a link below this video. Thanks for using Stuart Mill English everyone. Bye.