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Case Studies by Chan W. Kim and
Renee Mauborgne

46 case studies

by Publication Date
published: 26 Jan 2018

  • Topic: Strategy
  • Industry: Motion Picture &Television
  • Region: North America

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Abstract:
The Marvel Way: Restoring a Blue Ocean explains one of the greatest turnarounds in modern business history. This case comes with a two-part video interview with CEO Peter Cuneo who launched a Blue Ocean. Founded in 1939, Marvel Comics initially struggled in a red ocean producing primarily me-to knock-off comic books. In the early 1960’s the business took a blue ocean turn by focusing on noncustomer college students. Marvel invented characters that were people first and superheroes second: Spider-Man, The Hulk, Iron Man, the X-Men. The business thrived. By the 1980’s value extractors took over Marvel, badly misaligning value, profit, and people. In late 1996 Marvel filed for bankruptcy, a victim of red ocean management practices. New management purchased the business out of bankruptcy in 1998 but faced a daunting task: Marvel owed $30 million in annual interest payments on a $250 million loan, cash was so tight that they almost missed payroll, and movie rights for many of their best characters were licensed to others. First managers stabilized the business then Marvel created a new type of blue ocean that went on to produce the most profitable movie franchise in history. Just over a decade after exiting bankruptcy a debt-free Marvel sold itself to Disney for $4.2 billion.

Pedagogical Objectives:
Learn how to use Blue Ocean Strategy to pivot from a red to a blue ocean. Teach the importance of aligning value, profits and people. Explain the difference between value extraction and value innovation, and the financial and ethical ramifications of each.

Keywords:
Blue Ocean Strategy, Marvel, Motion Pictures, Movies, Ip-Based Finance, Bankruptcy, Ethics, Disney

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published: 26 Jan 2018

  • Topic: Strategy
  • Industry: Motion Picture &Television
  • Region: North America

Show details ...

Abstract:
The Marvel Way: Restoring a Blue Ocean explains one of the greatest turnarounds in modern business history. This case comes with a two-part video interview with CEO Peter Cuneo who launched a Blue Ocean. Founded in 1939, Marvel Comics initially struggled in a red ocean producing primarily me-to knock-off comic books. In the early 1960’s the business took a blue ocean turn by focusing on noncustomer college students. Marvel invented characters that were people first and superheroes second: Spider-Man, The Hulk, Iron Man, the X-Men. The business thrived. By the 1980’s value extractors took over Marvel, badly misaligning value, profit, and people. In late 1996 Marvel filed for bankruptcy, a victim of red ocean management practices. New management purchased the business out of bankruptcy in 1998 but faced a daunting task: Marvel owed $30 million in annual interest payments on a $250 million loan, cash was so tight that they almost missed payroll, and movie rights for many of their best characters were licensed to others. First managers stabilized the business then Marvel created a new type of blue ocean that went on to produce the most profitable movie franchise in history. Just over a decade after exiting bankruptcy a debt-free Marvel sold itself to Disney for $4.2 billion.

Pedagogical Objectives:
Learn how to use Blue Ocean Strategy to pivot from a red to a blue ocean. Teach the importance of aligning value, profits and people. Explain the difference between value extraction and value innovation, and the financial and ethical ramifications of each.

Keywords:
Blue Ocean Strategy, Marvel, Motion Pictures, Movies, Ip-Based Finance, Bankruptcy, Ethics, Disney

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published: 26 Jan 2018

  • Topic: Strategy
  • Industry: Entertainment, Circus
  • Region: Global

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Abstract:
This is the first of a two-case series. The first Case (A) discusses the evolution of the circus industry up until the emergence of Cirque du Soleil. This case provides a detailed discussion on the structure of the circus industry to make possible a rich analysis of how its industry attractiveness has changed over time and the challenges the industry now confronts. The case reveals that the industry had become a red ocean with limited profit and growth potential. To achieve this, students are asked to address the following questions: 1) How would they assess the attractiveness of the circus industry in the early 1980s? What would you conclude from your industry analysis? 2) What were the factors the traditional circuses competed on? What made these factors more or less relevant over time? The second case (B), shows how one company, Cirque du Soleil reconstructed the industry to create a blue ocean. It is an excellent and important complement to the first case. A video called 'The Evolution of the Circus Industry' is available for free faculty download at www.blueoceanstrategy.com. This case has been featured on the ecch website, click to view the article. “The Evolution of the Circus Industry (A)” case has received the 2009 ECCH overall winning case award and won the Strategy and General Management category in the 2006 ECCH European Case Awards.

Pedagogical Objectives:
The case series is designed to serve a variety of purposes in the value innovation and creating new market space teaching module of an MBA strategy course or executive education programme. The case series can be equally used individually in a standalone module on value innovation or as part of a sequence of three to four sessions. In both instances, the instructor can best use it to cover the following topics: (1) value innovation logic (as compared to industry and competitive analysis); (2) the concept of value curve; and (3) the six paths analysis for creating new market space. A teaching note is available to accompany this cases series. A video clip free for instructor download is available at www.blueoceanstrategy.com. **ecch European Case Awards Category Winner 2006 and ecch European Case Awards Overall Winner 2009

Keywords:
Circus and Live Entertainment Industry, Value Innovation, Strategy, Blue Ocean Strategy, Creating New Market Space, Redefining Industry Boundaries, Competition

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published: 11 Dec 2017

  • Topic: Strategy
  • Industry: National Commercial Banks
  • Region: Europe

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Abstract:
The case explains how Compte-Nickel found a blue ocean in the crowded French retail banking sector by identifying noncustomers and developing a strategy to attract them. Traditional banks focused on developing financial technology to make their offerings more appealing, whereas Compte-Nickel created a blue ocean by looking at the noncustomers the other banks ignored: low income earners and people facing financial exclusion.

Pedagogical Objectives:
1.Creating blue ocean businesses requires companies to look to noncustomers instead of concentrating on existing ones. This is at the core of value innovation. Rather than focus on customer differences, businesses break the cost-value tradeoff by increasing the value and reducing the cost for the buyer. This reorientation allows them to unlock a new mass of customers that did not exist in the existing market. 2.Participants will learn to use four blue ocean strategy analytic tools: - The Buyer Utility Map, which helps identifies blocks to buyer utility to increase demand - The Eliminate-Reduce-Raise-Create Grid, which analyzes which factors of competition to eliminate, reduce, raise, and create to unlock a blue ocean - The Strategy Canvas, the central diagnostic tool that graphically captures the current strategic landscape and a new blue ocean strategy -The Blue Ocean Idea Index, that analyzes whether the new strategy is commercially viable.

Keywords:
Blue Ocean Strategy, Banking, Finance, Fintech, Start-Up, Entrepreneurship, French Retail Bank, French Retail Bank, France.

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published: 11 Dec 2017

  • Topic: Strategy
  • Industry: Catalog and mail-order houses; Computer processing and data preparation, Processing services
  • Region: North America

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Abstract:
On 30 May 2017, Amazon shares traded at a record high – above $1,000 – surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. It recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, it was ranked the world’s most innovative company and the fourth largest company by market capitalization. The case explores Amazon’s path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon’s at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth.

Pedagogical Objectives:
The case aims to understand the root of a company’s high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon’s growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points: 1) There is no perpetually excellent company – it can be brilliant at one moment and wrongheaded at another. 2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon’s unprecedented utility. 3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers. 4) Key difference between Amazon’s success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Keywords:
Blue Ocean Strategy, Blue Ocean Shift, Innovation, Growth, Strategy, Corporate Strategy, Failure, Technology Innovation, Market Creation, Competition, Amazon, Online Retailing, Amazon Web Services, Jeff Bezos, Prime.

Related:

published: 11 Dec 2017

  • Topic: Strategy
  • Industry: US Wine Industry
  • Region: Global

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Abstract:
‘Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001’ examines the competitive environment of the US wine industry in 2001, prior to [yellow tail]’s launch as well as the strategic move executed by [yellow tail] that made it the number one imported wine and the fastest growing brand in the history of the US and Australian wine industries.

Pedagogical Objectives:
The case entitled, ‘Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001’ examines the competitive environment of the US wine industry in 2001, prior to [yellow tail]’s launch. The case demonstrates how the industry was overcrowded, highly competitive, and increasingly squeezed at the distribution and retail stages of the supply chain. Even though the industry was intensely competitive, wine manufacturers have systematically competed along the same set of factors that have hardly changed over the last few centuries. In July 2001, Australia’s Casella Winery introduced [yellow tail] into this highly competitive US market. Small and unknown, they had expected to sell 25,000 cases in their first year. In fact, they had sold nine times that amount. By the end of 2005, [yellow tail]’s cumulative sales were tracking at 25 million cases. [yellow tail] soon emerged as the overall best selling 750ml red wine, outstripping Californian, French and Italian brands. This case examines the strategic move executed by [yellow tail] that made it the number one imported wine and the fastest growing brand in the history of the US and Australian wine industries. The case is accompanied by a 2-part video called ‘Creating a Blue Ocean in the US Wine Industry’ that is free for instructor download at www.blueoceanstrategy.com. Part A provides a visual overview of the wine industry setting pre- [yellow tail]. It is a powerful complement to the paper case. Part B explores, through interviews with the principal players behind the launch of [yellow tail], the development and execution of Casella’s blue ocean strategic move. The case and the video dvd come with a comprehensive teaching note and are excellent for both MBAs and executives.

Keywords:
Strategy, Blue Ocean Strategy, Strategic Move, Mature Market, Industry Reconstruction, Growth, Innovation.

Related:

published: 11 Dec 2017

  • Topic: Strategy
  • Industry: Classical Music Industry
  • Region: Global

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Abstract:
For several decades, the classical music industry has been in decline with demand down, costs up and profits shrinking as many orchestras struggle for survival. Against this backdrop, André Rieu and his Johann Strauss Orchestra stand apart. Instead of competing like all the other orchestras, André Rieu has reconstructed market boundaries between classical music and pop concerts, creating a blue ocean of vast new demand. Rieu and his orchestra have stayed on the Billboard Top 25 Tours list for nearly 2 decades, right alongside the likes of Bruce Springsteen and Justin Bieber. His CDs and DVDs have sold more than 40 million copies versus 10,000 copies for a top classical music CD. This case reviews the competitive practice of the classical music industry and illustrates how Andre Rieu gained insight into unlocking new demand by looking to noncustomers of classical concerts, and how he reconstructed industry boundaries and created new market space, making the competition irrelevant. The case comes with a teaching note that reviews major concepts and frameworks of competitive strategy and blue ocean strategy in the context of the case and provides answers to the questions for class discussions.

Pedagogical Objectives:
1) Identify the characteristics and limits of competitive strategic practice in the context of analyzing the conditions of the classical music industry 2) Demonstrate how André Rieu created a blue ocean of new demand in a declining industry through reconstructing market boundaries. 3) Highlight the important role of noncustomer insights in enabling new demand creation 4) Drive home the key principle of blue ocean strategy – value innovation, which requires the simultaneous pursuit of differentiation and low cost 5) Review major concepts, frameworks and tools of blue ocean strategy in the course of analyzing André Rieu’s strategic move.

Keywords:
Classical Music Industry, Declining Industry, Entertainment, New Market Space, Market Creation, Blue Ocean Strategy, Value Innovation, Noncustomers, Demand Creation, Market Reconstruction, Red Ocean Strategy, Competitive Benchmarking, Differentiation, Live Performance.

Related:

published: 25 Sep 2017

  • Topic: Strategy
  • Industry: Catalog and mail-order houses; Computer processing and data preparation and processing services
  • Region: North America

Show details ...

Abstract:
On 30 May 2017, Amazon shares traded at a record high – above $1,000 – surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. It recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, it was ranked the world’s most innovative company and the fourth largest company by market capitalization. The case explores Amazon’s path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon’s at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth.

Pedagogical Objectives:
The case aims to understand the root of a company’s high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon’s growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points: 1) There is no perpetually excellent company – it can be brilliant at one moment and wrongheaded at another. 2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon’s unprecedented utility. 3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers. 4) Key difference between Amazon’s success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Keywords:
Blue Ocean Strategy, Blue Ocean Shift, Innovation, Growth Strategy, Corporate Strategy, Failure, Echnology Innovation, Market Creation, Competition, Amazon, Online Retailing, Amazon Web Services, Jeff Bezos, Prime

Related:

published: 28 Aug 2017

  • Topic: Strategy
  • Industry: Classical Music Industry
  • Region: Global

Show details ...

Abstract:
For several decades, the classical music industry has been in decline with demand down, costs up and profits shrinking as many orchestras struggle for survival. Against this backdrop, André Rieu and his Johann Strauss Orchestra stand apart. Instead of competing like all the other orchestras, André Rieu has reconstructed market boundaries between classical music and pop concerts, creating a blue ocean of vast new demand. Rieu and his orchestra have stayed on the Billboard Top 25 Tours list for nearly 2 decades, right alongside the likes of Bruce Springsteen and Justin Bieber. His CDs and DVDs have sold more than 40 million copies versus 10,000 copies for a top classical music CD.
This case reviews the competitive practice of the classical music industry and illustrates how Andre Rieu gained insight into unlocking new demand by looking to noncustomers of classical concerts, and how he reconstructed industry boundaries and created new market space, making the competition irrelevant. The case comes with a teaching note that reviews major concepts and frameworks of competitive strategy and blue ocean strategy in the context of the case and provides answers to the questions for class discussions.

Pedagogical Objectives:
The teaching of this case aims to
1) Identify the characteristics and limits of competitive strategic practice in the context of analyzing the conditions of the classical music industry
2) Demonstrate how André Rieu created a blue ocean of new demand in a declining industry through reconstructing market boundaries
3) Highlight the important role of noncustomer insights in enabling new demand creation
4) Drive home the key principle of blue ocean strategy – value innovation, which requires the simultaneous pursuit of differentiation and low cost
5) Review major concepts, frameworks and tools of blue ocean strategy in the course of analyzing André Rieu’s strategic move.

Keywords:
Classical Music Industry, Declining Industry, Entertainment, New Market Space, Market Creation, Blue Ocean Strategy, Value Innovation, Noncustomers, Demand Creation, Market Reconstruction, Red Ocean Strategy, Competitive Benchmarking, Differentiation, Live Performance

Related:

published: 30 Jan 2017

  • Topic: Strategy
  • Industry: Automobile industry
  • Region: Asia

Show details ...

Abstract:
This case analyses Tata Motors’ strategic move to create and launch the Tata Nano, exploring the factors behind the project’s earlier success and the reasons for its execution failure. It illustrates the importance of having a strong and aligned set of value, profit and people propositions in order to create and capture a blue ocean. The teaching note reviews how Tata Nano created its exceptional value proposition and attained a viable profit proposition by following the right strategic sequence, and then examines different components of Tata Nano’s people proposition to identify the major causes of the setback in executing its blue ocean strategy.

Pedagogical Objectives:
1) To demonstrate how Tata Nano reconstructed market boundaries across alternative industries and created a commercially viable blue ocean opportunity by following the right strategic sequence. 2) To highlight the importance of matching value and profit propositions with an equally strong people proposition in ensuring the successful execution of a blue ocean strategy. 3) To review major BOS concepts, frameworks and tools in the course of analyzing the Tata Nano strategic move.

Keywords:
Tata Nano, Blue Ocean Strategy, Emerging Economy, Strategic Alignment, Automobile Industry, Value Innovation, Strategic Pricing, Target Costing, Strategy Execution, Execution Failure, Stakeholders, Noncustomers

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