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strategy tools / Blue Ocean Four Action Framework

In short

• Create uncontested market space through differentiation and low cost.
• Can be used for: Value Proposition and Customer Focus
• The Blue Ocean Four Action Framework is a strategic tool that focuses on creating uncontested market space by simultaneously pursuing differentiation and low cost. It consists of four key actions: eliminate, reduce, raise, and create. Companies using this framework identify factors to eliminate or reduce, such as unnecessary features or costs, while raising elements that add value to customers. By creating new market factors that set them apart from competitors, organizations can shift from competing in existing market spaces (red oceans) to creating new market spaces with less competition (blue oceans), ultimately driving sustainable growth and profitability.
• Type of tool: Market Positioning
• Expected outcomes:
  • Creation of uncontested market space
  • Simultaneous pursuit of differentiation and low cost
  • Identification and elimination of unnecessary features or costs
  • Reduction of factors that do not add value to customers
  • Elevation of elements that enhance customer value
  • Development of new market factors to set the company apart from competitors
  • Shift from competing in red oceans to creating blue oceans
  • Less competition in new market spaces
  • Sustainable growth and profitability
  • Strategic differentiation and competitive advantage

In detail

The Blue Ocean Four Action Framework is a powerful strategic tool that revolutionizes traditional business thinking by guiding organizations towards creating uncontested market space. Developed with the aim of achieving strategic differentiation and competitive advantage, this framework encourages companies to simultaneously pursue differentiation and low cost, thereby propelling them into uncharted waters of innovation and growth.

At the core of the Blue Ocean Four Action Framework are four key actions: eliminate, reduce, raise, and create. These actions serve as guiding principles for organizations looking to break free from the constraints of existing market boundaries and carve out new spaces where competition is minimal or non-existent.

The first action, 'eliminate', prompts companies to identify and eliminate factors that are deemed unnecessary or redundant in their products or services. By shedding these excess elements, organizations can streamline their offerings and focus on what truly matters to their customers, thereby reducing complexity and costs.

The second action, 'reduce', encourages companies to identify areas where costs can be minimized without compromising the value delivered to customers. By optimizing processes, cutting down on non-essential expenses, and finding efficiencies in operations, organizations can achieve a leaner cost structure while maintaining or even enhancing the quality of their offerings.

The third action, 'raise', challenges companies to elevate elements that are valued by customers and differentiate them from competitors. This could involve enhancing product features, improving service levels, or delivering exceptional customer experiences that set the organization apart in the eyes of consumers.

The final action, 'create', pushes organizations to think outside the box and innovate in ways that create entirely new market factors. By introducing novel concepts, services, or solutions that address unmet customer needs or redefine industry standards, companies can position themselves as pioneers in unexplored market spaces.

By leveraging these four actions, companies using the Blue Ocean Four Action Framework can shift their focus from competing in saturated, cut-throat markets (red oceans) to creating new, uncontested market spaces (blue oceans). This strategic shift enables organizations to break free from the constraints of traditional competition, drive sustainable growth, and secure long-term profitability by offering unique value propositions that resonate with customers on a profound level.

In essence, the Blue Ocean Four Action Framework empowers organizations to challenge the status quo, think innovatively, and chart their own course towards success in uncharted waters of opportunity and growth.

How to use it

1. Identify your current market space and competitors to understand where you stand in the industry.
2. Brainstorm factors that can be eliminated or reduced to cut unnecessary costs and features that do not add value to customers.
3. Identify elements that can be raised to enhance customer value and differentiate your offering from competitors.
4. Create new market factors that set your company apart from competitors and appeal to a different customer segment.
5. Implement the changes identified in steps 2-4 to shift from competing in existing market spaces (red oceans) to creating new market spaces with less competition (blue oceans).
6. Continuously monitor and adjust your strategy to ensure sustainable growth and profitability in the uncontested market space you have created.

Pros and Cons

When to Use

Businesses evolve from a simple idea into complex entities that undergo various stages of growth, learning, and adaptation before ultimately reinventing themselves to remain competitive. Throughout these stages, leveraging the right tools can significantly enhance success and efficiency. Below are the typical stages highlighting the stages where this tool will be useful. Click on any business stage to see other tools to include in that stage.

Related Tools

• Blue Ocean Strategy Canvas
• Value Curve Analysis