Blue Ocean, Network Effects
Platform Business
an enterprise that creates value by matching external producers and consumers in a way that creates value for all participants, and the depends on the infrastructure of platform that the enterprise manages.
Blue Ocean Strategy
create a new value curve
indirect network externalities
hardware technology standards that depend on software
buyers
path to blue ocean: Look across chain of ___
functional, emotional
path to blue ocean: look across ___ appeal and ___ appeal to buyers
complementary
path to blue ocean: look across ____ products & services
customer groups
path to blue ocean: look across strategic ___ ___
community feedback
platforms benefit form ___ ___
Blue Ocean Strategy
represent untapped market space, the creation of additional demand, and the resulting opportunities for highly profitable growth.
Direct Network Externalities
social networking products
complements
strategy for winning platform wars: Ensure a supply of ___
license
strategy for winning platform wars: ___ the format
marketing
strategy for winning platform wars: aggressively ___ - price promotions - advertising
competitors
strategy for winning platform wars: cooperate with ___
applications
strategy for winning platform wars: leverage killer ___
Red Ocean
Any market share gain comes at the expense of other competitors in the same industry.
value innovaiton
Implementing a blue ocean strategy requires making competition irrelevant and creating a new market space, otherwise known as ___ ___
alternative
Path to blue ocean: look across ___ industries
businesses, consumers
Platform business creates value for both the ____ and for ___
scale
Platforms ___ more efficiently than pipelines by eliminating gatekeepers.
value creation, supply
Platforms unlock new sources of ___ ___ and ___
Red Ocean
Products become commodities, and competition is focused mainly on price
pipeline
The business structure that is linear and has producers at one end and consumers at the other
Red Ocean
The known market space of existing industries. The rivalry among existing firms is cut-throat because the market space is crowded and competition is a zero-sum game.
Create
Value Innovation- Increase Perceived Consumer Benefits Which factors should be created that the industry has never offered?
Raise
Value Innovation- Increase Perceived Consumer Benefits Which of the factors should be raised well above the industry's standard?
Eliminate & Reduce
Value Innovation- Lower Costs
Reduce
Value Innovation- Lower costs Which of the factors should be reduced well below the industry's standard?
Eliminate
Value Innovation- Lower costs Which of the factors that the industry takes for granted should be eliminated?
Raise & Creat
Value Innovation- increase perceived consumer benefits
stuck in the middle
When a blue ocean strategy goes bad, a firm has neither a clear differentiation nor a clear cost-leadership profile. This situation is referred to as
network externalities
When products become more valuable to all users when another user adopts it. Competing technologies languish.
Blue ocean strategy
a business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs in those two distinct strategic positions