BEX5060 Chap.10 Blue Ocean Strategy and Business Models
Blue Ocean Strategy and Business Models
Blue Ocean Strategy looks for a new basis of competition rather than a stronger position on every existing factor. This chapter uses the strategy canvas and eliminate-reduce-raise-create framework to build a distinct value curve, then uses the Business Model Canvas to test whether the organisation can deliver and capture that value. Every proposed factor is tied to buyer evidence, operational capability and cost.
Interview findings are propagated across connected canvas blocks instead of being treated as isolated edits.
What this chapter covers
- 01
Strategy canvases and value curves
- 02
Buyer value and noncustomers
- 03
Eliminate-reduce-raise-create
- 04
Business Model Canvas links
- 05
Revenue and cost viability
- 06
Evidence-driven model iteration
Worked example · free
Design an institutional pulse-ingredient offer
- +1Eliminate consumer flavour variants and promotional retail packaging because they do not serve the institutional job.
- +1Reduce decorative branding and pack-size variety to lower complexity and fund the chosen service features.
- +2Raise batch consistency, allergen documentation and delivery reliability, which institutional buyers use to manage operational risk.
- +2Create a menu-planning data pack linking ingredient format to preparation yield and nutrition, subject to buyer testing.
- +2Use a specialist distributor for access, preserve technical onboarding, and model whether contract revenue covers processing, testing, support and partner margin.
Key terms
- Strategy canvas
- A visual comparison of the relative offering level across the factors on which an industry competes.
- Value curve
- The line on a strategy canvas that represents how an offer allocates attention and investment across competitive factors.
- Value innovation
- A configuration that increases meaningful buyer value while changing the cost structure rather than adding every possible feature.
- Four actions
- The eliminate, reduce, raise and create questions used to redesign a value curve and force trade-offs.
- Customer segment
- A defined group of buyers or users with sufficiently similar needs, behaviour and economic value to support a tailored offer.
- Business model
- The connected system through which an organisation creates, delivers and captures value.
Blue Ocean Strategy and Business Models FAQ
Is Blue Ocean Strategy just product differentiation?
No. Differentiation can add features while preserving the existing competitive pattern and cost base. Blue Ocean analysis asks which factors to eliminate, reduce, raise and create for a defined buyer or noncustomer. The new curve must solve a meaningful problem and have a viable economic logic.
When is a Business Model Canvas complete?
Not when every box has text, but when the important connections and risky assumptions are explicit. The segment must value the proposition, the channel must deliver the relationship, resources and activities must make delivery repeatable, and realistic revenue must cover the cost structure and partner claims.
How should interview evidence change the canvas?
Identify the assumption rejected, then propagate the finding across every affected block. A channel change may alter the relationship, partner, activity, data, cost and revenue model. Record the previous belief, evidence, revision, new risk and next test so the learning remains auditable.
How should I choose factors for a strategy canvas?
Use factors that buyers recognise and on which competitors make meaningful trade offs. Define one consistent scale, compare offers using the same evidence and avoid flattering labels that hide cost. A factor belongs when changing it could alter buyer value, delivery cost or switching. The curve should make strategic difference visible rather than display every product feature.
Which Business Model Canvas dependency should be tested first?
Find the connection whose failure would damage several blocks at once. A distributor that controls customer access, service and data may determine the value proposition, relationship, activities and revenue model. Test that link through behaviour, economics or a limited pilot. Completing every box is less useful than resolving the dependency that could collapse the system.
Assessment move
Choose an agrifood category and list the factors competitors emphasise. Draw a strategy canvas from observable evidence, not adjectives. Use the four actions to create a new curve, forcing at least one real reduction or elimination. Then transfer the offer into a Business Model Canvas and draw arrows between segment, value, channel, relationship, resources, activities, partners, revenue and cost.
Mark every block as verified, inferred or untested. Create one interview finding that contradicts the model and propagate the change through the connected blocks. Finish by testing whether the new value is worth paying for and whether the eliminated or reduced factors genuinely fund delivery. If the proposal needs every factor to improve, revise until the trade-offs are clear.
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