blue ocean strategy Noncustomer Exercise INSEAD Blue Ocean Strategy Institute
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1 blue ocean strategy Noncustomer Exercise
2 Life in the 1900s
3 Life in the 1900s
4 Life in the 1900s
5 Life in the 1900s
6 Shaving in the 1900s
7 Shaving in the 1900s
8 Shaving in the 1900 s
9 Shaving in the 1900 s
10 Shaving in the 1900s
11 Shaving in the 1900 s
12 Shaving in the 1900s Obtained with permission from Roy Export Company Establishment
13 Shaving in the 1900s Obtained with permission from Roy Export Company Establishment
14 Who are the existing customers of the industry
15 Who are the existing customers of the industry Medium/high income
16 Who are the existing customers of the industry Medium/high income White collar workers
17 Who are the existing customers of the industry Medium/high income White collar workers Barbers
18 What are the key competing factors of the industry?
19 What are the key competing factors of the industry? Life lasting razors
20 What are the key competing factors of the industry? Life lasting razors Forged blades
21 What are the key competing factors of the industry? Life lasting razors Forged blades Size of blade
22 What are the key competing factors of the industry? Life lasting razors Forged blades Size of blade Price of razor
23 Who are the noncustomers?
24 Who are the noncustomers? Occasional shavers
25 Who are the noncustomers? Occasional shavers Low income
26 Who are the noncustomers? Occasional shavers Low income Women
27 The Three Tiers of Noncustomers Shaving Market
28 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers
29 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers 2 nd Tier Noncustomers: low income
30 The Three Tiers of Noncustomers Shaving Market 1st Tier Noncustomers: occasional shavers 2 nd Tier Noncustomers: low income 3 rd Tier Noncustomers: women
31 Shaving was not yet a common habit
32 Shaving was not yet a common habit Many people found it a hassle to shave
33 In 1900, less than 26 million people lived in metropolitan cities where there were barbershops
34 1 st Tier: Occasional Shavers The remaining 66 million lived in nonmetropolitan territory and could not easily go to the barbershop
35 2 nd Tier: Low Income 40% of total population had low incomes
36 2 nd Tier: Low Income 40% of total population had low incomes 2 million people unemployed
37 2 nd Tier: Low Income 40% of total population had low incomes 2 million people unemployed 30 million below the poverty level
38 3 rd Tier: Women 37 million (49%)
39 3 rd Tier: Women 37 million (49%) 12 million between 20 39
40 3 rd Tier: Women 37 million (49%) 12 million between Can they realistically go to the barbershop?
41 What are the factors that kept them from shaving?
42 What are the factors that kept them from shaving? Price
43 What are the factors that kept them from shaving? Price Safety
44 What are the factors that kept them from shaving? Price Safety Ease of use
45 What are the factors that kept them from shaving? Price Safety Ease of use Maintenance free
46 What are the factors that kept them from shaving? Price Safety Ease of use Maintenance free Fashion and image
47 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Reduce Create
48 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Life lasting razors Forged blade Reduce Create
49 Acting on our understanding of noncustomers ERRC Grid Eliminate Raise Life lasting razors Forged blade Reduce Create Size of blade Price
50 Acting on our understanding of noncustomers ERRC Grid Eliminate Life lasting razors Forged blade Raise Safety Ease of use Reduce Create Size of blade Price
51 Acting on our understanding of noncustomers ERRC Grid Eliminate Life lasting razors Forged blade Raise Safety Ease of use Reduce Size of blade Price Create Maintenance free Fashion & image
52 Gillette s Safety Razor
53 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades
54 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades The razor required a small initial investment
55 Gillette s strategic move In 1903 Gillette invented a safety razor with disposable blades The razor required a small initial investment Gillette changed the business model of the industry
56 Gillette s strategic move FROM FROM TO
57 Gillette s strategic move FROM High priced razor FROM TO Low priced razor
58 Gillette s strategic move FROM High priced razor Forged blade FROM TO Low priced razor Stamped steel blade
59 Gillette s strategic move FROM High priced razor Forged blade Thick and wide blade FROM TO Low priced razor Stamped steel blade Narrow and thin blade
60 Gillette s strategic move FROM High priced razor Forged blade Thick and wide blade Unsafe FROM TO Low priced razor Stamped steel blade Narrow and thin blade Safe
61 Gillette s strategic move FROM FROM TO
62 Gillette s strategic move FROM Difficult FROM TO Easy
63 Gillette s strategic move FROM Difficult FROM TO Easy Complex honing and stropping process Disposable blade
64 Gillette s strategic move FROM Difficult FROM TO Easy Complex honing and stropping process Disposable blade Unfashionable Fashionable
65 Strategy canvas High Low
66 Strategy canvas High Straight Razor Low
67 Strategy canvas High Gillette s Safety Razor Straight Razor Low
68 Strategy canvas High Eliminate Gillette s Safety Razor Straight Razor Low
69 Strategy canvas High Eliminate Reduce Gillette s Safety Razor Straight Razor Low
70 Strategy canvas High Eliminate Reduce Raise Gillette s Safety Razor Straight Razor Low
71 Strategy canvas High Eliminate Reduce Raise Create Gillette s Safety Razor Straight Razor Low
72 Breaking the value cost trade off
73 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Cost savings Low cost
74 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion & image Cost savings Low cost Differentiation
75 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion & image Low pricing Cost savings Low cost Differentiation
76 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion& image Low pricing Cost savings Low cost Differentiation High volume Attracting the mass
77 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of Use Maintenancefree Fashion& Image Low pricing Cost savings Low cost Create a blue ocean Differentiation High volume Attracting the mass
78 Breaking the value cost trade off Life lasting razors Forged blade Size of blade Safety Ease of use Maintenancefree Fashion& image Low pricing Cost savings Low cost Create a blue ocean Differentiation Replacement of blades sales High volume High profitable growth Attracting the mass
79 Annual sales, Blades millions
80 Annual sales, Blades millions 6 6m m 3.4m m 847, ,
81 Annual sales, Razors thousands
82 Annual sales, Razors thousands , , , , , ,
83 Gillette s strategic move
84 Gillette s strategic move
85 Gillette s strategic move
86 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable
87 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable Lengths of skirts and dresses reduced
88 Increasing the size of its blue ocean In the 1910s, hair removal for women started to become fashionable Lengths of skirts and dresses reduced This triggered Gillette to introduce the Milady Décolletée
89 Gillette s strategic move
90 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly
91 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave
92 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave Gillette partnered with the US army, selling 3.5m razors and 32m blades
93 Increasing the size of its blue ocean During WWI, soldiers needed to be clean shaven in order to fit the gas mask properly It became imperative for them to shave Gillette partnered with the US army, selling 3.5m razors and 32m blades When they returned home they were heroes. It became fashionable to be clean shaven.
94 Annual sales, Blades million m 3.4m 6m m 847,400 98,
95 Annual sales, Blades million 17 17m m 3.4m 6m m 847,400 98,
96 Annual sales, Razors thousands , , , , , ,
97 Annual sales, Razors thousands m , , , , , ,
98 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery
99 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery Bloodletting was a popular medical practice
100 Shaving Trivia: Origins of the barber pole Before 1745, barbers also performed surgery Bloodletting was a popular medical practice The spiraling red and white stripes symbolized blood and bandages
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