The Four Actions Framework for Blue Ocean Strategy
The 4 action framework is a key tool in the Blue Ocean Strategy process made up of the four strategic moves
- Eliminate
- Reduce
- Raise
- Create
This tool helps create new buyer value elements thus breaking the tradeoff between differentiation and low cost. Once the four actions have been decided, a future Blue Ocean Strategy value curve can be created.
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Anonymous
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Superb Example of Using the 4 Actions Framework In the interesting blog of Kim & Mauborgne, I discovered we can actually use the 4 Actions Framework to deepen our thinking about our post-Covid strategy...
Consider these 4 questions:
- Which factors that the industry takes for granted should be ELIMINATED?
- Which factors should be REDUCED well below the industry's standard?
- Which factors should be RAISED well above the industry's standard?
- Which factors that the industry has never offered should be CREATED?
The first two questions (actions) prompt managers to find ways to drop their cost structure:
- The "Eliminate" question forces them to consider disregarding factors that the industry has long believed central to competition. Even though these factors no longer add value, or even decrease it, they are rarely questioned because of long-held industry practice. Because these factors buttress an organisation's cost structure for little to no gain, substantial cost savings can be made by eliminating them.
- The "Reduce" question pushes managers to determine whether products or services have been overdesigned in the race to match and beat the competition. Here, organisations over-serve customers, increasing their cost structure for no gain. By reducing these factors, costs can be further decreased.
The third and fourth questions drive managers to increase buyer value:
- The "Raise" question inspires them to eradicate the compromises customers are forced to make, which are usually caused by an industry's failure to see that consumers want more of some elements than the standard offering provides.
- The "Create" question challenges managers to offer entirely new kinds of value for buyers and to create new demand by converting non-customers into customers.
Reference: The W. Chan Kim & Renée Mauborgne Blog
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