BLUE OCEAN STRATEGY
Putting it all together
Strategic Innovation
Blue Ocean Strategy
Business Model Innovation
STRATEGIC INNOVATION
BUSINESS MODEL INNOVATION
Who
What
How
is your costumer?
products & services
do you offer?
do you do this?
A quick intro
1
2
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based on "Reshaping Strategy" by Marc Sniukas download as ebook at http://www.sevenprophets.com/
based on "Blue Ocean Strategy" by Chan Kim and Renee Mauborgne
Harvard Business School Press
based on Alex Osterwalder's Business Model map
more at http://www.businessmodelhub.com
The idea
by Marc Sniukas
www.sniukas.com
www.sevenprophets.com
twitter.com/sniukas
The traditional approach to strategy no longer offers competitive advantage. Strategic Innovation offers new tools, and a whole new mind set on strategy. The 3 guiding questions who/what/how offer the big picture. My approach offers "deep dive" solutions to each of these three.
The idea:
Blue Ocean Strategy is based on the idea that companies need to create new market space, i.e. Blue Oceans, instead of fighting to conquer market share from competitors in bloody Red Oceans.

The key is "value innovation":
= the simultanuous pursuit of
differentiation + low cost 
The outcome of strategic innovation is either
(1) the creation of new markets
(2) a new business model
(3) increased value for both the customer and the company,
or a combination of these three. 

You could say that strategic innovation is the umbrella for both
Blue Ocean Strategy and Business Model Innovation
(and other concepts like disruptive innovation for example).
The authors offer a mix of tools, the most prominent (and actually easy to grasp)
is the strategy canvas, and approaches (like the 4 action framework) to enable the
creation of blue oceans, i.e. new markets where competition doesn't exist just yet.
Combined with the right pricing for the masses, these markets are to become the new "standard" (quite similar to the idea of disruptive innovation).

You can see an overview of all the tools at:
http://www.blueoceanstrategy.com/about/tools/toolbox.html
The idea:
The original idea was to create a framework for describing and explaning a company's business model. The framework has then been used not only to describe existing models, but also create new ones. Below is a picture of the model.
Personnally I tend to think of this framework as the one putting all the pieces together, outlining the new business model resulting from using strategic innovation thinking and tools, be they the who/what/how framework, BOS, disruptive innovation, or just plain creative thinking about your strategy.

Currently it surely offers the most comprehensive (and visual!) presentation of a business model, making it easy to explain the parts.
Check for more resources
on innovation!
Putting it all together
WHAT
offer?
products & services do you
WHO
HOW
Note: although we'll go through the framework in a sequence, strategic innovation, the creation of blue oceans or a new business model can start at any point. Maybe you have a good idea for offering an existing product to a new market (think Wii), or a new way of doing things (think Dell or Amazon),  or you just have a completely new answer for all 3 dimensions (think the www).
is your
customer?
do you manufacture & offer your products & services?
What is your
infrastructure?
Distribution Channels
The Value Proposition
Target Customer
Customer Relationship
Partner Network
Revenue Stream
Cost Structure
Core Competencies & Capabilities
Value Configuration
What about the
money?
= an overall picture of all your companys services and products.
Blue Ocean Strategy tools and approaches to use: 
strategy canvas to illustrate the product & service attributes
4 action framework to eliminate, reduce, raise, create attributes
6 stages of the buyer experience cycle (buyer utility map) to identify blocks to customer satisfaction. Usually leads to ideas for e.r.r.c. or completely new services.
the principles for reconstructing market boundaries: look across alternative industries, strategic group within your industry, complimentary products and service offerings to find inspiration and reasons why customers are trading up or down.
Questions to ask:
some questions to inspire your inspiration will come.
In the meantime, check www.sevenprophets.com for
questions to get the discussion going.

Christensen would ask "What is the job the customer wants to get done?"
Switch the perspective
How do you think about your product?
= the folks you want to offer value to!
Blue Ocean Strategy tools to use:
the 3 tiers of customers
1st tier = soon-to-be noncustomers (ready to switch whenever somebody else has a better offer)
2nd tier = refusing noncustomers (can't  afford to buy, don't have access, to complicated to use)
3rd tier = noncustomers nobody has ever thought of seeing as a customer for this product (think Wii)

Which customers do you target?
= what kind of relationship do you want to have with your customers?
= what's the image you want to have?
Blue Ocean Strategy tools:
none specific that I would be aware of. 
The buyer utility map surely touches this area.
Otherwise, hey, you want to be seen as the most innovative
and offering the best value, no?
Other tools:
I like the Treacy & Wiersema positioning options (actually Kaplan & Norton used these also for the BSC approach)
product leadership (the most high end state of the art product)
operational excellence (speed, efficiency, low cost)
customer intimacy (offering the best customer service and relationship)
of course these don't go well with the BOS framework, as according to that logic, you'll have to deliver in all three dimensions.
= how do you get in touch with your customers?
= how do you communicate with them?
= how to you get the product / service to them?
Blue Ocean Strategy tools:
my adapted version of the buyer utility map

Do all your channels address
the buyer experience cycle? 
Note: I put all of the logistical questions into the "How" category
in my orginial model. You'll find more inspiration there.
= what capabilities do you need to run the business model?
= what capabilities do you have that could be used to innovate in the business model?

Christensen model includes:
Key resources
People
Technology, products
Equipment
Information
Brand

plus Key processes:
design
product development
manufacturing
marketing
hiring
training
IT
rules and metrics
opportunity size needed for investment
approach to customer

= lays out the network you're embedded in
= where do you need partners having the competencies
you don't have?
Blue Ocean Strategy tools to use:
Blue Ocean Strategy tools to use:
reducing and eliminating product and service attributes not valued by customers, will also reduce your cost.
Blue Ocean Strategy tools to use:
raising and creating certain attributes will increase buyer value and revenue.
Is your price easily accessible to the mass of buyers?
"Price corridor of the mass" map
= how the activities are aligned and fit together.
Reinventing HOW:
Have you considered?
= the cost of running your business model
= how revenue will be generated
= linked to the value you offer your customers
and the channels through which you're selling
Here's a little overview of the different dimensions
involved and some guiding questions.
Thanks for your attention!
in case you got any questions, please email me at marc@sniukas.com
for more like this, visit
http://www.sevenprophets.com
Use arrows to navigate
the presentation...
version 2: added Clayton Christensen's Business Model framework
Newest addition:
Clayton Christensen's Business Model framework based on
"Reinventing Your Business Model" by Mark W. Johnson, Clayton M. Christensen, and Henning Kagermann
Harvard Business Review, December 2008
The Idea:
This framework has 4 building blocks,
not so different from Osterwalder's,
but rather on a more aggregated level.
It includes, of course, Christensen's idea of the job to be done.
Customer Value Proposition:
The Profit Formula:
including:
Revenue Model
Cost Structure
Margin Model
Resource Velocity
= additions to the Osterwalder model
Key Resources:
including:
People
Technology
Equipment
Information
Channels
Parnterships, alliances
Brand
Key Processes:
including:
Processes
Rules and Metrics
Norms
Although I consider the Osterwalder model to be a more
logical representation of a business model, as it puts the
piece in a good, easy to understand, structure, the Christensen
model offers a couple of additions.
including:
Target Customer
Job to be done
Offering
Christensen Model
Profit Formula:
Revenue Model: How much money can be made?
Cost Structure: How costs are allocated
Margin Model: How much each transaction needs to achieve
Resource Velocity: How quickly resources need to be used to support target volume.
BOS favors to start completely anew, without considering any assets you might have at the moment. 

You might also get some inputs by using the 4 action framework (eliminate, reduce, raise, create) in this context.