Blue Ocean Strategy: The Four Actions Framework

Understanding Blue Ocean Strategy

Blue Ocean Strategy is a powerful framework for businesses aiming to create untapped market space rather than competing in crowded industries. Its foundation lies in redefining industry boundaries and innovating value through the Four Actions Framework.

The Four Actions Framework Overview

This framework helps companies systematically reconstruct buyer value elements to unlock new demand and create a “blue ocean” of uncontested market space.

1. Eliminate: Remove Factors Your Industry Takes for Granted

• Identify elements in your industry that have become standard but no longer add significant customer value.
• Avoid blindly including legacy features inherited from past competition.
• Eliminating these elements reduces costs and differentiates your offering.

For example, a software company might eliminate over-complex features that confuse users but don’t enhance the core experience.

2. Reduce: Lower Certain Factors Below Industry Standards

• Evaluate if your product or service is over-designed with features customers don’t truly need.
• Reducing excessive features or service elements cuts costs and streamlines your offering.
• This prevents wasteful spending on unnecessary enhancements that do not proportionally add value.

For instance, reducing overly personalized packaging can save costs without impacting customer satisfaction in fast-moving consumer goods.

3. Raise: Elevate Customer Value Above Industry Norms

• Discover compromises customers accept in your industry and raise the standards.
• Enhance features or service elements that customers care deeply about but are underserved.
• Raising these factors creates a competitive advantage and can dominate your market segment.

Example: A hotel chain might raise customer service responsiveness and cleanliness standards beyond the typical industry level to attract loyal guests.

4. Create: Introduce New Factors Not Offered by Competitors

• Identify opportunities to innovate with completely new services or product features.
• Creating fresh value propositions that your competitors have overlooked opens uncontested market space.
• This often leads to new customer demand by addressing unmet or unarticulated needs.

Example: A fintech startup might offer integrated budgeting tools alongside payments — a feature no other competitor currently provides.

Benefits of Applying the Four Actions Framework

• Lower your cost structure by eliminating and reducing unnecessary elements.
• Increase customer value and satisfaction by raising and creating new elements.
• Shift your strategic focus from competing within existing boundaries to creating new market space.
• Build a strong competitive edge by becoming a market leader in innovation and value delivery.

Industry-Specific Examples

Technology Sector

• Eliminate legacy features that complicate usability.
• Reduce support packages for low-impact areas.
• Raise system security and privacy standards.
• Create AI-driven automation tools not offered by competitors.

Retail Sector

• Eliminate costly return policies that are under-utilized.
• Reduce product variety in slow-moving categories.
• Raise in-store experience and personalized recommendations.
• Create loyalty programs integrated with mobile ordering apps.

Step-by-Step Guide to Use the Four Actions Framework

Tips for Successful Implementation

• Engage cross-functional teams for diverse perspectives on industry norms.
• Use customer feedback and market research to identify true value drivers.
• Test hypotheses through pilot programs before full-scale implementation.
• Continuously monitor competitors to spot emerging blue ocean opportunities.

Expand Your Strategy Toolbox

Applying Blue Ocean Strategy alongside other business growth tools ensures comprehensive planning and execution. Explore resources such as the Small Business Growth Strategy Pack as well as detailed financial and marketing plan templates. These combined tools help align your innovation efforts with financial and operational planning for maximum impact.

Enhance your strategic planning with the Small Business Growth Strategy Pack to discover practical, actionable frameworks that complement the Four Actions Framework in creating unique market spaces and boosting growth.

For a deeper dive into pricing and profitability strategies that support successful blue ocean initiatives, consider the 101 Ways to Optimize Pricing and Profit guide.