In Red Oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. As a result products/services become commodities and companies compete on price. In a Blue Ocean you change the playing field of strategy. Your product/service must Raise and Create customer value (Gain) and simultaneously Reduce and Eliminate features or services that are less valued, or not valued at all, the customer (Pain). The Four Actions Framework is used to help create value innovation and break the value-cost trade-off.
It is a very interactive and engaging tool that can easily be understood and used. It is also a great tool to identify whether you are too much focusing on raising and creating value, and as a result increase costs and over-engineering a product or service.
Pain relievers: Customer experience a lot of PAINS which you can’t solve all. Focus on those headaches that matter most and are, until now, insufficiently addressed.
Gain Creators: They expect and desire value from your products and services. Focus on those GAINS that matter most and make the true difference.
Keep in mind that products and services do not create value in absolute terms. It is always relative to the customers job which means that you should understand what and why your customers are trying to achieve.
Question 1: Which factors should be reduced well below the industry’s standard? These factors refer to products and services that companies may have over-designed in order to beat the competition. Such factors bring too much baggage to the cost structure of a company, rendering any added value worthless.
Question 2: Which of the factors that the industry takes for granted should be elim¬inated? These are the factors that companies invest heavily into, but do not increase competitiveness and create little or no profit. The Frame¬work also forces companies to eliminate factors that may have made more sense and provided more value in the past than they do today.
Question 3: Which factors should be raised well above the industry’s standard? These are the factors that bring value to customers but until now have been ignored and/or compromised by the industry.
Question 4: Which factors should be created that the industry has never offered? These are the factors that must be discovered to provide the buyer with new sources of customer value.
Now create the Customer Value Curve and test your value proposition hypotheses with (potential) customers, This is the first stage in the customer discovery process. Pivot the value proposition until you can prove it works!
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