As a third year International Business & Management student, I completed my six month specialisation in Innovation & Leadership in Leeuwarden, Netherlands. I had the opportunity to function as consultant for various startup and existing companies. I enjoyed working with the Business Model Canvas and applying Blue Ocean Strategies. This scientific article represent how I believe that these two approaches complement each other in the process of developing and innovating business models.
1. Why
the
Business
Model
Canvas
complements
Blues
Ocean
Strategy
Author:
Business
Model
Canvas
&
Blue
Ocean
Strategy
Page 1 of 7
Gillain
Berry
The
author
of
this
article
has
been
studying
the
book
of
Business
Model
Generation
by
Alexander
Osterwalder
for
over
five
months
now.
As
a
result,
the
author
has
looked
to
supporting
books
related
to
this
theory,
in
order
to
deepen
her
knowledge
in
the
aspect
of
Business
Development.
As
a
result,
the
author
has
learned
about
the
Blue
Ocean
Strategy
and
experienced
how
well
it
works
with
the
Business
Model
Canvas.
Therefore,
this
article
is
meant
to
demonstrate
how
the
Business
Model
Canvas
complements
Blue
Ocean
Strategy
and
vice
versa,
for
the
generation
or
innovation
of
a
Business
Model.
Business
Model
Canvas
Business
Model
Canvas
is
a
tool
that
that
stems
from
the
book
Business
Model
Generation.
Basically
a
company
can
use
this
tool
to
assess
their
business
as
whole
system.
This
is
because
the
Business
Model
canvas
creates
a
visual
holistic
view
of
how
the
changes
from
one
building
block,
affects
another
building
block
within
the
Business
Model.
The
Business
Model
Canvas
consists
of
a
total
of
nine
building
blocks.
The
right
side
of
the
Canvas
is
about
value
creation
and
the
left
side
if
the
canvas
is
about
reducing
cost
by
increasing
efficiency.
There
are
various
ways
to
innovate
the
Canvas.
Such
as
focusing
on
Epicenters
within
the
Business
Model,
asking
“what
if”
questions,
creating
future
scenarios
and
the
use
of
an
Empathy
Map
tool.
For
the
Business
Model
Generation
a
brainstorm
or
the
same
methods
as
previously
stated
can
also
be
used.
The
authors’
favourite
innovation
technique
is
the
future
scenarios
and
the
empathy
map
together
with
the
value
proposition
designer.
This
is
because
the
empathy
map
and
value
proposition
designer
allows
a
company
to
focus
on
what
the
buyers
frustrations
and
how
the
value
proposition
within
the
Business
Model
is
solving
their
gains.
Matching
the
needs
of
the
buyers
together
with
the
offerings
of
the
company
Concept
of
Blue
Ocean
Strategy
Blue
Ocean
Strategy
is
geared
at
analytically
examining
an
industry
in
order
to
increase
value
while
minimizing
cost
simultaneously.
This
method
of
value
creation
and
the
exploration
of
non-‐customers
create
a
blue
ocean
“new
market”,
the
business
model
canvas
then
shows
a
complete
image
of
all
the
dependable
factor
in
order
to
ensure
alignment.
The
non-‐
customers
for
this
new
market
can
even
be
isolated
in
a
Business
Model
Canvas
together
with
the
development
of
an
empathy
map
in
order
to
gain
a
deeper
insight.
First
method
and
approach
Blue
Ocean
Strategy
first
uses
the
Strategy
Canvas
to
diagnose
the
industry
and
identify
what
the
action
framework
is.
The
2. Business
Model
Canvas
&
Blue
Ocean
Strategy
2
strategy
canvas
illustrates
the
current
situation
of
the
industry
in
question
and
shows
in
which
aspect
the
industry
in
competing
on.
With
the
strategic
canvas
in
view,
the
company
can
take
a
deeper
look
for
alternatives
and
non-‐customers
with
the
help
of
the
four
actions
framework
and
the
eliminate-‐educe-‐
raise-‐create
grid.
With
the
strategic
canvas
complete,
the
next
step
is
to
apply
the
four
action
framework
in
order
to
test
the
industries
logic
and
business
model.
In
order
words,
Blue
Ocean
Strategy
creates
Value
Innovation
with
the
four
actions
framework
of
the
eliminate-‐educe-‐raise-‐create
grid.
It
is
all
about
rising
above
industry
standards,
creating
new
offerings,
eliminating
what
is
no
longer
necessary,
and
reducing
elements
below
industry
standards
within
the
strategy
canvas.
The
objective
is
not
to
compete
with
the
industry,
but
about
surpassing
what
is
traditionally
expected
and
accepted
to
create
new
markets.
A
new
strategic
canvas
with
the
changes
in
market
approach,
price
and
value
is
then
matched
further
with
the
current
situation.
It
is
the
author’s
opinion
that
it
is
possible
to
create
a
business
model
canvas
of
this
new
market
approach.
This
can
be
accomplished
by
gathering
the
information
of
the
new
strategy
canvas
and
the
eliminate-‐reduce-‐raise-‐create
grid
and
filling
this
information
in
a
Business
Model
Canvas.
This
will
allow
the
company
to
question
each
individual
building
block
of
the
Business
Model
Canvas
in
correlation
with
the
created
blue
ocean.
As
previously
stated,
it
is
the
authors
opinion
that
the
Business
Model
Canvas
gives
the
opportunity
to
isolate
the
non-‐
customer
segment
identified
in
the
specified
industry,
in
order
to
assess
the
level
of
value
innovation
within
the
company’s
overall
Business
Model.
With
the
non-‐customers
segment
from
the
blue
ocean,
in
the
business
model
canvas,
the
company
can
align
the
cost
side
together
with
the
Channels,
Relationship
and
the
Value
Proposition
for
the
none-‐customer
segment.
Second
method
and
approach
However,
it
is
the
opinion
of
the
author
that
there
are
different
ways
in
using
the
Business
Model
Canvas
and
Blue
Ocean
Strategy.
The
author
of
this
article
has
worked
for
a
group
called
the
Dutch
Classics
Boats.
This
company
wanted
to
create
a
viable
business
model
as
a
facilitating
bureau
for
boatyards.
After
two
validations
processes
that
enabled
further
innovation
of
the
company’s
different
business
ideas,
the
author
used
Blue
ocean
strategy
to
further
innovate
the
first
draft
Business
Model
Canvas
with
the
advice
for
that
company.
Therefore
is
it
also
the
author’s
experience
that
Blue
Ocean
Strategy
can
be
used
to
further
innovate
a
existing
business
model
canvas.
As
a
result,
it
can
be
stated
that
Blue
Ocean
Strategy
can
also
be
used
for
both
Business
Model
Generation
and
Business
Model
Innovation.
The
disadvantage
to
using
Blue
Ocean
Strategy
alone
is
that
it
is
easier
to
lose
sight
of
the
big
picture.
In
order
to
see
how
the
changes
would
affect
all
the
nine
building
block.
Secondly,
by
being
able
to
see
the
bigger
picture
with
the
Business
Model
Canvas,
this
makes
it
easier
to
verify
and
create
a
proper
alignment
of
the
Blue
Ocean
Business
Model.
The
method
used
with
the
case
of
the
facilitating
Bureau
3. Business
Model
Canvas
&
Blue
Ocean
Strategy
Page 3 of 7
is
that
the
Blue
Ocean
was
used
as
an
innovation
technique,
and
the
previously
stated
route
is
a
method
of
Business
Model
Generation.
What
determines
whether
Blue
Ocean
Strategy
is
a
innovation
or
Generation
analytical
tool
highly
depends
on
the
sequence
that
is
used.
StartUp
and
existing
companies
Never
the
less,
in
order
to
guarantee
the
long-‐term
viability
of
a
Business
Model
the
author
recommends
that
a
startup
company
should
first
explore
the
possibility
of
creating
a
blue
ocean.
This
is
simply
because
this
guarantee
that
the
initial
business
idea
is
a
completely
new
market
from
the
beginning.
Then
the
startup
can
further
move
on
the
working
out
the
business
idea
in
the
business
model
canvas.
On
the
other
hand,
if
the
company
has
already
exist
and
has
been
competing
in
an
Industry
for
years,
then
they
can
use
blue
ocean
strategy
to
innovate
a
product
or
service
and
then
isolate
this
product
or
service
together
with
its
customer
segment
in
the
Business
Model
Canvas
for
further
alignment
and
the
holistic
view.
Refinement
of
Business
model
In
terms
of
developing
a
strong
strategy
for
the
company,
the
blue
ocean
strategy
helped
to
refocus
and
challenge
current
market
norms
and
condition.
The
eliminate-‐reduce-‐raise-‐create
was
very
effective
in
creating
the
mind
set
to
facilitate
this
process.
It
is
the
opinion
of
the
author
for
this
article
that,
with
a
blue
ocean
idea
to
applying
the
blue
ocean
strategy
and
then
incorporating
these
result
into
a
business
model
is
just
the
beginning.
The
book
by
Osterwalder
on
the
topic
of
Business
Model
Generation,
talks
about
the
importance
of
pivoting
the
business
idea.
The
author
agrees
with
the
important
of
this
concept
of
validation
and
the
process
it
creates
called
to
pivoting.
Throughout
the
execution
of
a
Business
Model,
a
company
will
be
confronted
with
indications
of
whether
the
Business
Model
is
failing
or
succeeding.
This
where
the
company
will
have
to
ask
themselves
if
they
want
to
continue
further
or
pivot
back
to
the
Business
Model
and
make
some
adjustment.
The
great
thing
about
the
Business
Model
Canvas
and
Blue
Ocean
Strategy
is
that
is
it
always
possible
to
go
back
to
canvas
and
make
adjustments
after
testing
and
validation.
Business
Environment
It
is
the
author’s
opinion
that
the
company
will
have
to
take
a
deep
analysis
of
a
DEPEST
together
with
a
SWOT
in
order
to
make
sure
that
the
decision
to
be
made
is
relevant
to
future
trends
in
the
market
industry
and
what
the
influencing
factors
might
imply.
Studying
the
business
environment
can
help
a
company
to
anticipate
changes
in
an
industry
ahead
of
time.
This
is
turn
can
help
a
company
to
assess
on
whether
a
business
model
idea
should
be
either
short-‐term
or
long-‐term.
With
this
information
in
mind
a
company
can
realize
when
its
time
to
switch
to
their
long-‐term
strategy.
With
the
case
of
the
facilitating
Bureau,
the
business
environment
did
not
show
much
signs
of
better
days
to
come.
However,
the
Ecological
research
showed
that
because
of
global
warming,
the
Netherlands
will
be
warmer
within
the
next
century.
A
warmer
weather
implies
that
the
demand
for
boats
and
yachts
will
4. Business
Model
Canvas
&
Blue
Ocean
Strategy
4
increase
because
of
shorter
winters
and
longer
summers,
which
would
increase
the
number
of
yacht
building
activity
across
the
Netherlands.
Nonetheless,
this
only
is
not
enough
indication
to
say
that
this
company
can
have
a
long-‐term
business
under
current
and
future
business
environment
conditions.
The
author
together
with
her
group
of
practising
consultants
constructed
a
short-‐term
Business
Model
advice
in
the
form
of
a
business
model
for
the
company.
As
a
result,
the
company
will
need
to
continually
refine
their
business
model
while
executing
the
Business
Model.
Recap
Now
it
is
time
the
recap
what
the
authors
has
stated
in
this
article.
Blue
Ocean
Strategy
and
Business
Model
generation
can
both
be
used
for
the
purpose
of
Business
Model
Generation
and
Business
Model
Innovation.
Both
concepts
are
a
wonderful
complement
to
the
other
because
one
is
more
analytical
and
is
able
to
show
how
on
which
level
the
industry
is
competing,
while
the
other
offers
to
possibility
to
access
each
individual
building
block
of
the
business
as
a
whole
and
to
ensure
the
alignment
of
the
building
blocks.
Both
the
Business
Model
Canvas
and
Blue
Ocean
Strategy
can
be
used
for
startup
and
existing
companies
alike,
the
only
different
is
that
a
start-‐up
company
is
about
generating
a
business
model
while
and
existing
company
is
a
innovation
a
business
model,
product
or
service.
Therefore
this
is
what
distinguishes
with
of
the
two
method
and
approaches
mentioned
in
this
article.
As
in
the
case
of
the
facilitating
bureau,
the
initial
method
and
approach
was
much
different.
The
consultants
where
not
involved
in
the
initial
idea
of
creating
a
facilitating
bureau
for
the
boatyards.
As
a
result,
the
business
idea
that
was
developed
has
proved
to
be
more
of
a
Red
Ocean
and
not
Blue
Ocean.
Nevertheless,
the
author
together
with
her
group
of
consultants
made
great
efforts
to
transform
their
business
idea
into
a
blue
ocean.
The
author
of
this
article
believes
that
a
company
can
be
very
successful
by
using
the
Business
Model
Canvas
and
The
Blue
Ocean
strategy.
Although
this
concept
might
seem
daunting
for
companies
who
do
not
have
any
knowledge
in
this
field,
it
is
absolutely
worth
the
investment,
whether
time
or
money.
For
the
images
that
support
this
Article,
please
turn
to
the
Appendixes.
5. Business
Model
Canvas
&
Blue
Ocean
Strategy
Page 5 of 7
Appendixes
Figure
1
Value
Innovation,
Blue
Ocean
Strategy
(Insead, 2014)
Figure
2
Eliminate-‐Reduce-‐Raise-‐Create
Grid
for
The
Facilitating
Bureau
(DC)
6. Business
Model
Canvas
&
Blue
Ocean
Strategy
6
Appendixes
Figure
3
Strategy
Canvas
of
Facilitating
Bureau
(DCB)
Figure
4Business
Model
Canvas
and
the
Relationship
with
Blue
Ocean
Strategy
(AWAPAWA
MINNTEAM3,
2013)
7. Business
Model
Canvas
&
Blue
Ocean
Strategy
Page 7 of 7
Bibliography
Kim,
W.
C.,
&
Mauborgne,
R.
(2005).
Blue
Ocean
Strategy.
Bosten:
Harvard
Business
School.
Osterwalder,
A.,
&
Pigneur,
Y.
(2010).
Business
Model
Generation.
New
Jersey:
John
Wiley
&
Sons,
Inc.
References
AWAPAWA
MINNTEAM3.
(2013,
November
22).
AWAPAWA
MINN3.
Retrieved
June
17,
2014
from
http://www.awapawa.com/2013/10/blue-‐ocean-‐strategy-‐time-‐
to-‐conquer-‐new-‐markets/
Insead.
(2014,
May
27).
Blues
Ocean
Strategy
Institue.
Retrieved
June
17,
2014
from
http://www.insead.edu/blueoceanstrategyinstitute/home/inde
x.cfm
Figures
Figure
1
Value
Innovation,
Blue
Ocean
Strategy
_________________________________
5
Figure
2
Eliminate-‐Reduce-‐Raise-‐Create
Grid
for
The
Facilitating
Bureau
(DC)
5
Figure
3
Strategy
Canvas
of
Facilitating
Bureau
(DCB)
_________________________
6
Figure
4Business
Model
Canvas
and
the
Relationship
with
Blue
Ocean
Strategy
6