Six Paths Framework In A Nutshell

The six paths framework was created by Chan Kim and Renee Mauborgne, authors of the bestselling 2005 book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. The six paths framework encourages organizations to identify blue ocean strategies that increase their competitive advantage.

Element	Description
Concept Overview	The Six Paths Framework is a strategic tool developed by W. Chan Kim and Renée Mauborgne. It is part of their Blue Ocean Strategy methodology and helps organizations identify new market opportunities by exploring six different paths or angles to innovation. It encourages thinking beyond existing industry boundaries.
Path 1: Look Across	The “Look Across” path involves examining alternative industries or market segments to find unconventional sources of value. It encourages businesses to consider how other industries or sectors solve similar problems or cater to similar customer needs and adapt those solutions to their own context.
Path 2: Look Beyond	“Look Beyond” focuses on exploring complementary products or services that can be combined with the existing offerings to create new value for customers. It involves looking outside the current product or service scope and identifying adjacent opportunities.
Path 3: Look Backward	The “Look Backward” path involves reexamining previous eras or periods in the industry’s history to identify successful business practices or approaches that have been abandoned or overlooked. By reintroducing and modernizing these elements, organizations can differentiate themselves.
Path 4: Look Forward	“Look Forward” entails anticipating future trends, technologies, or customer needs and proactively shaping the industry landscape to align with those developments. It involves innovating ahead of the curve and positioning the organization as a leader in emerging trends.
Path 5: Look Inward	The “Look Inward” path focuses on identifying underutilized or untapped internal resources, competencies, or assets that can be leveraged to create new value. It encourages businesses to examine their existing capabilities and explore how they can be applied in novel ways.
Path 6: Look Side-to-Side	“Look Side-to-Side” emphasizes learning from successful industry peers or competitors, especially those outside the immediate industry. By studying similar organizations in different contexts, businesses can uncover strategies, practices, or business models that can be adapted and applied to their own advantage.
Implications	The Six Paths Framework has several implications for strategic planning: – Encourages innovative thinking: It prompts organizations to think creatively about new market opportunities. – Challenges industry boundaries: It suggests that competitive advantage can be found beyond traditional industry boundaries. – Emphasizes value creation: It focuses on delivering unique value to customers. – Requires research and analysis: Identifying opportunities in each path involves thorough research and analysis.
Benefits	– Innovation: Stimulates innovative thinking and exploration of untapped markets. – Competitive Advantage: Can lead to the creation of uncontested market spaces. – Value Creation: Emphasizes value creation for customers. – Risk Mitigation: Reduces reliance on existing market conditions. – Adaptability: Encourages organizations to adapt to changing circumstances.
Drawbacks	– Resource Intensive: Exploring all six paths may require significant time and resources. – Uncertainty: Outcomes are uncertain, and success is not guaranteed. – Implementation Challenges: Transforming insights into actionable strategies can be challenging. – Industry Norms: May challenge established industry norms, leading to resistance. – Market Acceptance: New approaches may face acceptance issues in the market.
Use Cases	The Six Paths Framework is valuable in various strategic scenarios: – When an organization seeks to break away from industry competition and create new market spaces. – When industry boundaries are blurry, and opportunities exist in adjacent markets. – When an organization wants to drive innovation by exploring unconventional sources. – When traditional strategies yield diminishing returns, and new avenues for growth are sought.

Understanding the six paths framework

Within every industry, most companies compete on the same basic factors such as features or price. Over time, these companies become more and more similar with each pitted against the others for a slice of the same pie. Markets exemplified by fierce competition and little differentiation are associated with red ocean strategies.

Blue ocean strategies, on the other hand, call upon the company to search out blue, unchartered waters where there are no competitors and thus more profit. These strategies encourage the organization to look beyond its market, industry, and customer base since the insular approach does not tend to favor competitive advantage.

The six paths of a blue ocean strategy

Below is a look at each of the six paths an organization can take to think outside the box:

1 – Look across alternative industries 

Many companies have a narrow view of their environment, believing their products and services exist in a single, static industry. But there also exist alternative industries, or those that sell products and services with the same purpose but with a different function or form.

Consider the probiotic yogurt drink Yakult. The product competes in one industry with other health drinks and juices, but it also competes with the pharmaceutical industry. But since neither would consider Yakult to be their competition, the brand exists in a blue ocean that spans multiple industries.

2 – Look across strategic groups

Strategic groups can be defined as organizations that adopt a similar strategy built on either price or performance. These dimensions can be ranked in hierarchical order, which means a price increase tends to result in a subsequent increase in performance.

Most organizations sell products that are too focused on the middle of the spectrum. By focusing on budget products or premium products, the company may be able to differentiate itself.

3 – Look across buyer groups

The blue ocean strategy is also furthered by determining the chain of buyers in a specific industry and which group the competition focuses on.

In addition to the actual purchasers of a product or service, this chain consists of:

• The users of the product.
• Influencers and regulators, who impact decision-making, and
• Intermediate buyers, or traders.

Instead of marketing to doctors and nurses, for example, Novo Nordisk developed an insulin pen that was marketed to the actual users instead. The pen was easy to use, travel-friendly, and attractively designed to make it more appealing than the traditional bottle and syringe.

4 – Look across complementary product and service offering

In other words, what happens before, during, and after a product or service is used by the customer? By understanding the context of usage, the company can identify additional pain points and develop products for each.

When Philips were developing their range of kettles, they found that the lime in tap water caused scale to deposit inside the vessel. To solve a major pain point that was not related to the kettle itself, they devised a limescale filter that removed impurities as the kettle was filled.

5 – Look across the functional-emotional orientation of an industry

For buyers, emotional appeal refers to the emotional utility of using a product or service. Similarly, functional appeal refers to the functional utility of a product or service based on utility and price.

Businesses who understand that their industry is dominated by one or the other can compete on functional appeal by adding emotion or on emotional appeal by subtracting function.

6 – Look across time

Lastly, the blue ocean strategy encourages businesses to use initiative when monitoring trends. Some companies pace their actions to keep up with the development of a trend instead of determining how it will redefine customer value or impact their business model.

Rather than react passively to trends, Kim and Mauborgne advocate that businesses take an active role in shaping them. To do this, the trend must be decisive (relevant), irreversible, and have a clear trajectory. Businesses that shape trends and take advantage of them tend to be leaders in their industry.

When to Use the Six Paths Framework:

The Six Paths Framework is a valuable tool for various strategic purposes:

1. Strategy Development:

Use the framework during the strategy development process to explore new avenues for value innovation and market creation.

2. Market Analysis:

Apply the framework to analyze your current market and identify opportunities for redefining industry boundaries.

3. Competitive Analysis:

Use the framework to assess the strategic groups within your industry and consider alternative strategic groups to identify potential blue ocean opportunities.

4. Product or Service Development:

When developing new products or services, consider the six paths to ensure that your offerings resonate with customers and stand out in the market.

5. Business Model Innovation:

Explore different dimensions of your business model to create innovative ways to deliver value to customers.

How to Use the Six Paths Framework:

Applying the Six Paths Framework effectively involves a structured approach that explores each of the six paths:

1. Look Across Industries:

Identify industries or sectors that are related to your current business but operate in different ways. Consider how adopting their strategies or practices could lead to value innovation.

2. Explore Across Strategic Groups:

Analyze the strategic groups within your industry and adjacent industries. Identify how you can differentiate your offerings from competitors within and outside your current group.

3. Investigate Across the Chain of Buyers:

Examine the entire chain of buyers associated with your products or services. Identify pain points or unmet needs at various points along the chain and consider how addressing them can create value.

4. Consider Complementary Products and Services:

Identify complementary products or services that customers commonly use alongside your offerings. Explore opportunities to bundle or integrate these elements to enhance overall value.

5. Evaluate Functional or Emotional Appeal:

Assess whether your current value proposition focuses more on functional attributes or emotional appeal. Consider shifting the emphasis to the other dimension to create a differentiated strategy.

6. Explore the Time Factor:

Anticipate future trends, shifts, and customer preferences by examining the evolving landscape of your industry. Identify opportunities to position your offerings strategically in response to changing dynamics.

Drawbacks and Limitations of the Six Paths Framework:

While the Six Paths Framework is a powerful tool for innovation, it has certain drawbacks and limitations:

1. Complexity:

Exploring all six paths can be a complex and resource-intensive process, requiring thorough research and analysis.

2. Ambiguity:

Identifying and assessing opportunities across multiple dimensions may introduce ambiguity and uncertainty into the decision-making process.

3. External Factors:

The framework assumes that organizations have control over market boundaries, but external factors such as regulations and industry norms can limit strategic options.

4. Market Validation:

Effectively implementing a blue ocean strategy requires market validation to ensure that the new value proposition resonates with customers.

5. Not Suitable for All Industries:

The Six Paths Framework may be more applicable to certain industries and market conditions than others.

What to Expect from Using the Six Paths Framework:

Using the Six Paths Framework can lead to several outcomes and benefits:

1. Blue Ocean Opportunities:

The framework helps organizations identify and create blue ocean opportunities by redefining industry boundaries and offering unique value propositions.

2. Competitive Advantage:

By exploring alternative paths to value innovation, organizations can gain a competitive advantage by differentiating themselves from competitors.

3. Market Creation:

The framework enables organizations to tap into previously untapped markets or customer segments, expanding their market presence.

4. Strategic Innovation:

It encourages strategic innovation by challenging conventional thinking and exploring new dimensions of value delivery.

5. Market Growth:

Implementing blue ocean strategies can lead to business growth by attracting new customers and increasing market share.

Complementary Frameworks to Enhance the Six Paths Framework:

The Six Paths Framework can be further enhanced when combined with complementary frameworks and techniques:

1. SWOT Analysis:

A SWOT analysis helps organizations assess their internal strengths and weaknesses, as well as external opportunities and threats, in the context of the six paths.

2. Customer Journey Mapping:

Customer journey mapping helps organizations understand the customer experience at various touchpoints along the chain of buyers.

3. Scenario Planning:

Scenario planning allows organizations to consider various future scenarios and develop strategies to adapt to different outcomes in the evolving time factor.

4. Design Thinking:

Design thinking methodologies can be applied to explore functional and emotional dimensions of value delivery and customer experience.

5. Business Model Canvas:

The Business Model Canvas provides a structured framework for analyzing and designing various components of a business model, aligning with different paths of the Six Paths Framework.

Conclusion:

The Six Paths Framework from “Blue Ocean Strategy” is a powerful tool for creating innovative and differentiated business strategies.

By exploring the six dimensions of value innovation, organizations can redefine industry boundaries, tap into new markets, and gain a competitive edge.

While the framework has some complexities and limitations, its benefits in driving strategic innovation, market creation, and competitive advantage make it a valuable tool for organizations seeking to break away from traditional industry boundaries and seize new opportunities.

When combined with complementary frameworks and techniques, the Six Paths Framework becomes an even more potent force for strategic exploration and innovation, enabling organizations to chart their course toward blue oceans of opportunity.

Case Studies

Smart Home Technology:

• Alternative Industries: Smart home technology companies often consider industries beyond just home automation. For instance, they may explore partnerships with health and wellness companies to create smart devices for elderly care, expanding their market beyond traditional home automation.
• Strategic Groups: Companies can choose to differentiate by offering budget-friendly smart home solutions for cost-conscious consumers or premium, high-end products for luxury markets, rather than competing in the crowded middle market.
• Buyer Groups: By analyzing different buyer groups within the smart home ecosystem, such as homeowners, property managers, or home builders, companies can tailor their products to specific needs and pain points.
• Complementary Products and Services: Smart home providers can expand their offerings to include services like home security monitoring or energy efficiency consulting, addressing additional needs that arise in the context of smart home technology.
• Functional-Emotional Orientation: Companies can differentiate by emphasizing either the functional aspects (e.g., energy savings, security) or the emotional aspects (e.g., comfort, convenience) of their smart home products, based on industry trends and customer preferences.
• Time: Proactive companies shape industry trends by anticipating future needs. For example, a company may invest in researching and developing new technologies that anticipate emerging demands, such as integrating augmented reality (AR) into smart home solutions.

Food Delivery Services:

• Alternative Industries: Food delivery services can explore alternative industries by partnering with grocery stores to offer not only prepared meals but also grocery delivery services, expanding their reach beyond just restaurant deliveries.
• Strategic Groups: Companies can differentiate by focusing on budget-friendly meal options or premium gourmet deliveries, catering to various customer segments and pricing strategies.
• Buyer Groups: Analyzing different buyer groups, such as individual consumers, offices, or event planners, allows companies to tailor their services to meet specific needs and preferences.
• Complementary Products and Services: In addition to meal delivery, companies can offer related services like wine pairings, recipe kits, or cooking classes, providing additional value to customers.
• Functional-Emotional Orientation: Companies can compete based on either the functional aspects (e.g., fast delivery, reliability) or the emotional aspects (e.g., the joy of dining, convenience) of their food delivery services, adapting to industry trends and customer demands.
• Time: Forward-thinking companies shape trends by introducing innovative concepts like eco-friendly packaging, healthy meal options, or contactless delivery methods, setting new industry standards.

Electric Vehicle (EV) Industry:

• Alternative Industries: The EV industry can explore alternative industries by collaborating with energy companies to develop integrated charging and energy storage solutions, expanding their influence beyond just vehicle manufacturing.
• Strategic Groups: Companies can differentiate by offering affordable, entry-level EV models or premium, high-performance EVs, catering to diverse consumer preferences and budgets.
• Buyer Groups: Analyzing different buyer groups, such as individual consumers, fleets, or government agencies, helps companies customize their EV offerings to meet specific usage requirements.
• Complementary Products and Services: EV manufacturers can consider complementary services like charging network expansion, vehicle maintenance packages, or energy management solutions to enhance the overall EV ownership experience.
• Functional-Emotional Orientation: Companies can compete based on the functional aspects (e.g., range, charging speed) or the emotional aspects (e.g., environmental consciousness, sleek design) of their EVs, adapting to industry trends and consumer sentiments.
• Time: Innovative companies shape industry trends by investing in cutting-edge battery technology, autonomous driving features, and sustainable materials, influencing the future direction of the EV market.

Healthcare Industry:

• Alternative Industries: Healthcare organizations can explore alternative industries by collaborating with technology companies to develop telemedicine platforms or wearable health devices, extending their reach beyond traditional healthcare services.
• Strategic Groups: Healthcare providers can differentiate by offering specialized services for specific medical conditions or premium healthcare packages, addressing diverse patient needs and preferences.
• Buyer Groups: Analyzing different buyer groups, such as patients, insurers, or government agencies, enables healthcare providers to tailor their services and payment models to meet specific requirements.
• Complementary Products and Services: Providers can consider complementary offerings like wellness programs, remote monitoring solutions, or personalized treatment plans to enhance patient care and outcomes.
• Functional-Emotional Orientation: Healthcare organizations can compete based on the functional aspects (e.g., treatment effectiveness, cost-efficiency) or the emotional aspects (e.g., patient-centered care, trust) of their services, adapting to industry trends and patient expectations.
• Time: Forward-thinking healthcare organizations shape trends by embracing digital health innovations, adopting predictive analytics for di

Key takeaways:

• The six paths framework encourages organizations to identify blue ocean strategies that increase their competitive advantage. It was created by Chan Kim and Renee Mauborgne of blue ocean strategy fame.
• Blue ocean strategies call upon the company to search out blue, unchartered waters where there are no competitors and thus more profit. This requires bold, non-insular, out-of-the-box thinking.
• The six paths framework consists of six specific actions that may yield a competitive advantage. The business can choose to look across alternative industries, buyer groups, strategic groups, or time. Alternatively, it can look at complementary products and services or their functional and emotional components.

Key Highlights

• Introduction to the Six Paths Framework:
  • Developed by Chan Kim and Renee Mauborgne, authors of “Blue Ocean Strategy.”
  • Aims to help organizations identify blue ocean strategies that enhance their competitive advantage.
• Differentiating Red and Blue Ocean Strategies:
  • Most companies in industries compete on similar factors, leading to intense competition and little differentiation (red ocean strategies).
  • Blue ocean strategies encourage companies to explore uncharted waters with no competition for greater profitability.
  • Blue ocean strategies require looking beyond the current market, industry, and customer base.
• The Six Paths of a Blue Ocean Strategy:
  • Alternative Industries: Consider industries selling products with different functions but similar purposes. (Example: Yakult competing not only with health drinks but also pharmaceuticals.)
  • Strategic Groups: Differentiate by focusing on budget or premium products instead of the middle ground.
  • Buyer Groups: Analyze different stages in the buyer chain (users, influencers, intermediaries) to identify unmet needs.
  • Complementary Products and Services: Develop offerings that address pain points before, during, and after using a product.
  • Functional-Emotional Orientation: Compete by adding emotion to functional products or vice versa, based on industry trends.
  • Time: Shape trends actively rather than passively following them, creating leadership in the industry.
• Key Takeaways:
  • The Six Paths Framework facilitates the discovery of blue ocean strategies for competitive advantage.
  • Blue ocean strategies involve exploring new, uncontested market spaces.
  • The framework includes six paths: alternative industries, strategic groups, buyer groups, complementary products/services, functional-emotional orientation, and time.
  • These paths encourage innovative and out-of-the-box thinking to create unique value propositions and differentiate from competitors.

Related Frameworks/Tools	Description	Key Features
Six Paths Framework	The Six Paths Framework helps businesses identify new market opportunities by exploring six alternative paths to redefine industry boundaries and create uncontested market space. These paths include looking across alternative industries, strategic groups, buyer groups, complementary product and service offerings, functional or emotional appeals, and time.	– Identifies new market opportunities. – Explores alternative paths to redefine industry boundaries. – Helps create uncontested market space. – Includes paths such as alternative industries, strategic groups, buyer groups, complementary products, functional or emotional appeals, and time.
Porter’s Five Forces	Porter’s Five Forces is a framework for analyzing the competitive forces within an industry to assess its attractiveness and profitability. It considers five key forces: rivalry among existing competitors, threat of new entrants, bargaining power of buyers, bargaining power of suppliers, and threat of substitute products or services.	– Analyzes competitive forces within an industry. – Considers rivalry among competitors, threat of new entrants, bargaining power of buyers and suppliers, and threat of substitutes. – Helps assess industry attractiveness and profitability.
SWOT Analysis	SWOT Analysis is a strategic planning tool used to identify Strengths, Weaknesses, Opportunities, and Threats related to a business or project. It involves assessing internal factors (strengths and weaknesses) and external factors (opportunities and threats) to develop strategies and plans that leverage strengths, mitigate weaknesses, capitalize on opportunities, and address threats.	– Identifies Strengths, Weaknesses, Opportunities, and Threats. – Assesses internal and external factors affecting a business or project. – Helps develop strategies and plans based on identified factors.
Value Proposition Canvas	The Value Proposition Canvas is a tool for designing and refining value propositions by understanding customer needs and preferences. It consists of two main components: the Customer Profile, which describes the jobs to be done, pains, and gains of target customers, and the Value Map, which outlines how the product or service alleviates customer pains and creates gains.	– Designs and refines value propositions. – Understands customer needs, pains, and gains. – Consists of Customer Profile and Value Map components. – Aligns product or service features with customer needs and preferences.
Ansoff Matrix	The Ansoff Matrix is a strategic planning tool that helps businesses explore growth strategies by considering combinations of market penetration, market development, product development, and diversification. It provides a framework for assessing the risk and potential impact of different growth options on existing and new products or markets.	– Explores growth strategies: market penetration, development, product development, and diversification. – Assesses risk and potential impact of growth options. – Helps identify opportunities for business expansion and development.
Business Model Canvas	The Business Model Canvas is a visual tool for developing and analyzing business models. It consists of nine building blocks: key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure, and revenue streams. It helps businesses understand how they create, deliver, and capture value.	– Develops and analyzes business models. – Consists of nine building blocks describing key aspects of a business. – Helps understand value creation, delivery, and capture. – Visualizes and communicates business model concepts.
Blue Ocean Strategy Canvas	The Blue Ocean Strategy Canvas is a tool that accompanies the Blue Ocean Strategy framework. It is used to visually represent the current state of an industry or market and compare it with a new, uncontested market space created by implementing Blue Ocean Strategy principles. It helps businesses identify strategic moves to differentiate themselves and create new value.	– Accompanies the Blue Ocean Strategy framework. – Visually represents the current and new market spaces. – Identifies strategic moves to differentiate and create new value. – Helps businesses implement Blue Ocean Strategy principles.

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