The science of making competition irrelevantBlue Ocean Strategy – Part 2Formulation & Implementation
In Our Previous Webinar
Red Ocean Vs. Blue OceanCompete in existing market space Create uncontested / New market spaceSegment existing customers A...
Value InnovationPriceValue/productfeaturesPriceValue/ productfeaturesValue Innovation –Simultaneous pursuitof high value &...
The Four Actions FrameworkCreate ANewValueCurveFactors that the industrytakes for granted and needto be eliminatedFactors ...
The Strategy Canvas ConceptHighMediumLowPriceTime Savings/Faster TravelFlexibility &ReliabilityHassle freeTravelJet Owners...
Strategic Questions before NetJets– How to enter into the Aviation Space when the market was dominated by the big Airline ...
1) Indochino.com does not compete in any of thesegment2) Indochino.com does not get affected by the industryfactors3) Indo...
The Story Of ZyngaZyngaTraditional Gaming CompaniesZynga’s Farm Ville1) Zynga did not compete in any of the segment or mar...
Story Of Khan AcademyKhan AcademyTraditional Education Companies1) Khanacademy filled the gaps existing in traditional bri...
Moving ForwardDiscovering the Principles of BlueOcean Strategy
Principles Of Blue Ocean StrategyFormulation RisksExecution RisksSearch RiskPlanning RiskScale RiskBusiness Model RiskOrga...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
6 Paths Framework• Blue oceans can be created by exploring outside of industry boundaries• Break out of the traditional bo...
6 PATHS: Exploration Outside of Traditional BoundariesPath 6 – Looking across Time value of businessWhat trends have a hig...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
HereCEOsManagersHereStaffOk•A Typical Strategic plan in an organization today is so very red ocean• Because Managers formu...
Four Steps of Visualizing StrategyVisualAwakeningVisualExplorationVisual StrategyFairVisualCommunication• Compare your bus...
The PMS MapToday Tomorrow• Pioneers: Businesses thatprovide unprecedented value• Settlers: Their businessconforms to the b...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
Reach Beyond Existing DemandConventional Strategy of companies needs to be challenged•Retain and guard existingcustomers•C...
The Three Tiers of Non CustomersTier 3 NonCustomersTier 2 NonCustomersTier 1 – NonCustomersNonCustomersTier 3 non customer...
How did Zynga effectively utilized this principle?Tier 1 Non-Customers Tier 2 Non-Customers Tier 3 Non –CustomersAudienceN...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
Sequence ofBlue OceanStrategyWhat are the adoption hurdles inactualizing your business idea? Areyou addressing them upfron...
Buyer Utility MapA buyer’s experience can usually be broken into a cycle of six stages, running from purchase todisposal. ...
Uncovering Blocks to Buyer UtilityUncovering blocks to buyer utility can identify the biggest blocks to buyer experience t...
Testing the Buyer Utility – with Indochino.comIs itProductive for thebuyer?Does the buyer find itsimple?Does the buyer fin...
Exceptional Utility to Strategic Pricing• Step 1: Identify the Price Corridor ofthe Mass.Higher degree of Legal & resource...
Strategic Pricing to Target Costing• Unlike traditional companies theprice must be determined first notthe costs.• The cos...
Overcoming Adoption Hurdles• Perfect business model doesn’t alwaysguarantee success of a blue ocean idea• A new idea threa...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
Overcoming Key Organizational Hurdles• Every change in organization isencounters 4 hurdles viz. Cognitive,Resource, Motiva...
Overcoming Hurdles with Tipping point leadershipRide the “Electric Sewer”(Experience the key challenges yourselves / topma...
Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequen...
Building execution into Strategy• During a Strategy execution that requires offering customers a leap invalue :– People ar...
How fair Process affects People’s Attitudes & behaviors• Fair process of Strategy ensures a managerial road map that build...
Search Risks Planning Risks Scale RisksBusiness ModelRisksReconstructMarketBoundariesFocus on BigPicture – NotNumbersReach...
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Blue ocean strategy part2

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This is the concluding presentation of a two part webinar for Blue ocean strategy.
The presentation introduces the audience to the core principles of Blue Ocean Strategy - which comprise of the six steps viz 1) Reconstructing Market Boundaries 2) Focusing on the Big Picture 3) Reaching Beyond Existing Demand 4) Getting the strategic sequence right 5) Overcoming organizational Challenges 1) Building execution into strategy.
The presentation also focuses on How the Boundaries can be reconstructed with 6 Paths Framework, How one can focus on big Picture by utilizing the visual strategy framework and PMS Maps, How One can reach beyond the existing demand by utilizing the Three tiers of Non Customers framework, How one can get their strategic sequence right by utilizing the buyer utility map, Price corridor of masses and overcoming organization hurdles framework.
The presentation also details on how to overcome the organizational hurdles and ways of building execution into strategy.

This presentation is aimed at explaining the greatness of Blue ocean strategy thinking to general audience through simple means and examples and does not imply distortion of facts and frameworks of the original Authors: Chan Kim, Renee Mauborgne

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Blue ocean strategy part2

  1. 1. The science of making competition irrelevantBlue Ocean Strategy – Part 2Formulation & Implementation
  2. 2. In Our Previous Webinar
  3. 3. Red Ocean Vs. Blue OceanCompete in existing market space Create uncontested / New market spaceSegment existing customers Attract noncustomersBeat the competition Make the competition irrelevantBlue Ocean StrategyRed Ocean StrategyCompetitive Advantage Value InnovationExploit existing demand Create and capture new demandCreate a value – cost trade off Break the value-cost trade off
  4. 4. Value InnovationPriceValue/productfeaturesPriceValue/ productfeaturesValue Innovation –Simultaneous pursuitof high value & Low costTraditional Companies Blue Ocean CompaniesEliminateReduceRaiseCreateDIVERGENCE: The shape of thevalue curve diverges from thoseof other players.Compelling Tag line : The valuecurve can be translated into aclear, strong, truthful andcompelling TAGLINE.FOCUS: Not to diffuse effortsacross all key factors ofcompetition.Characteristics of a good Value innovation Strategy
  5. 5. The Four Actions FrameworkCreate ANewValueCurveFactors that the industrytakes for granted and needto be eliminatedFactors that the industryhas never createdFactors that should be wellbelow the industryStandardFactors that should beraised above the industrystandardREDUCEELIMINATE CREATERAISE
  6. 6. The Strategy Canvas ConceptHighMediumLowPriceTime Savings/Faster TravelFlexibility &ReliabilityHassle freeTravelJet Ownership In Flight ServiceDead headCostsNETJETSBusiness / 1stClass TravelCommercialAirline IndustryNETJETS Commercial AirlineIndustryBusiness / 1stClass TravelAttributes of Industry & CompetitorsRelevanceScale• The strategy canvas is the central diagnostic and action framework for building a compelling blueocean strategy.• The Strategy canvas serves two purposes:– It captures the current state of play in the known market space. This allows you to know where youare viz competition– It propels you to action by reorienting your focus:• From competitors to alternatives• From customers to non customers of the industry.
  7. 7. Strategic Questions before NetJets– How to enter into the Aviation Space when the market was dominated by the big Airline groups? -1983The Blue Ocean• Identified that Business Travelers are the most frequent and regular flyers• NETJETS offered Business Travelers “ The convenience of a private Jet at the price of a Airline Ticket”• NETJETS also provided fractional 1/16 ownership of the aircraft – With no hassles Aircraft Maintenance• Private Aircraft made available to corporate at 4 hours notice ( much less than flight booking)• No Hassles or responsibilities of Aircraft Maintenance• Customized in flight services – Only for the travelerThe Red Ocean•Over 20 domestic And international Airlines competing in the space•All of them attracted Business Travelers, Holiday travelers and Casual Travelers•Corporates spent millions on executive travel every year•All travelers had to go through the long check ins, security checks, hectic flight transfers, congested airports,Baggage claims ….•Business Travelers only have the option of Business Class/ First class or corporate JetCreated a B2B industry when the entire industry was still B2C
  8. 8. 1) Indochino.com does not compete in any of thesegment2) Indochino.com does not get affected by the industryfactors3) Indochino.com built its brand reputation by deliveringValue4) Indochino.com outsources all suits to quality andreputed local and tailor network of ShanghaiCreated and Captured a new MarketDemand by focusing on Buyer Utility• Industry divided into five segmentsHaute Couture, Luxury, Affordable Luxury, Mainstream& Discount• The Traditional companies competed among each otheron the factor like : No of stores, Location of stores –Premium stores , Premium brand, Range or no of Linesoffered, Hi Fashion Vs customization Vs price Tradeoff• Marketing & Brand reputation( Top brands associated with Designer Labels)•High Customization costsIndochino.comTraditional Apparel / Suit CompaniesThe Story Of Indochino.com• World’s first Self Service Virtual Suit company• Customers can choose the fabric, design style and accessories - Online• Buttons, Lapels, linings, pockets, cuff signature – everything is customizable• Customers measure themselves and provide fitting details online with video tutorial• Delivery within 3 weeks (• If order is less than perfect, Indochino pays for local tailoring or remake sthe suit for free• Most suits priced under $500 ( Whereas cheap suits cost around $200 and the designer ones around $1500)
  9. 9. The Story Of ZyngaZyngaTraditional Gaming CompaniesZynga’s Farm Ville1) Zynga did not compete in any of the segment or marketplayer dominance2) Zynga’s (Farm Ville) did not get affected by the industryfactors3) Zynga built its brand reputation by sharing and word ofmouth connect4) Zynga caterered to all – children, parents, professionals …5) Zynga created a new genre of education / simulation gamesCreated and captured a new market demand byfocusing on Non Customers1) Industry divided into four segments• Console based games, Online Games, Mobile Games &Flash Games2) Console based games dominated the marketplace with 75%of the revenues.3) The big three of the gaming dominated 95% of the consolemarketplace (sony, Nintendo, Xbox ..)4) The Traditional gaming companies competed among eachother on the following factors:Consoles – Type speed, capabilities, No of titles in each genre, Speedof Title Release – weekly, monthly, Hi end real time graphics, Hi endaccessories5) Catered only to gamers – Teenage boys to professionalgamers6) Addictive and had lot of side effects – Too much violence,addiction, Lack of exercise, not mind stimulating7) Parents usually did not recommend / buy•Founded Zynga in April 2007 with a mission “Connect the world through games”•Has over 3000 Employees and 270 million customers, 60 mn daily active users•Largest Social games developer of Facebook•Now provides games in multiple platforms like:•Facebook, Myspace, Android, ipad, iphone, yahoo & Farmville.com
  10. 10. Story Of Khan AcademyKhan AcademyTraditional Education Companies1) Khanacademy filled the gaps existing in traditional brick& mortar school learning• Videos & Exercises to be used as a teaching aid and notreplacement for teacher• Use analytics and technology to figure out the Strengths& weakness of students2) Learning is centered around students, teachers and parents3) Everybody gets equal opportunity / attention/ Learning4) Unique Pedagogy -• Stop, rewind, understand and then play5) Analytics drive the understanding of each students strengths& WeaknessCreated and captured a new market demand by focusing onfunctionality & emotional appeal1) Industry divided into 2 segments• Brick & mortar Learning – Schools/ Colleges• Online learning2) Learning was centered around students3) The factors the industry was competing on:• Student teacher ratio• Class room Interaction• Cost of learning / Education• Interactive Learning4) Smart kids get more attention than other kids5) Focused pedagogy – Teacher talks – Students listen –Therefore Students learn6) Teachers Judge student’s strength / weakness•A non-profiteducational organization created in 2006 by Salman Khan- A MIT & Harvard Business School Alumni•Free online collection of more than 3,300 micro lectures•Most viewed online courses and lectures in the world – Over 172 million total views.• Over 177 million lessons delivered till date• Close to quarter billion dollars in donation• Team size of just 20 people• Amongst the 100 most influential people of the world
  11. 11. Moving ForwardDiscovering the Principles of BlueOcean Strategy
  12. 12. Principles Of Blue Ocean StrategyFormulation RisksExecution RisksSearch RiskPlanning RiskScale RiskBusiness Model RiskOrganizational RiskManagement RiskCore/Formulation PrinciplesReconstruct market boundariesReach beyond existing demandGet the strategic sequence rightExecution PrinciplesFocus on the big picture, not the numbersOvercome key organizational hurdlesBuild execution into strategyThe formulation principles and execution Principles, work in tandem to minimize risks and maximizingopportunities.
  13. 13. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  14. 14. 6 Paths Framework• Blue oceans can be created by exploring outside of industry boundaries• Break out of the traditional boundaries of the industry to unlock value• “out of the boundaries” thinking framework for unlocking valueCompetitors in IndustryCreatingvalue acrossFrom competingwithinConventional boundaries in acompetitive marketplaceBlueoceanStrategyBetter serving existing BuyerGroupsMaximizing value withexisting ProductMore functions more price /premiumAdapting to trends & TimevalueCompetitive Position amongStrategic GroupsLook across AlternativeIndustriesLooks across strategic groupsRedefines Buyer GroupsLooks at Complementaryproduct / service offeringsRethinks FunctionalOrientation of IndustryShapes External trends overtime
  15. 15. 6 PATHS: Exploration Outside of Traditional BoundariesPath 6 – Looking across Time value of businessWhat trends have a high probability of impacting your industry, areirreversible, and evolving in a clear trajectory? How will these trendsimpact your industry? Given this, how can you open up unprecedentedcustomer utility?Apple Music, Cisco Systems, CNN,HBO’s “Sex and the City”Path 1 - Looking across Alternate IndustryWhat are the alternative industries to your industry?Why do buyers trade across to them?NTT DoCoMo, Federal Express, Southwest Airlines, NetJetsPath 2 – looking across Strategic GroupsWhat are the strategic groups in your industry?Why do buyers trade up for the higher group, and why dothey trade down for the lower one?Polo Ralph Lauren, Curves, Sony Walkman, Toyota LexusPath 3 - Looking across chain of buyersWhat is the chain of buyers in your industry?Which buyer group does your industry typically focus on?If you shifted the buyer group of your industry,how can you unlock new value?Novo Nordisk, Bloomberg Terminals, Canon Copiers, Philips AltoPath 4 – looking across complementary product / service offeringWhat is the context in which your product or service is used? Whathappens before, during, and after? Can you identify the pain points?How can you eliminate these pain points through a complementaryproduct or service offering?Barnes & Noble, Dyson Vacuum Cleaners, Kinépolis Kiné-kids, ZenickSalick’s Cancer CentersPath 5 – Looking across Functional-emotional appeal to buyersDoes your industry focus on functionality or emotional appeal? If youcompete on emotional appeal, what elements can you strip out to make itfunctional? If you compete on functionality, what elements can be addedto make it more emotional?Starbucks, QB House, Direct Line Group, Pfizer’s Viagra
  16. 16. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  17. 17. HereCEOsManagersHereStaffOk•A Typical Strategic plan in an organization today is so very red ocean• Because Managers formulate the strategy based on current industry, current customers and currentchallenges.• Managers spend majority of their time thinking about profitability, projections, market shares,segments and revenues based on current industry facts / assumptions.• Managers are pulled in all directions by their superiors based on limited information & perceptions•By building a company’s strategic planning process around a strategy canvas, the company canfocus their main attention on the big picture rather than getting immersed in numbers andjargons.
  18. 18. Four Steps of Visualizing StrategyVisualAwakeningVisualExplorationVisual StrategyFairVisualCommunication• Compare your businesswith your competitor’s bydrawing your “as is”strategy canvas.• See where your strategyneeds to change.• Go into the field toexplore the six paths tocreating blue oceans.• Observe the distinctiveadvantages of alternativeproducts and services.• See which factors youshould Eliminate, Raise,Create, or Change.•DO NOT USE MARKETRESEARCH• Draw your ‘to be”strategy canvas based oninsights from fieldobservations.• Get feedback onalternative strategycanvases from customers,competitors customer,and non-customers.• Use feedback to buildthe best “to be” futurestrategy.• Distribute your before-and-after strategic profileson one page for easycomparison.• Support only thoseprojects and operationalmoves that allow yourcompany to close the gapsto actualize the newstrategy.EXPLANATIONEXPECTATION : CLARITYThe four steps that pushes a company’s strategy canvas to blue oceans• This approach mitigates planning risks by investing time & effort to develop a compelling strategy canvasthat is Focused, Divergent & that has a compelling tagline.• Compares the current business attributes with your competitors’ by drawing your “as is” strategy canvas,and then evaluating where the strategy needs to change.
  19. 19. The PMS MapToday Tomorrow• Pioneers: Businesses thatprovide unprecedented value• Settlers: Their businessconforms to the basic valuecurve of the industry or me tooindustry• Migrators: Improved value butnot innovative idea• Visualizing strategy helps managers to predict and plan company’s future• This framework can be used to help a company align its internal product portfolios• Clearly, what companies should be doing is shifting the balance of their future portfolio towardpioneer• If current portfolio and the planned offerings consist mainly of settlers then the company has lowgrowth trajectoryPioneersMigratorSettlers
  20. 20. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  21. 21. Reach Beyond Existing DemandConventional Strategy of companies needs to be challenged•Retain and guard existingcustomers•Compete for competitor businessFocus on ExistingCustomers•Create a niche by looking at finercustomer preferences•Dominate with competitiveadvantage in segmentsDrive for finerSegmentationCreates enhancedcompetiveness amongplayers – leading to highercost of customeracquisitionCreates smallmarketplaces that mightnot be scalable andprofitable in long runConventional Companies
  22. 22. The Three Tiers of Non CustomersTier 3 NonCustomersTier 2 NonCustomersTier 1 – NonCustomersNonCustomersTier 3 non customers: “unexplored” non customers who are in marketsdistant from yours.Tier 2 non customers: refusing noncustomers who consciously choose against your marketTier 1 non customers : “soon-to-be” noncustomers who are on the edge ofyour market, waiting to jump shipManaging the three tiers of Non customersTier 1 Non Customers :Investigate DissatisfactionKey commonalities across needs & desirese.g. PRET A MANGER- British fast food chainTier 2 Non Customers:Eliminate access barriersEconomic, Functional, Education, Geographicale.g. JCDecaux – street FurnitureTier 3 Non Customers:Remove long held assumption on customer needs & behaviore.g. US Airforce Joint Strike Fighter and ZyngaGo for the Bigger Catchment
  23. 23. How did Zynga effectively utilized this principle?Tier 1 Non-Customers Tier 2 Non-Customers Tier 3 Non –CustomersAudienceNon Regular players – youngboys & girls bored out oftraditional gamesCasual Players - workingmen/ women not enoughtime to playNon Player Parents- women/housewivesChange 1 Changed genres completely –from shooting, arcade, racing,to simulationCost of acquisition – free Removed violenceChange 2 Made social networking funand more excitingEliminated hassles of consoles,game titles, accessories,hardware & setupsPlay with friends and family –not necessarily together / realtimeResults Fun lasts longer, with reducedtime and effortNon serious casual play to relax/ unwindNo winner – no loser• Zynga looked across non customers and attracted new buyer groups tocreate an industry that did not exist earlier
  24. 24. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  25. 25. Sequence ofBlue OceanStrategyWhat are the adoption hurdles inactualizing your business idea? Areyou addressing them upfront?AdoptionYes NoCan you attain your cost target toprofit at your Strategic price?CostYes NoIs your price easily accessible to themass of buyers?PriceYes NoIs there exceptional buyer utility inyour Business idea?Buyer UtilityYes NoCommerciallyViable BlueOcean StrategyIs there a compellingreason for the mass tobuy?Is your strategic priceattractive enough toattract customers?Can your costs besignificantly lowerthan the currentIndustry price?Are there anyadoption hurdles?What are theresistance points?We will explore the Sequence and the formulation in ourNext webinar using the tools we have explored todayRevenueCostsHurdles
  26. 26. Buyer Utility MapA buyer’s experience can usually be broken into a cycle of six stages, running from purchase todisposal. Each stage encompasses a wide variety of specific experiences. At each stage, managersneed to ask a set of questions to gauge the quality of buyer’s experience.•How long does ittake to find theproduct you need?•Is the place ofpurchaseattractive andaccessible?•How secure is thetransactionenvironment?•How rapidly canyou make apurchase?•How long does ittake to get theproductdelivered?•How difficult is itto unpack andinstall the newproduct?•Do buyers haveto arrangedeliverythemselves?•Does theproduct requiretraining orassistance?•Is the producteasy to storewhen not in use?•How effectiveare the product’sfeatures andfunctions?•Does theproduct orservice deliver farmore power oroptions thanrequired by theaverage user? Isin overchargedwith bells andwhistles?•Do you needother productsand services tomake this productwork?•If so, how costlyare they?•How much timedo they take?•How easy arethey to obtain?•Does theproduct requireexternalmaintenance?•How easy is it tomaintain andupgrade theproduct?•How costly ismaintenance?•Does use of theproduct createwaste items?•How easy is it todispose of theproduct?•Are there legalor environmentalissues indisposing of theproduct safely?•How costly isdisposal?Purchase Delivery Use Supplements Maintenance Disposal
  27. 27. Uncovering Blocks to Buyer UtilityUncovering blocks to buyer utility can identify the biggest blocks to buyer experience that stand in theway of converting noncustomers into customers.Customer Productivity: In which stage are the biggest blocks to customer productivity?Simplicity: In which stages are the biggest blocks to simplicity?Convenience: In which stage are the biggest blocks to convenience?Risk: In which stage are the biggest blocks to reducing risks?Fun and Image: In which stage are the biggest blocks to fun and image?EnvironmentalFriendliness:In which stage are the biggest blocks to environmental friendliness?
  28. 28. Testing the Buyer Utility – with Indochino.comIs itProductive for thebuyer?Does the buyer find itsimple?Does the buyer find itConvenient?Does it reduce buyersRiskBuying ExperienceUtilityLeaversPurchase Delivery Supplements Maintenance• Buyer Utility Score Blocks– Lower than what is prevalent in the current industry• Therefore Indochino.com raised the Buyer Utility and ExperienceUse DisposalDoes it have a funimage association?Does it haveenvironment friendlyIndochino.comTraditional Suit industry
  29. 29. Exceptional Utility to Strategic Pricing• Step 1: Identify the Price Corridor ofthe Mass.Higher degree of Legal & resourceprotectionDifficult to imitateSome degree of legal & resourceprotectionLow degree of legal & resourceProtectionPrice Corridorof MassesSameFormDifferent Form –Same FunctionDifferent Form &Function – SameobjectiveMid Level pricingFord Model TThree Alternate product / service Types• Step 2: Specify the price level withinthe price corridorI phoneViagraAir AsiLycraSAP• Blue oceans approach to price is not Cost + profit• Infact it is Strategic Price – Target Cost
  30. 30. Strategic Pricing to Target Costing• Unlike traditional companies theprice must be determined first notthe costs.• The costs is determined based on thetarget profit intended• Cost is approached as a target forreduction• Target Costs Can be achievedthrough:– Streamlining Operations• Outsourcing, digitizing, cloud,• E.g. Apple– Partnering• Leverage low cost capabilities and reach ofother companies• E.g. SAP who partnered with Oracle, CapeGemeni , Accenture etcStrategic PriceTargetProfitTarget CostStreamlining &Cost InnovationsPartneringPrice InnovationsPrice ≠ Cost + profit
  31. 31. Overcoming Adoption Hurdles• Perfect business model doesn’t alwaysguarantee success of a blue ocean idea• A new idea threatens the position ofthe company, which can provoke fearamong the three main stakeholders:employees, business partners, and thepublic• Before moving on with a new idea, thecompany should communicate theplan effectively to all stake holders• Use Blue Ocean Idea Index to test thesystemEmployeesBusinessPartnersGeneralPublic•Failure to address the concerns of employeescan be very expensive•Make an effort to explain the new idea, Workout the problems so everyone wins•Possibly more important thanemployees•Resolve by openly discussing theproblem•Stakeholders need to be confident and knowthat there will be no surprises•Do not let others take charge of your owndebate
  32. 32. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  33. 33. Overcoming Key Organizational Hurdles• Every change in organization isencounters 4 hurdles viz. Cognitive,Resource, Motivational & Political• Conventional wisdom asserts thatthe greater the change, the greaterthe resources and time you willneed to bring about results.Leveraging tipping point leadership toalign all with the new strategy.• Transforming the extremes will transformthe masses.• Focus on acts of disproportionateinfluence.– People, Acts and ActivitiesCognitive HurdleAn Organization Weddedwith Status QuoPolitical HurdlesOpposition from PowerfulVested InterestsMotivationalHurdlesUnmotivated StaffResource HurdlesLimited resources
  34. 34. Overcoming Hurdles with Tipping point leadershipRide the “Electric Sewer”(Experience the key challenges yourselves / topmanagement, before framing the problem)Meet with Disgruntled Customers(Ensure you understand the experience of others)Zoom in on Kingpins (key influencers)Identify the Natural Leaders, Skilled andpersuasivePlace kingpins on a fishbowl(Highlight actions and responsibilities of kingpinsin a transparent & fair process)Atomize to get the organization to change itself(Breaking up of objectives, by function and role sothat nobody can say it’s a difficult task)Redistribute resources to your hot spots(Identify the impactful areas where moreresources are required but not adequate)Redirect resources from your cold spots(Identify the non Impactful areas where resourcescan be freed)Engage in horse trading(Trade resources from others for symbioticWho are my devils? Who will fight me? Who willlose the mostWho are my angels? Who will naturally align withme? Who will gain the most by the strategic shift?Cognitive Hurdles Motivational HurdlesResource Hurdles Political Hurdles
  35. 35. Reconstructing Market BoundariesFocus on Big Picture – Not NumbersReach Beyond Existing DemandGetting The Strategic Sequence RightOvercoming Organizational ChallengesBuilding Execution Into Strategy
  36. 36. Building execution into Strategy• During a Strategy execution that requires offering customers a leap invalue :– People are required to step out of their comfort zones and change the way they haveperformed previously– People can resent having a strategy thrust upon them– Poor process can ruin Strategy, leading to distrust, non-cooperation and even sabotage.Expectation ClarityExplanationEngagementThe Three Principles of Fair process• Involving Individuals in strategic decisions that affect them.• Asking for their inputs and allowing to refute the merits anddemerits of ideas• Nullifying the assumptions that anyone may have•Involves explaining as to why the strategic decisions are made asthey are• What is the core thinking that underlies the strategy•What are the new rules of the game and therefore the newresponsibilities• What are the expectations and standards that each will bejudged upon
  37. 37. How fair Process affects People’s Attitudes & behaviors• Fair process of Strategy ensures a managerial road map that buildsproductivity while executing a strategyFair ProcessEngagementExplanationExpectation ClarityTrust & Commitment“ I feel My Opinion Counts”Voluntary Cooperation“ I will go beyond the call ofDuty”Exceeds ExpectationsSelf InitiatedStrategyFormulationProcessAttitudesBehaviorStrategyExecutionIntellectual &Emotional RecognitionTrust & CommitmentVoluntary cooperationin execution Strategy
  38. 38. Search Risks Planning Risks Scale RisksBusiness ModelRisksReconstructMarketBoundariesFocus on BigPicture – NotNumbersReach BeyondExistingDemandGetting thestrategicSequenceRight6 Paths ApproachStrategicPlanningMarket SizingBusinessModelStrategy Formulation Strategy ExecutionOrganizationalRisksOvercomingOrganizational hurdlesMobilizationManagementRisksBuildingExecutioninto StrategyManagementRisksPlan beyondincrementalimprovements usinga visualizationapproach•Visual Awakening• Visual Exploitation• Strategy Fair• VisualCommunication•Use PMS map toidentify current &future orientation ofbusiness•AlternativeIndustries•Strategic groups•Buyer Groups•ComplementaryProduct offerings•FunctionalEmotionalOrientation•Time•ChallengeConventionalpractices•Consolidatedemand byfocusing on NonCustomers• Three tiers ofNon Customers•Sequence thebusiness Model tocapture newlycreated value•Buyer UtilityMapping•Pricing & corridorsof Masses• Cost Targetsbased on marginsdesired• PotentialAdoption obstaclesTipping Pointleadership toTackle• Cognitive hurdles•Resource Hurdles•MotivationalHurdles• Political HurdlesExecutionthrough:Engagement•Explanation•Clarity ofexpectationsBOS Principles Summary
  39. 39. Thank you
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