BLUE OCEAN PROJECT MANAGEMENTA Simple Metric for Designing and Managing Blue Ocean Projects  Dr. Rod King<br />Value Quoti...
COMPANIES THAT ARE SUCCESSFULLY EXECUTING BLUE OCEAN PROJECTS<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net...
WHAT IS “BLUE OCEAN”?<br />Blue Ocean PLANNING<br />Blue Ocean Strategy<br />Blue Ocean Mission<br />Blue Ocean Plan<br />...
BLUE OCEAN MAP: Global View of the Value Quotient<br />for Determining Where You and Your Competitors Currently Are & Wher...
WHAT IS THE VALUE QUOTIENT?A Universal Metric of Success and Decision-making<br />+<br />-<br />Note<br />Value Quotient <...
BLUE OCEAN RADAR for Southwest Airlines200,000ft View of the Value Quotient<br />Ideal Value Quotient (Blue Ocean Transpor...
STRATEGY RADAR: 40,000ft View of the Value Quotient (Factors)<br />Southwest Airlines<br />4 ELEMENTS OF BUSINESS MODEL:<b...
  Reduce meals to level 2.1
  Increase friendly service to level 8.8</li></ul>Personalization (P)<br /><ul><li>  Reduce seating choice to level 1</li>...
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A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects

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The Value Quotient (VQ) is a simple metric for designing, evaluating, and managing any type of project. This document presents a generic definition of the VQ and shows it at 60,000ft and 40,000ft levels. Southwest Airlines is used as an example and its VQ is calculated.

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  • ExerciseDesign an object (product/service/business model) that is extraordinary, accessible, uncontested, and personalized.
  • Transcript of "A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects"

    1. 1. BLUE OCEAN PROJECT MANAGEMENTA Simple Metric for Designing and Managing Blue Ocean Projects  Dr. Rod King<br />Value Quotient (VQ) Management<br />
    2. 2. COMPANIES THAT ARE SUCCESSFULLY EXECUTING BLUE OCEAN PROJECTS<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    3. 3. WHAT IS “BLUE OCEAN”?<br />Blue Ocean PLANNING<br />Blue Ocean Strategy<br />Blue Ocean Mission<br />Blue Ocean Plan<br />Blue Ocean Project<br />Blue Ocean Vision<br />Blue Ocean Product (Design)<br />Blue Ocean Goal<br />Blue Ocean Service (Design)<br />Blue Ocean Objective<br />Blue Ocean BUSINESS MODEL<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    4. 4. BLUE OCEAN MAP: Global View of the Value Quotient<br />for Determining Where You and Your Competitors Currently Are & Where You Must Go<br />IDEAL VALUE QUOTIENT (BLUE OCEAN) <br />Fractal Market Segmentation (Niches) of Short-haul Transportation Market<br />∞<br /> Highly differentiated and premium-priced/free value chain<br />BLUE OCEAN Southwest Airlines<br />Value Quotient (VQ)<br />Blue Ocean Plan<br />(+):<br />DELIGHT<br />Lowly differentiated and low-cost value chain<br />RED OCEAN * Average (“Me Too”) Airline<br />* Car/Bus Transportation<br />Strategic Choice<br />Red Ocean Plan<br />(-): PAIN <br /> (Uncontested Experience, Market Space, or New Category)<br /> No. of Direct Competitors<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    5. 5. WHAT IS THE VALUE QUOTIENT?A Universal Metric of Success and Decision-making<br />+<br />-<br />Note<br />Value Quotient <br />= Advantage/Disadvantage<br />= Benefit/Cost<br />= Revenue/Cost<br />= Strength/Weakness<br />= Opportunity/Threat<br />= Reward/Risk<br />= Relevant Content/Noise<br />= Positives/Negatives<br />= Delight/Pain<br />= Good/Bad<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    6. 6. BLUE OCEAN RADAR for Southwest Airlines200,000ft View of the Value Quotient<br />Ideal Value Quotient (Blue Ocean Transportation)<br />Object/Core Job: Aircraft/Cars<br />Ideal VQ = ‘Perfect 10’<br />Look within and across industries as well as in nature for similar or analogous resolution of trade-off<br />Southwest (VQ = 3.4)<br />Average Airline (VQ = 5.8/6 = 1.0)<br />Car (VQ = 0.9)<br />(Free)<br />COST<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Reward/Risk = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    7. 7. STRATEGY RADAR: 40,000ft View of the Value Quotient (Factors)<br />Southwest Airlines<br />4 ELEMENTS OF BUSINESS MODEL:<br />Competitive Advantage Strategies<br />Quality (Q)<br /><ul><li> Increase speed to level 9</li></ul>Cost ( C )<br /><ul><li> Reduce ticket price to level 1.3</li></ul>Differentiation (D)<br /><ul><li> Reduce lounges to level 1.2
    8. 8. Reduce meals to level 2.1
    9. 9. Increase friendly service to level 8.8</li></ul>Personalization (P)<br /><ul><li> Reduce seating choice to level 1</li></ul>Value Propositions (Innovative Processes)<br /><ul><li> Higher speed at lower cost
    10. 10. Friendlier service at lower cost</li></ul>Targeted Customer Segments (Niches)<br /><ul><li> Frequent/Low-cost traveler
    11. 11. Early adopter/innovator; Non-customers</li></ul>Value Quotient (VQ)<br /><ul><li> Benefit = Quality + Differentiation + Customization = (9 + 1.2 + 2.1 + 8.8 + 1)/5 = 22.1/5 = 4.42
    12. 12. Cost = 1.3
    13. 13. Value Quotient (VQ) = 4.42/1.3 = 3.4</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    14. 14. BLUE OCEAN STRATEGIC PLAN: Strategic View of the Business<br />INDUSTRY/BUSINESS<br /><ul><li> Industry: Airline/Transportation
    15. 15. Niche: Short-haul, low-cost air travel
    16. 16. Model: Point-to-point air travel with ‘no frills’ to secondary city-airports (cf. hub-and-spokes model with meal)</li></ul>COMPANY BACKGROUND<br /><ul><li> Location: Dallas,Texas (USA)
    17. 17. Founder(s): Herb Kelleher; Rollin King (1967 inc.; first flight in 1971)
    18. 18. Revenue: $11 Billion (2008)
    19. 19. No. of Direct Competitors:</li></ul>PRODUCTS/SERVICES<br /><ul><li> Airline
    20. 20. Aircrafts
    21. 21. Air travel/transportation</li></ul>CUSTOMER VALUE PROPOSITION<br />“The speed of a plane at the price of a car …”<br />Targeted Customer Segment: Frequent/low-cost travelers<br />BLUE OCEAN STRATEGIC PLAN FOR: SOUTHWEST AIRLINES<br />CUSTOMER BENEFITS/EXPERIENCE<br /><ul><li> Faster travel at lower cost
    22. 22. Simple fare structure</li></ul>VISION (“Future Headline”)<br />“Do the right thing.” <br />MAIN GOAL/OBJECTIVE/STRATEGY<br />Blue Ocean Strategic Plan for quickly reaching destination at the lowest price<br /><ul><li> (See Blue Ocean Compass & Blue Ocean Map; Blue Ocean PAD; Value Chain Model; Blue Ocean Dashboard)</li></ul>MISSION/CORE VALUES<br />“Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    23. 23. REFERENCES<br />Chesbrough, H. (2006) Open Business Models. Boston: Harvard Business School (HBS) Press. <br />Christensen, C.; Raynor, M.E. (2003) The Innovator’s Solution. Boston: Harvard Business School (HBS) Press.<br />Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press.<br />King, R. (2009) The Zoomable Page for Innovative Thinking in Space and Time:How Geniuses<br /> and World-class Innovators Really Think … And How Anyone Can Do So in 1 Minute or Less.<br /> Fresno: Value Quotient Management.<br />Dr. Rod King<br /> <br />Speaker, Consultant, and Trainer on Business Model Analysis, Design, and Innovation<br />rodkuhnking@sbcglobal.net & http://businessmodels.ning.com<br />http://twitter.com/RodKuhnKing<br />
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