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A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
A Simple Metric for Designing, Evaluating, and Managing Blue Ocean Projects
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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 …

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.
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    • 1. BLUE OCEAN PROJECT MANAGEMENTA Simple Metric for Designing and Managing Blue Ocean Projects  Dr. Rod King
      Value Quotient (VQ) Management
    • 2. COMPANIES THAT ARE SUCCESSFULLY EXECUTING BLUE OCEAN PROJECTS
      Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
    • 3. WHAT IS “BLUE OCEAN”?
      Blue Ocean PLANNING
      Blue Ocean Strategy
      Blue Ocean Mission
      Blue Ocean Plan
      Blue Ocean Project
      Blue Ocean Vision
      Blue Ocean Product (Design)
      Blue Ocean Goal
      Blue Ocean Service (Design)
      Blue Ocean Objective
      Blue Ocean BUSINESS MODEL
      Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
    • 4. BLUE OCEAN MAP: Global View of the Value Quotient
      for Determining Where You and Your Competitors Currently Are & Where You Must Go
      IDEAL VALUE QUOTIENT (BLUE OCEAN)
      Fractal Market Segmentation (Niches) of Short-haul Transportation Market

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

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