Blue Ocean Planning & Execution: 8 Tools for ReDesigning Business Models & Making Better Decisions
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Blue Ocean Planning & Execution: 8 Tools for ReDesigning Business Models & Making Better Decisions

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The document on Blue Ocean Planning & Execution contains 8 tools for redesigning existing business models and making better decisions. Internal obstacles to realising highly successful ("blue......

The document on Blue Ocean Planning & Execution contains 8 tools for redesigning existing business models and making better decisions. Internal obstacles to realising highly successful ("blue ocean") models include poor business decisions, uninspiring business goals & targets, and Red Ocean ("Me Too") strategies and models. The presented tools will help you to systematically eliminate these obstacles. The tools can be used to visually redesign existing business models and value chains as well as facilitate decision making. Also, the tools can be used to simply visualize and model the (Blue Ocean) Strategy of a business.

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  • The most successful businesses and individuals have the highest Value Quotient (in a sea that has no direct competitors).

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  • 1. BLUE OCEAN PLANNING & EXECUTION8 Tools for Redesigning Business Models & Making Better Decisions  Dr. Rod Kingrodkuhnking@sbcglobal.net & http://businessmodels.ning.comhttp://twitter.com/RodKuhnKing
  • 2. WHY REDESIGN EXISTING BUSINESS MODELS?”Greater Competition, Digitalization, and Globalization are Creating Bloody ‘Red Oceans’ for Businesses”
    • To Exponentially Increase Business Growth and Profitability
    • 3. To Exponentially Increase the Value Quotient for Core, Peripheral, and Remote Customers As Well As Non-customers
    • 4. To Swim Out of the ‘Red Ocean’ and Make the Competition Irrelevant
    • 5. To Significantly Deliver More Value for Customers’ Jobs
    • 6. To Facilitate Mergers and Acquisitions
    • 7. To Respond to Competitive Pressures Including Commoditization
    • 8. To Take Advantage of Emerging Opportunities and Technology
    • 9. To Capture Greater Value (Profit) in the Value Chain and Network
    • 10. To Provide a More Sustainable and Defensible Competitive Advantage
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 11. HIGHLY SUCCESSFUL REDESIGNS OF CONVENTIONAL BUSINESS MODELSBusinesses With High Value Quotient (VQ)
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 12. WHAT IS THE VALUE QUOTIENT?A Universal Metric of Success and Zoomable Decision-making
    Ideal VQ Strategy
    Everyone to continuously maximize benefit while minimizing cost throughout the value chain
    +
    -
    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
  • 13. CUSTOMER JOBS COMPASS: What Jobs Must You Facilitate or Do In a Hierarchy of Customer Needs or ‘Jobs’?
    Google Search
    ELEMENTS OF LONG TERM-BUSINESS MODEL:
    Long-term Competitive Advantage Scenarios
    • Increase performance of/develop/acquire software applications that customers hireto do ‘Physical Jobs’
    • 14. Increase performance of/develop/acquire software applications that customers hire to do ‘Emotional/Social Jobs’
    • 15. Increase performance of/develop/acquire software applications that customers hire to do ‘Intellectual Jobs’
    • 16. (Increase performance of/develop/acquire software applications that customers hire to do ‘Spiritual Jobs’???)
    Long-term Value Proposition
    • ‘Total Happiness’ For All Customer Jobs on the Internet
    Targeted Customer Segments (Niches)
    • ‘Short and Long Tail’ of Users on the Internet
    Existing Impact of Google Search on Total Jobs
    • Average Impact of Google on Total Jobs =
    (6 + 2 + 5.5 + 2)/4 = 4.3
    Impact of Ideal Software on Total Jobs
    Impact of Ideal Software on Total Jobs =
    ‘Perfect 10’
    (for Developing Tools to Make Customers Happier As Well As for Determining What ‘Jobs’ or Niche(s) of Total Happiness to Focus on)
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 17. 8 Tools for Redesigning Business Models & Making Better Decisions
    BLUE OCEAN RADAR: 200,000ft
    • Illustration of Ideal Business Result
    • 18. Illustration of “Cost vs. Benefit” Trade-offs (Contradictions) & Trends
    • 19. Basic Elements of Value Quotient
    BLUE OCEAN MAP: Global View
    • Illustration of Current and Desired Positions of You & Your Competitors
    • 20. Illustration of IVQ and Market Seg-ments Including Red and Blue Oceans
    BOND: 100,000ft
    Ways to Reduce Obstacles to Goal:
    • Facilitation of Decision-making
    • 21. Visualization of Strategy
    • 22. Modeling and Testing of Strategy
    BLUE OCEAN COMPASS: 60,000ft
    • Visualization of Shape as well as Trends of Competing, Desired, and Ideal Business Results (Models)
    TOOLS FOR REDESIGNING BUSINESS MODELS & MAKING BETTER DECSIONS
    STRATEGY RADAR: 40,000ft
    • Illustration of Detailed Shape of Competing, Desired, and Ideal Business Results (Models)
    • 23. Design of Value Proposition
    IDEAL VALUE CHAIN: Tactical View
    • Visualization of Ideal Value Chain (Business Model) for IVQ Strategy
    • 24. Flows of Information (Cost and Revenue) & Resources Within a Value Chain or Business Model
    BLUE OCEAN STRATEGIC PLAN
    • Elements and Resources for Pursuing Goal of Ideal Value Quotient (Blue Ocean), Achieving Blue Ocean Plan, and Totally Engaging Employees and Other Stakeholders
    WHEEL OF OBSTACLES
    • Illustration of Internal Obstacles and Constraints to Achieving the Ideal Value Quotient for the Value Chain or Business Model
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 25. 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 Search Engine Market

    Highly differentiated and premium-priced/free value chain
    BLUE OCEAN Google Search
    Value Quotient (VQ)
    Blue Ocean Plan
    (+):
    DELIGHT
    Lowly differentiated and low-cost value chain
    RED OCEAN * “Me Too” Search Engine
    Strategic Choice
    Red Ocean Plan
    (-): PAIN
    (Uncontested Experience, Market Space, or New Category)
    No. of Competitors
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 26. BLUE OCEAN RADAR: 200,000ft View of the Value Quotientfor Comparing, Evaluating, and Redesigning Business Models As Well As Products and Services
    Ideal Value Quotient(Blue Ocean)
    Object/Core Job: ………………………………..…….
    (cf. Goal of IVQ to Moore’s Law & “Singularity”)
    Desired VQ = 8/2= 4
    Existing VQ = 2/6= 0.33 < 1
    (Free)
    COST
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 27. Moore’s Law As A Special Case of Law of Increasing Value Quotient “The number of transistors on an integrated circuit roughly doubles every two years”
    Ideal Value Quotient (Blue Ocean or “Singularity”)
    Object/Core Job: Integrated Circuit Board
    (cf. Goal of IVQ to Moore’s Law & “Singularity”)
    VQ = 8/1= 8
    VQ = 4/1= 4
    VQ = 2/1= 2
    (Free)
    COST
    (Size)
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 28. Using the Blue Ocean Radar to Illustrate Trends in the Evolution of Technology “The Ideal Object Uses Its Internal and “Free” Resources to Instantly Do Its Job at No Cost and Without Any Negative Effect”
    Ideal Value Quotient (INTERNET or “Singularity”)
    Object/Core Job: Computer/Storage Devices
    IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off
    Desktop Computer
    Mini-computer
    Laptop Computer
    Palmtop Computer
    Old Mainframe Computer
    (Free)
    COST
    (Size)
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 29. Using the Blue Ocean Radar to Illustrate Trends in the Evolution of Technology “The Ideal Object Uses Its Internal and “Free” Resources to Instantly Do Its Job at No Cost and Without Any Negative Effect”
    Ideal Value Quotient (LIGHT or Blue Ocean)
    Object/Core Job: Vehicles
    IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off
    Rocket
    Aircraft
    Train
    Car
    Bicycle
    Ship
    (Free)
    COST
    (Size)
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 30. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”
    Ideal Value Quotient (Blue Ocean or “Infinite Genius”)
    Object/Core Job: Linear Page
    IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off
    Existing Paradigm (VQ = 6/8 = 0.75)
    Breakthrough Paradigm VQ = 8/2 = 4
    (Free)
    COST
    (Processing Time)
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 31. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”
    Ideal Value Quotient (Blue Ocean or “Singularity”)
    Object/Core Job: Vehicles
    IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off
    Conventional Thinking VQ = 8/7= 1.1
    Optimum VQ = 8/4= 2
    Existing VQ = 6/4= 1.5
    (Free)
    COST
    Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =
    Revenue to Cost Ratio = 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
  • 32. Blue Ocean Network Diagram (BOND)for Quickly Making Better Decisions, Goals, and Strategies in Business (Projects)
    “Exponentially increase the business’s Value Quotient (= Benefit/Cost)”
    BENEFIT
    Quality
    24x7 Personalization/ Customization
    CUSTOMERS (Sales/Revenue)
    COST (Price)
    Differentiation (Simplicity/Brand/ Novelty)
    Business Action …
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 33. Blue Ocean Network Diagram (BOND)for Visualizing Blue Ocean Goals & Strategy: Case of Google Search
    “Exponentially increase the business’s Value Quotient (= Benefit/Cost)”
    BENEFIT
    Quality (Speed):
    INCREASE
    24x7 Personalization: INCREASE
    CUSTOMERS (Sales/Revenue)
    COST (Price): REDUCE
    Differentiation (Simplicity/Brand): INCREASE
    Business Action …
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 34. Blue Ocean Network Diagram (BOND)for Modeling Blue Ocean Strategy and Assumptions: Case of Google Search
    “Exponentially increase the business’s Value Quotient (= Benefit/Cost)”
    Quality (Speed)
    +
    ?
    +
    +
    +
    +
    -
    24x7 Personalization/ Customization
    CUSTOMERS (Sales/Revenue)
    COST (Price)
    +
    +
    +
    -
    +
    +
    +
    +
    -
    +
    Differentiation (Simplicity/Brand/ Novelty)
    +
    Business Action …
    +
    +
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 35. Blue Ocean Network Diagram (BOND)for Scoring Elements of the Value Quotient for a Business (Project)
    BENEFIT
    Quality:
    (1-10)
    24x7 Personalization:
    (1-10)
    CUSTOMERS (Sales/Revenue)
    COST (Price):
    (1-10)
    Differentiation (Simplicity/Brand):(1-10)
    Business Action …
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 36. How to Quickly Develop an IVQ Strategy and Value Quotient
    Obtain, from customer interviews or questionnaires, scores for the existing performance of each element or “value quotientfactor” on the Blue Ocean Network Diagram (BOND) and for the surveyed or “Red Ocean” company.
    Score each element of Value Quotient using a scale from 1 (low) to 10 (high):
    • Quality: (1-10)
    • 37. Cost: (1-10)
    • 38. Differentiation: (1-10)
    • 39. Personalization (Customization): (1-10)
    Plot, on a Blue Ocean Compass, the average score for each element. Then, draw the profile or radar chart for the existing performance of the surveyed company.
    Explore scenarios for desired or futureprofilesthat are strongly differentiated from “Red Ocean” profiles as well as lie closer to the “ideal” Blue Ocean.
    Choose the Blue Ocean profile with the highest Value Quotient (VQ). Then, derive corresponding IVQ (Blue Ocean) strategies for competitive advantage and value propositions for segments (“niches”) of customers.
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 40. BLUE OCEAN COMPASS: 60,000ft View of the Value Quotient
    Google Search
    4 ELEMENTS OF BUSINESS MODEL:
    Competitive Advantage Strategies
    • Increase quality (speed) to level 9
    • 41. Maintain cost at free: level 1
    • 42. Increase differentiation (simplicity/relevance/ brand/novelty) to level 8
    • 43. Increase on-demand; 24x7/(personalization; customization) services to level 8
    Value Propositions (Innovative Processes)
    • Higher quality (speed) and greater simplicity
    • 44. Higher differentiation (simplicity/relevance/ brand/novelty) at no additional cost
    • 45. Higher 24x7 personalization (for advertisers/ affiliates: AdWords; AdRank; AdSense)
    Targeted Customer Segments (Niches)
    • Students/Researchers/Internet Users who directly and quickly want information
    • 46. Early adopter/innovator; Non-customers
    • 47. Low cost-Advertisers
    • 48. Website Owners/Content Providers
    Value Quotient (VQ)
    • Benefit = Quality + Differentiation + Personalization = (9 + 8 + 8)/3 = 25/3 = 8.3
    • 49. Cost = 1
    • 50. Value Quotient (VQ) = 8.3/1 = 8.3
    (for Generally Redesigning a Business Model & Value Proposition)
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 51. STRATEGY RADAR: 40,000ft View of the Value Quotient
    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
    • 52. Reduce meals to level 2.1
    • 53. Increase friendly service to level 8.8
    Personalization (P)
    • Reduce personalization to level 1
    Value Propositions (Innovative Processes)
    • Higher speed at lower cost
    • 54. Friendlier service at lower cost
    Targeted Customer Segments (Niches)
    • Frequent/Low-cost traveler
    • 55. 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
    • 56. Cost = 1.3
    • 57. Value Quotient (VQ) = 4.52/1.3 = 3.4
    (for More Specifically Redesigning a Business Model & Value Proposition)
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 58. BLUE OCEAN STRATEGIC PLAN: Strategic View of the Business
    for FacilitatingIVQ Strategy Execution, Organizational Alignment, and Total Employee Engagement
    INDUSTRY/BUSINESS
     
    • Industry: Computer (Software); Advertising
    • 59. Niche: Internet Search; Online Ads
    • 60. Model: Business to Consumer (B2C); Business to Business (B2B); Platform
    COMPANY BACKGROUND
    • Location: Mountain View, California
    • 61. Founder(s): Sergey Brin; Larry Page
    • 62. Revenue: US$21.79 billion (2008)
    • 63. No. of Direct Competitors:
    PRODUCTS/SERVICES
    •   Internet Search Engine: Google Search
    • 64. Online Bidding Platform:Adwords
    • 65. Online Syndicated Ads: Adsense
    • 66. Complementary Apps: Maps, etc.
    CUSTOMER VALUE PROPOSITION
    • Uncluttered, fast, free, accurate search engine results and experience
    • 67. Monetization of web page/site
    • 68. Targeted, measurable, cost-effective, and relevant online advertising
    BLUE OCEAN STRATEGIC PLAN FOR: GOOGLE SEARCH
    CUSTOMER BENEFITS/EXPERIENCE
    • Simple interface/Easy to use
    • 69. Fast, accurate, and relevant results
    • 70. Free search service
    • 71. Unobtrusive ads; Site monetization
    • 72. Targeted ads based on page’s content
    VISION (“Future Headline”)
    • Search engine platform; Software-as-a-Service (platform)
    • 73. Advertising platform
    • 74. Gateway to world’s knowledge-base
    MAIN GOAL/OBJECTIVE/STRATEGY
    Blue Ocean Strategic Plan for providing an unprecedented customer experience
    • (See Blue Ocean Compass & Blue Ocean Map; Blue Ocean PAD; Value Chain Model; Blue Ocean Dashboard)
    MISSION/CORE VALUES
    • “To organize the world's information and make it universally accessible and useful”
    • 75. “Don’t Be Evil”
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 76. Ideal Value Chain (Business Model): Tactical View
    “Perfect, Free, Simple, and Personalized (PFSP)”
    E: EMPLOYEES/KNOWLEDGE ASSETS/ CULTURE
    • Highly Productive/Creative workers
    • 77. (Experienced) Management
    • 78. Patented PageRank Algorithm
    • 79. Android: Operating System
    • 80. Software Development Kits (SDK)
    S: SUPPLIERS/MATERIALS
    M: MACHINERY/EQUIPMENT/ FACILITY
    External
    • Efficient Data Centers/Scalable Architecture/Server Farms
    • 83. WiFi Infrastructure
    • 84. Satellite
    E: ENVIRONMENT
    • Competitors: Yahoo; AOL; MSN; etc.
    • 85. Non-customers/Non-consumers
    • 86. Partners/Complementors
    • 87. Investors/Board of Directors
    • 88. Gov./Community (Open Source)/Env.
    GOOGLE’S VALUE CHAIN (Business Model)
    P: PROCESSES/STRATEGIES
    • Procurement; HR Mngt; Operations
    • 89. Technology/R & D/Innovn/Production
    • 90. Marketing/Branding/PR/Sales
    • 91. Distribution/Logistics/Partnering
    • 92. Customer Service (Relationship Mngt)
    “PFSP”
    R: RETAILERS/DISTRIBUTORS/ CHANNELS
    • Website Owners
    • 93. Content Providers: Individuals/ Corporations (Portals)
    • 94. Affiliates; Partners: OEMs; Browsers
    C: CUSTOMERS/CONSUMERS
    • Web Users/Searchers: Desktop/Mobile
    • 95. Website Owners
    • 96. Advertisers - > Revenue
    • 97. Enterprises (Search) -> Revenue
    • 98. Software/API Developers
    O: OUTPUTS/PRODUCT/SERVICE
    • Google Search Engine/Search platform
    • 99. Bidding & Advertising Platform: AdWords; AdSense; AdRank
    • 100. Other Products/Apps such as Google Appliance
    KEY
    Revenue (Information Flow)
    Cost(Information Flow)
    Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain?
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 101. Template for Ideal Value Chain (Business Model)
    Flows & Resources for “Perfect, Free, Simple, and Personalized (PFSP)”
    E: EMPLOYEES/KNOWLEDGE ASSETS/ CULTURE
    S: SUPPLIERS/MATERIALS
    M: MACHINERY/EQUIPMENT/ FACILITY
    E: ENVIRONMENT
    IDEAL VALUE CHAIN (BUSINESS MODEL):
    Flows & Resources -
    “Perfect, Free, Simple, and Personalized”
    P: PROCESSES/STRATEGIES
    • Procurement; HR Mngt; Operations
    • 106. Technology/R & D/Innovn/Production
    • 107. Marketing/Branding/PR/Sales
    • 108. Distribution/Logistics/Partnering
    • 109. Customer Service (Relationship Mngt)
    R: RETAILERS/DISTRIBUTORS/ CHANNELS/INTERFACE
    C: CUSTOMERS/CONSUMERS
    O: OUTPUTS/PRODUCT/SERVICE
    KEY
    Revenue (Information Flow)
    Cost (Information Flow)
    Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain?
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 110. WHEEL OF OBSTACLES3 Internal Obstacles to Realizing the Ideal Value Quotient (IVQ) or Blue Ocean
    AIG
    Denver Airport
    Enron
    Alaska’s Road to Nowhere
    “Me Too” Search Engines
    Detroit Automakers
    Traditional Airlines
    Healthcare
    “Mom and Pop” Businesses
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 111. INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS & PURSUING THE IDEAL VALUE QUOTIENT
    (Achieving apparently impossible business goals, strategies, and value propositions)
    EMPLOYEE PROCESSES
    • Specialization/IP Creation-Protection
    • 112. Outsourcing/Sub-contracting/Agents
    • 113. ‘Star’ Performers/Top grading/Fun
    • 114. Wisdom of the Crowd/Co-creation
    • 115. Cross-functional Teams/Downsizing
    GENERAL PROCESSES
    • Vertical/Horizontal Integration
    • 116. Extension/Compression/Removal
    • 117. Open Collaboration/Long Tail (80-20)
    • 118. Unbundling/De-integration/Bundling
    • 119. Convergence/Standardization/Self-X
    MACHINERY/FACILITY PROCESSES
    • Franchise/Leasing/Rental
    • 120. Localization/Substitution/Reversal
    • 121. Modularization/Standardization
    • 122. Asymmetry/’Poka Yoke’/Nesting
    • 123. Attributes Interdependency
    ENVIRONMENT/SUPPLIER PROCESSES
    • Partnering/Complementing/Feedback
    • 124. Merging/(De)Centralizing/Integration
    • 125. Networking/Volunteering/Recycling
    • 126. Convergence/(De)Regulation
    • 127. Distributorship/Affiliates/Network
    INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS & PURSUING THE IDEAL VALUE QUOTENT
    DOMAIN-PROCESSES/FUNCTIONALITY
    • Digitalization/Idealization/Downsizing
    • 128. Virtualization/Customization/DIY/JIT
    • 129. Zero Defect/Lean/Six Sigma/Analytics
    • 130. Automatic/Outsourcing/Scalability
    • 131. Restructuring/Inventive Principles
    CHANNEL/WHOLESALERS PROCESSES
    • Multiple Channels/Syndication/Chain
    • 132. Pyramid/Multi-level Markets/Wheel
    • 133. Digitalization/Online/Word-of-mouth
    • 134. Distributorship/Affiliates/Network
    • 135. Advertising/Auction Platform/Partners
    CUSTOMER PROCESSES
    • Segmentation/Direct Selling/Branding
    • 136. Cross-subsidy/Hybridized Markets
    • 137. Subscription/Leasing/After Sale
    • 138. Auction/Co-creation/Collaboration
    • 139. Advertising/Freemium/Licensing
    PRODUCT/SERVICE PROCESSES
    • Product/Service-Platform/Package
    • 140. Service-focus/Servicing/Upgrading
    • 141. Performance-based Pricing/Discounts
    • 142. Fixed product (shell) and recurring/ replaceable/upgradeable component
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 143. BLUE OCEAN NETWORK DIAGRAM (BOND)What and Why?
    What is the Blue Ocean Network Diagram (BOND)?
    • A tool for redesigning business models, pursuing the Ideal Value Quotient (IVQ), and making better decisions
    • 144. Universal tool and visual framework for quickly and systematically eliminating 3 critical obstacles to the Ideal Value Quotient (IVQ): poor business decisions; uninspiring business goals and targets; Red Ocean (“Me Too”) strategies & models
    • 145. Global view of “What customers want” or “Voice of the Customer”
    Why Blue Ocean Network Diagram (BOND)?
    • Facilitates decision-making for management and employees as well as board of directors
    • 146. Facilitates organizational alignment and engagement especially for employees; everyone is on the same page and using the same metrics
    • 147. Provides simple framework for visualizing Blue Ocean Strategy and IVQ
    • 148. Provides simple visual framework for modeling as well as reviewing business strategies, objectives, models, assumptions, trade-offs, and decisions
    • 149. Provides transparency in the selection and weighting of “value quotient factors” or decision-making criteria for evaluating possible business choices
    • 150. Facilitates calculation of the value quotient for a business
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 151. 4 Axioms of the Ideal Value Quotient (VQ)
    Every object, which has sustainable growth, generally increases its Value Quotient (VQ) over time. Otherwise, the object declines and eventually dies.
    A real-world object exhibits trade-offs or contradictions: advantages accompa-nied by disadvantages; benefits accompanied by costs; positives accompanied by negatives; delight accompanied by pain; good accompanied by evil.
    An ideal object has an ideal Value Quotient (VQ), that is, lives in a “Blue Ocean” with no trade-off or contradiction: infinite advantages and no disadvantage; infinite benefits and no cost; infinite positive effects and no negative effect; infinite delight and no pain; good without any bad. The ideal object has zero mass and uses its internal and ‘free’ resources to perfectly do its job at no extra cost, at any time, and without any disadvantage.
    Over time, aspecies or an ecosystem of real-world objects evolves towards the ideal object. Otherwise, the species declines and becomes extinct.
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 152. Related Concepts of the Ideal Value Quotient (VQ)
    • Value Quotient (Value Engineering)
    • 153. Ideal Final Result (IFR); Ideality (TRIZ); SWOT Analysis (Business Planning)
    • 154. Benefit/Cost Ratio; Revenue to Cost Ratio (Financial Planning)
    • 155. Moore’s Law (Gordon Moore); Law of Accelerating Returns; Singularity (Ray Kurzweil)
    • 156. Disruptive Innovation (Clayton Christensen)
    • 157. Decision Theory: Rationality; Optimality; Satisficing Behavior (Economics)
    • 158. Invisible Hand; Market Forces (Economics); 80-20 Rule (Vilfredo Pareto)
    • 159. Theory of Evolution(Charles Darwin)
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 160. The Law of Increasing Value Quotient
    The Value Quotient (VQ) of a technological device as well as living system tends to follow the shape of an envelope of S-Curves that progresses towards a point of infinite Value Quotient. Otherwise, the technological device or living system declines and dies.
    Value Quotient (VQ)
    Envelope of S-Curves
    Time
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 161. Space-Time Template for the Evolution of a System
    For Facilitating the Making of Scenarios (for Business/Product) in Space and Time
    Environment (Supersystem)
    SPACE
    PRESENT SYSTEM:
    System
    Elements
    INITIAL ELEMENT
    (“SEED”)
    Past
    Present
    Future
    TIME
    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
    BOBM8. Blue Ocean-Business Models. Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com
  • 162. REFERENCES
    Battelle, J. (2005) The Search. New York: Portfolio.
    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.
    Jarvis, J. (2009) What Would Google Do?. New York: HarperCollins.
    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: Ideal-Solution Management.
    7. Shuen, A. (2008) Web 2.0. California: O’Reilly.
    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