SlideShare a Scribd company logo
1 of 31
BLUE OCEAN PLANNING & EXECUTION
8 Tools for Redesigning Business Models & Making Better Decisions




                          Dr. Rod King

  rodkuhnking@sbcglobal.net & http://businessmodels.ning.com
               http://twitter.com/RodKuhnKing
WHY REDESIGN EXISTING BUSINESS MODELS?
”Greater Competition, Digitalization, and Globalization are Creating Bloody ‘Red Oceans’ for Businesses”



               • To Exponentially Increase Business Growth and Profitability

• To Exponentially Increase the Value Quotient for Core, Peripheral, and Remote
                      Customers As Well As Non-customers

       • To Swim Out of the ‘Red Ocean’ and Make the Competition Irrelevant

                  • To Significantly Deliver More Value for Customers’ Jobs

                                • To Facilitate Mergers and Acquisitions

           • To Respond to Competitive Pressures Including Commoditization

             • To Take Advantage of Emerging Opportunities and Technology

           • To Capture Greater Value (Profit) in the Value Chain and Network

       • 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
HIGHLY SUCCESSFUL REDESIGNS OF CONVENTIONAL BUSINESS MODELS
                                 Businesses With High Value Quotient (VQ)




Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
WHAT IS THE VALUE QUOTIENT?
                               A Universal Metric of Success
                                                                                                   Ideal VQ Strategy
                                                                                                   Everyone to continuously maximize
                                                                                                   benefit while minimizing cost
                                                                                                   throughout the value chain




                              +                                                              -




                                                                                                 Note
                                                                                                 Value Quotient
                                                                                                 = Advantage/Disadvantage
                                                                                                 = Benefit/Cost
                                                                                                 = Strength/Weakness
                                                                                                 = Opportunity/Threat
                                                                                                 = Reward/Risk
                                                                                                 = Positives/Negatives
                                                                                                 = Delight/Pain
                                                                                                 = Good/Bad



Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
CUSTOMER JOBS COMPASS: What Jobs Must You Facilitate or Do In a Hierarchy of Customer Needs or ‘Jobs’?
                                                                                               Google Search
                         Customer Jobs Compass for                                             ELEMENTS OF LONG TERM-BUSINESS MODEL:

                         Google Search & Facebook
       (for Developing Tools to Make Customers Happier As Well As for
     Determining What ‘Jobs’ or Niche(s) of Total Happiness to Focus on)                       Long-term Competitive Advantage Scenarios
                                                                                               • Increase performance of/develop/acquire
                                                                                               software applications that customers hire to do
                                       Physical 'Job'                                          ‘Physical Jobs’
                                        10                                                     • Increase performance of/develop/acquire
                                                                                               software applications that customers hire to do
                                         8                                                     ‘Emotional/Social Jobs’
                                         6
                                                                                               • Increase performance of/develop/acquire
                                                                                               software applications that customers hire to do
                                         4                                                     ‘Intellectual Jobs’
                                                                                               • (Increase performance of/develop/acquire
                                         2                                                     software applications that customers hire to do
       Spiritual 'Job'                   0                            Emotional/Social 'Job'   ‘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

                                     Intellectual 'Job'                                        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 =
                             Ideal Software (Tool/Internet)   Google Search     Facebook       ‘Perfect 10’

       Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
8 Tools for Redesigning Business Models & Making Better Decisions



  BLUE OCEAN MAP: Global View                BLUE OCEAN RADAR: 200,000ft                BOND: 100,000ft

  • Illustration of Current and Desired      • Illustration of Ideal Business Result    Ways to Reduce Obstacles to Goal:
  Positions of You & Your Competitors        • Illustration of “Cost vs. Benefit”       • Facilitation of Decision-making
  • Illustration of IVQ and Market Seg-      Trade-offs (Contradictions) & Trends       • Visualization of Strategy
  ments Including Red and Blue Oceans        • Basic Elements of Value Quotient         • Modeling and Testing of Strategy


  BLUE OCEAN COMPASS: 60,000ft                                                          STRATEGY RADAR: 40,000ft

  • Visualization of Shape as well as
                                              TOOLS FOR REDESIGNING                     • Illustration of Detailed Shape of
  Trends of Competing, Desired, and             BUSINESS MODELS &                       Competing, Desired, and Ideal
  Ideal Business Results (Models)             MAKING BETTER DECSIONS                    Business Results (Models)
                                                                                        • Design of Value Proposition


  VISIONARY PLAN: Strategic View             IDEAL VALUE CHAIN: Tactical View           WHEEL OF OBSTACLES

  • Elements and Resources for               • Visualization of Ideal Value Chain       • Illustration of Internal Obstacles
  Pursuing Goal of Ideal Value Quotient      (Business Model) for IVQ Strategy          and Constraints to Achieving the
  (Blue Ocean), Achieving Blue Ocean         • Flows of Information (Cost and           Ideal Value Quotient for the Value
  Plan, and Totally Engaging Employees       Revenue) & Resources Within a              Chain or Business Model
  and Other Stakeholders                     Value Chain or Business Model




Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
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

           ∞


                             BLUE OCEAN
 Value                      Google Search
Quotient
 (VQ)
                       Highly differentiated and
                    premium-priced/free value chain
                                            Blue Ocean Plan




  (+):
DELIGHT




                                                                                                                  RED OCEAN
                                                                                                            * “Me Too” Search Engine

                    Strategic                                                                                 Lowly differentiated and
                    Choice                                        Red Ocean Plan                                low-cost value chain




           (Uncontested Experience, Market Space, or New Category) (-): PAIN                                       No. of Competitors


               Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
BLUE OCEAN RADAR: 200,000ft View of the Value Quotient
 for Comparing, Evaluating, and Redesigning Business Models As Well As Products and Services



BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs
(Revenue)               Ideal Value Quotient(Blue Ocean)                     Object/Core Job: ………………………………..…….
10
                                                                                                             (cf. Goal of IVQ to
                                                                                                             Moore’s Law &
 8         Desired VQ = 8/2=                                                                                 “Singularity”)
           4

 6

 4

 2                                                         Existing VQ = 2/6=
                                                           0.33 < 1

 0
     (Free)
      0                        2                       4          COST          6                        8                        10

 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                      Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
 Revenue to Cost Ratio = Slope of Value Quotient Line                     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
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”




BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs for Computing Power
(Transistors)        Ideal Value Quotient (Blue Ocean or “Singularity”)        Object/Core Job: Integrated Circuit Board
10
                                                                                                             (cf. Goal of IVQ to
                                                                                                             Moore’s Law &
 8                                                                                                           “Singularity”)
           VQ = 8/1= 8
 6

 4
                VQ = 4/1= 4

 2
                   VQ = 2/1= 2

 0
     (Free)                                                     COST
      0                        2                       4        (Size)          6                        8                        10

  Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                     Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
  Revenue to Cost Ratio = Slope of Value Quotient Line                    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
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”




BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Computing
(Performance)         Ideal Value Quotient (INTERNET or “Singularity”)       Object/Core Job: Computer/Storage Devices
10
                                                                                                             IVQ –Problem Solving
                                                                                                             Look within and across
 8                                                                                                           industries as well as in
                                                                                                             nature for similar or
                                                                                                             analogous resolution of
                                                                                                             trade-off
 6

 4

 2

 0
     (Free)                                                     COST
       0                       2                       4        (Size)          6                        8                         10

  Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                     Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
  Revenue to Cost Ratio = Slope of Value Quotient Line                    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
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”




BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Transportation
(Speed)               Ideal Value Quotient (LIGHT or Blue Ocean)                                 Object/Core Job: Vehicles
10
                                                                                                             IVQ –Problem Solving
                                                                                                             Look within and across
 8                                                                                                           industries as well as in
                                                                                                             nature for similar or
                                                                                                             analogous resolution of
                                                                                                             trade-off
 6

 4

 2

 0
     (Free)                                                     COST
       0                       2                       4        (Size)          6                        8                         10

  Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                     Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
  Revenue to Cost Ratio = Slope of Value Quotient Line                    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
Using the Blue Ocean Radar to Creatively Resolve Trade-offs
                 “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”




BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Information Processing
(Amt of Info)           Ideal Value Quotient (Blue Ocean or “Infinite Genius”)              Object/Core Job: Linear Page
10
                                                                                                             IVQ –Problem Solving
                                                                                                             Look within and across
 8                                                                                                           industries as well as in
                                                                                                             nature for similar or
                                                                                                             analogous resolution of
                                                                                                             trade-off
 6

 4

 2

 0
     (Free)                                                      COST
      0                        2                       4 (Processing Time) 6                             8                         10

  Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                     Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
  Revenue to Cost Ratio = Slope of Value Quotient Line                    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
Using the Blue Ocean Radar to Creatively Resolve Trade-offs
                 “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”




BENEFIT                Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Production
(Quality)            Ideal Value Quotient (Blue Ocean or “Singularity”)                         Object/Core Job: Vehicles
10
                                                                                                             IVQ –Problem Solving
                                                                                                             Look within and across
 8                                                                                                           industries as well as in
                                                                                                             nature for similar or
                                                                                                             analogous resolution of
                                                                                                             trade-off
 6

 4

 2

 0
     (Free)                                                     COST
      0                        2                       4                        6                        8                         10

  Value Quotient (VQ) = Benefit/Cost = Revenue/Cost =                     Ideal Value Quotient (Blue Ocean)        Ideal Final Result
                                                                          of Continuously Implementing IVQ Decisions
  Revenue to Cost Ratio = Slope of Value Quotient Line                    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
Blue Ocean Network Diagram (BOND)
 for Quickly Making Better Decisions, Goals, and Strategies in Business (Projects)
                                                                                                   “Exponentially increase the
            BENEFIT
                                                                                                   business’s Value Quotient
                                                                                                   (= Benefit/Cost)”

                                                        Quality




                24x7
           Personalization/                          CUSTOMERS
                                                                                               COST (Price)
            Customization                          (Sales/Revenue)




                                                                                                        Business Action …
                                                    Differentiation
                                                   (Simplicity/Brand/
                                                       Novelty)



Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Blue Ocean Network Diagram (BOND)
    for Visualizing Blue Ocean Goals & Strategy: Case of Google Search
                                                                                                   “Exponentially increase the
            BENEFIT
                                                                                                   business’s Value Quotient
                                                                                                   (= Benefit/Cost)”

                                                    Quality (Speed):
                                                      INCREASE




                24x7
           Personalization:                          CUSTOMERS
                                                                                               COST (Price):
              INCREASE                             (Sales/Revenue)                               REDUCE




                                                                                                        Business Action …
                                                    Differentiation
                                                   (Simplicity/Brand):
                                                       INCREASE


Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
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
                                  +     +              CUSTOMERS
           Personalization/                                                     +      -
                                                                                               COST (Price)
            Customization                            (Sales/Revenue)
                              +                                                        +
                 +
                                                           +                                          -

                                                           +
                                                 +

                                                                                                          Business Action …
                                                      Differentiation
                                                 +   (Simplicity/Brand/   +
                                                         Novelty)



Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Blue Ocean Network Diagram (BOND)
          for Scoring Elements of the Value Quotient for a Business (Project)
            BENEFIT



                                                        Quality:
                                                         (1-10)




                 24x7
           Personalization:                          CUSTOMERS
                                                                                               COST (Price):
                (1-10)                             (Sales/Revenue)                                (1-10)




                                                                                                        Business Action …
                                                    Differentiation
                                                   (Simplicity/Brand):
                                                         (1-10)


Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
How to Quickly Develop an IVQ Strategy and Value Quotient


1.      Obtain, from customer interviews or questionnaires, scores for the existing
        performance of each element or “value quotient factor” 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)
       •    Cost: (1-10)
       •    Differentiation: (1-10)
       •    Personalization (Customization): (1-10)
2.      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.
3.      Explore scenarios for desired or future profiles that are strongly differentiated
        from “Red Ocean” profiles as well as lie closer to the “ideal” Blue Ocean.
4.      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
BLUE OCEAN COMPASS: 60,000ft View of the Value Quotient
                                                                                          Google Search
               Blue Ocean Compass for                                                     4 ELEMENTS OF BUSINESS MODEL:

       “Me Too” Search Engine and Google Search                                           Competitive Advantage Strategies
                                                                                          • Increase quality (speed) to level 9
   (for Generally Redesigning a Business Model & Value Proposition)
                                                                                          • Maintain cost at free: level 1
                                                                                          • Increase differentiation (simplicity/relevance/
                                                                                          brand/novelty) to level 8
                                   Quality (Speed)                                        • Increase on-demand; 24x7/(personalization;
                                     10                                                   customization) services to level 8

                                       8                                                  Value Propositions (Innovative Processes)
                                       6
                                                                                          • Higher quality (speed) and greater simplicity
                                                                                          • Higher differentiation (simplicity/relevance/
                                       4                                                  brand/novelty) at no additional cost
                                                                                          • Higher 24x7 personalization (for advertisers/
                                       2                                                  affiliates: AdWords; AdRank; AdSense)
   On-demand; 24x7
                                       0                            Cost (Price)
   (Personalization)                                                                      Targeted Customer Segments (Niches)
                                                                                          • Students/Researchers/Internet Users who
                                                                                          directly and quickly want information
                                                                                          • Early adopter/innovator; Non-customers
                                                                                          • Low cost-Advertisers
                                                                                          • Website Owners/Content Providers

                                                                                          Value Quotient (VQ)
                                    Differentiation                                       • Benefit = Quality + Differentiation +
                                (Simplicity/Relevance)                                    Personalization = (9 + 8 + 8)/3 = 25/3 = 8.3
                                                                                          • Cost = 1
                                                                                          • Value Quotient (VQ) = 8.3/1 = 8.3


                         Ideal Business Result   Google Search   "Me Too" Search Engine


       Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
STRATEGY RADAR: 40,000ft View of the Value Quotient
                                                                                            Southwest Airlines
                        Strategy Radar for                                                  4 ELEMENTS OF BUSINESS MODEL:

            the Average Airline and Southwest Airlines                                      Competitive Advantage Strategies
                                                                                            Quality (Q)
(for More Specifically Redesigning a Business Model & Value Proposition)
                                                                                            • Increase speed to level 9
                                                                                            Cost ( C )
                                                                                            • Reduce ticket price to level 1.3
                                       Speed (Q)                                            Differentiation (D)
                                       10                                                   • Reduce lounges to level 1.2
                                                                                            • Reduce meals to level 2.1
                                        8                                                   • Increase friendly service to level 8.8
                                        6
                                                                                            Personalization (P)
     Seating Choice (P)                                          Price ( C )                • Reduce personalization to level 1
                                        4
                                                                                            Value Propositions (Innovative Processes)
                                        2                                                   • Higher speed at lower cost
                                        0                                                   • Friendlier service at lower cost

                                                                                            Targeted Customer Segments (Niches)
                                                                                            • Frequent/Low-cost traveler
                                                                                            • Early adopter/innovator; Non-customers
    Friendly Service (D)                                         Lounges (D)
                                                                                            Value Quotient (VQ)
                                                                                            • Benefit = Quality + Differentiation +
                                                                                            Customization = (9 + 1.2 + 2.1 + 8.8 + 1)/5 =
                                       Meals (D)                                            22.1/5 = 4.42
                                                                                            • Cost = 1.3
                                                                                            • Value Quotient (VQ) = 4.52/1.3 = 3.4



                           Ideal Business Result   Southwest Airlines     Average Airline


       Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
BLUE OCEAN PLAN: Strategic View of the Business
        for Facilitating IVQ Strategy Execution, Organizational Alignment, and Total Employee Engagement



  COMPANY BACKGROUND                           INDUSTRY/BUSINESS                          PRODUCTS/SERVICES

  •   Location: Mountain View, California      • Industry: Computer (Software);           •   Internet Search Engine: Google Search
  •   Founder(s): Sergey Brin; Larry Page      Advertising                                •   Online Bidding Platform: Adwords
  •   Revenue: US$21.79 billion (2008)         • Niche: Internet Search; Online Ads       •   Online Syndicated Ads: Adsense
  •   No. of Direct Competitors:               • Model: Business to Consumer (B2C);       •   Complementary Apps: Maps, etc.
                                               Business to Business (B2B); Platform


  CUSTOMER VALUE PROPOSITION                                                              CUSTOMER BENEFITS/EXPERIENCE
                                                BLUE OCEAN PLAN FOR:
  • Uncluttered, fast, free, accurate search       GOOGLE SEARCH                          •   Simple interface/Easy to use
  engine results and experience                                                           •   Fast, accurate, and relevant results
  • Monetization of web page/site                                                         •   Free search service
  • Targeted, measurable, cost-                                                           •   Unobtrusive ads; Site monetization
  effective, and relevant online advertising                                              •   Targeted ads based on page’s content


  MAIN GOAL/OBJECTIVE/STRATEGY                 VISION (“Future Headline”)                 MISSION/CORE VALUES

  Blue Ocean Plan for providing an             • Search engine platform; Software-as-a-   • “To organize the world's information
  unprecedented customer experience            Service (platform)                         and make it universally accessible and
  • (See Blue Ocean Compass & Blue             • Advertising platform                     useful”
  Ocean Map; Value Chain Model; Blue           • Gateway to world’s knowledge-base        • “Don’t Be Evil”
  Ocean Dashboard)




Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Ideal Value Chain (Business Model): Tactical View
                                 “Perfect, Free, Simple, and Personalized (PFSP)”



  S: SUPPLIERS/MATERIALS                        E: EMPLOYEES/KNOWLEDGE ASSETS/                  M: MACHINERY/EQUIPMENT/
                                                CULTURE                                         FACILITY
  • Computers                                   • Highly Productive/Creative workers            External
  • Servers                                     • (Experienced) Management                      •Efficient Data Centers/Scalable
  • Other Items                                 • Patented PageRank Algorithm                   Architecture/Server Farms
                                                • Android: Operating System                     • WiFi Infrastructure
                                                • Software Development Kits (SDK)               • Satellite


  E: ENVIRONMENT                                     GOOGLE’S VALUE CHAIN                       P: PROCESSES/STRATEGIES

  •   Competitors: Yahoo; AOL; MSN; etc.               (Business Model)                         •   Procurement; HR Mngt; Operations
  •   Non-customers/Non-consumers                                                               •   Technology/R & D/Innovn/Production
  •   Partners/Complementors                                                                    •   Marketing/Branding/PR/Sales
  •   Investors/Board of Directors                                                              •   Distribution/Logistics/Partnering
  •   Gov./Community (Open Source)/Env.              “PFSP”                                     •   Customer Service (Relationship Mngt)


  C: CUSTOMERS/CONSUMERS                        R: RETAILERS/DISTRIBUTORS/                      O: OUTPUTS/PRODUCT/SERVICE
                                                CHANNELS
  •   Web Users/Searchers: Desktop/Mobile       • Website Owners                                • Google Search Engine/Search platform
  •   Website Owners                            • Content Providers: Individuals/               • Bidding & Advertising Platform:
  •   Advertisers - > Revenue                   Corporations (Portals)                          AdWords; AdSense; AdRank
  •   Enterprises (Search) -> Revenue           • Affiliates; Partners: OEMs; Browsers          • Other Products/Apps such as Google
  •   Software/API Developers                                                                   Appliance



       KEY                 Revenue (Information Flow)                      Strategic Question: What is the Value Quotient (VQ) of
                                                                           elements of the value chain as well as the entire value chain?
                           Cost (Information Flow)
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Template for Ideal Value Chain (Business Model)
                Flows & Resources for “Perfect, Free, Simple, and Personalized (PFSP)”



  S: SUPPLIERS/MATERIALS                       E: EMPLOYEES/KNOWLEDGE ASSETS/              M: MACHINERY/EQUIPMENT/
                                               CULTURE                                     FACILITY




  E: ENVIRONMENT                                       IDEAL VALUE CHAIN                   P: PROCESSES/STRATEGIES

  •   Competitors                                      (BUSINESS MODEL):                   •   Procurement; HR Mngt; Operations
  •   Non-customers/Non-consumers                      Flows & Resources -                 •   Technology/R & D/Innovn/Production
  •   Partners                                                                             •   Marketing/Branding/PR/Sales
  •   Investors
                                                    “Perfect, Free, Simple, and            •   Distribution/Logistics/Partnering
  •   Gov./Community/Society/Environment                  Personalized”                    •   Customer Service (Relationship Mngt)


  C: CUSTOMERS/CONSUMERS                       R: RETAILERS/DISTRIBUTORS/                  O: OUTPUTS/PRODUCT/SERVICE
                                               CHANNELS/INTERFACE




       KEY                Revenue (Information Flow)                  Strategic Question: What is the Value Quotient (VQ) of
                                                                      elements of the value chain as well as the entire value chain?
                          Cost (Information Flow)
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
WHEEL OF OBSTACLES
              3 Internal Obstacles to Realizing the Ideal Value Quotient (IVQ) or Blue Ocean


                                          AIG                                     Denver Airport

                                                              Poor
                                                            Business
                                                            Decisions
                              Enron
                                                                                                    Alaska’s Road to Nowhere




“Me Too” Search Engines                                                                                   Detroit Automakers
                                                         WHEEL OF
                                                         OBSTACLES
                                      Red Ocean                                    Uninspiring
                                      (“Me Too”)                                    Business
                                       Strategies                                   Goals &
                                       & Models                                      Targets
       Traditional Airlines                                                                            Healthcare



                                                    “Mom and Pop” Businesses


    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS &
                    PURSUING THE IDEAL VALUE QUOTIENT
                    (Achieving apparently impossible business goals, strategies, and value propositions)


  GENERAL PROCESSES                          EMPLOYEE PROCESSES                          MACHINERY/FACILITY PROCESSES

  •   Vertical/Horizontal Integration        •   Specialization/IP Creation-Protection   •   Franchise/Leasing/Rental
  •   Extension/Compression/Removal          •   Outsourcing/Sub-contracting/Agents      •   Localization/Substitution/Reversal
  •   Open Collaboration/Long Tail (80-20)   •   ‘Star’ Performers/Top grading/Fun       •   Modularization/Standardization
  •   Unbundling/De-integration/Bundling     •   Wisdom of the Crowd/Co-creation         •   Asymmetry/’Poka Yoke’/Nesting
  •   Convergence/Standardization/Self-X     •   Cross-functional Teams/Downsizing       •   Attributes Interdependency


  ENVIRONMENT/SUPPLIER PROCESSES             INNOVATIVE PROCESSES FOR                    DOMAIN-PROCESSES/FUNCTIONALITY

  •   Partnering/Complementing/Feedback        REDESIGNING BUSINESS                      •   Digitalization/Idealization/Downsizing
  •   Merging/(De)Centralizing/Integration    MODELS & PURSUING THE                      •   Virtualization/Customization/DIY/JIT
  •   Networking/Volunteering/Recycling                                                  •   Zero Defect/Lean/Six Sigma/Analytics
  •   Convergence/(De)Regulation
                                               IDEAL VALUE QUOTENT                       •   Automatic/Outsourcing/Scalability
  •   Distributorship/Affiliates/Network                                                 •   Restructuring/Inventive Principles


  CUSTOMER PROCESSES                         CHANNEL/WHOLESALERS PROCESSES               PRODUCT/SERVICE PROCESSES

  •   Segmentation/Direct Selling/Branding   •   Multiple Channels/Syndication/Chain     • Product/Service-Platform/Package
  •   Cross-subsidy/Hybridized Markets       •   Pyramid/Multi-level Markets/Wheel       • Service-focus/Servicing/Upgrading
  •   Subscription/Leasing/After Sale        •   Digitalization/Online/Word-of-mouth     • Performance-based Pricing/Discounts
  •   Auction/Co-creation/Collaboration      •   Distributorship/Affiliates/Network      • Fixed product (shell) and recurring/
  •   Advertising/Freemium/Licensing         •   Advertising/Auction Platform/Partners   replaceable/upgradeable component




Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
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
• 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
• 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
• Facilitates organizational alignment and engagement especially for employees;
everyone is on the same page and using the same metrics
• Provides simple framework for visualizing Blue Ocean Strategy and IVQ
• Provides simple visual framework for modeling as well as reviewing business
strategies, objectives, models, assumptions, trade-offs, and decisions
• Provides transparency in the selection and weighting of “value quotient
factors” or decision-making criteria for evaluating possible business choices
• 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
4 Axioms of the Ideal Value Quotient (VQ)


1. Every object, which has sustainable growth, generally increases its Value
   Quotient (VQ) over time. Otherwise, the object declines and eventually dies.

2. 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.

3. 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.

4. Over time, a species 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
Related Concepts of the Ideal Value Quotient (VQ)

•     Value Quotient (Value Engineering)

•     Ideal Final Result (IFR); Ideality (TRIZ); SWOT Analysis (Business Planning)

•     Benefit/Cost Ratio; Revenue to Cost Ratio (Financial Planning)

•     Moore’s Law (Gordon Moore); Law of Accelerating Returns; Singularity (Ray Kurzweil)

•     Disruptive Innovation (Clayton Christensen)

•     Decision Theory: Rationality; Optimality; Satisficing Behavior (Economics)

•     Invisible Hand; Market Forces (Economics); 80-20 Rule (Vilfredo Pareto)

•     Theory of Evolution (Charles Darwin)



    Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
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
Space-Time Template for the Evolution of a System
                           For Facilitating the Making of Scenarios (for Business/Product) in Space and Time




        Environment
        (Supersystem)




                                                                         PRESENT SYSTEM:
SPACE




        System




        Elements




          INITIAL
          ELEMENT                       Past                                  Present                              Future
          (“SEED”)
                                                                                 TIME


           Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
REFERENCES


1. Battelle, J. (2005) The Search. New York: Portfolio.
2. Chesbrough, H. (2006) Open Business Models. Boston: Harvard Business School (HBS) Press.
3. Christensen, C.; Raynor, M.E. (2003) The Innovator’s Solution. Boston: Harvard Business School
   (HBS) Press.
4. Jarvis, J. (2009) What Would Google Do?. New York: HarperCollins.
5. Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS)
   Press.
6. King, R. (2009) The Infinitely Zoomable Pagelet: How Knowledge Workers Can Overcome
   Information Overload in Multi-disciplinary Teams, Projects, and On The Internet. 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

More Related Content

Viewers also liked (9)

Ralph Lauren Competitive Review
Ralph Lauren Competitive ReviewRalph Lauren Competitive Review
Ralph Lauren Competitive Review
 
Red bull final case study
Red bull final case studyRed bull final case study
Red bull final case study
 
Blue Ocean Strategy (BOS)
Blue Ocean Strategy (BOS)Blue Ocean Strategy (BOS)
Blue Ocean Strategy (BOS)
 
Red Bull Blue Ocean Strategy
Red Bull Blue Ocean StrategyRed Bull Blue Ocean Strategy
Red Bull Blue Ocean Strategy
 
Red Bull
Red Bull Red Bull
Red Bull
 
Red bull ppt
Red bull pptRed bull ppt
Red bull ppt
 
Red Bull Marketing Campaign
Red Bull Marketing CampaignRed Bull Marketing Campaign
Red Bull Marketing Campaign
 
Redbull Energy Drink
Redbull Energy DrinkRedbull Energy Drink
Redbull Energy Drink
 
Blue Ocean Strategy - Summary and Examples
Blue Ocean Strategy - Summary and ExamplesBlue Ocean Strategy - Summary and Examples
Blue Ocean Strategy - Summary and Examples
 

More from Rod King, Ph.D.

FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...
FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...
FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...Rod King, Ph.D.
 
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...Rod King, Ph.D.
 
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...Rod King, Ph.D.
 
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...Rod King, Ph.D.
 
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...Rod King, Ph.D.
 
STUDENTSOURCING: A Mini-Case Study on “Hacking for X (H4X)” Program at Stanfo...
STUDENTSOURCING:A Mini-Case Study on “Hacking for X (H4X)” Programat Stanfo...STUDENTSOURCING:A Mini-Case Study on “Hacking for X (H4X)” Programat Stanfo...
STUDENTSOURCING: A Mini-Case Study on “Hacking for X (H4X)” Program at Stanfo...Rod King, Ph.D.
 
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...Rod King, Ph.D.
 
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...Rod King, Ph.D.
 
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...Rod King, Ph.D.
 
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...Rod King, Ph.D.
 
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...Rod King, Ph.D.
 
Universal Business Modeling Template & Language for Venture Capitalists, Scal...
Universal Business Modeling Template & Language for Venture Capitalists, Scal...Universal Business Modeling Template & Language for Venture Capitalists, Scal...
Universal Business Modeling Template & Language for Venture Capitalists, Scal...Rod King, Ph.D.
 
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...Integrate One Line Business Modeling & Customer-First Process Improvement: Th...
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...Rod King, Ph.D.
 
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...Rod King, Ph.D.
 
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?Rod King, Ph.D.
 
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...Rod King, Ph.D.
 
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...Rod King, Ph.D.
 
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVAS
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVASFamily of 4 Visual Templates for the TOTAL HAPPINESS CANVAS
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVASRod King, Ph.D.
 
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...Rod King, Ph.D.
 
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONS
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONSBusiness Model Canvas: GOOD TOOL with BAD INSTRUCTIONS
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONSRod King, Ph.D.
 

More from Rod King, Ph.D. (20)

FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...
FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...
FRACTAL GRIDDING: A Visual Technique for Managing Personal, Enterprise, and N...
 
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...
Build a Culture for Rapidly Achieving BALANCED GREATNESS Everywhere: A Case S...
 
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...
APEx Meta-Platform: Rapidly Document, Organize, Manage, and Solve NATIONAL SE...
 
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...
SUPPLY CHAIN CANVAS: Deliver “10x Faster, Better, and Cheaper Solutions” for ...
 
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...
Can BUSINESS MODEL HACKING Instantly Save the National Defense & Intelligence...
 
STUDENTSOURCING: A Mini-Case Study on “Hacking for X (H4X)” Program at Stanfo...
STUDENTSOURCING:A Mini-Case Study on “Hacking for X (H4X)” Programat Stanfo...STUDENTSOURCING:A Mini-Case Study on “Hacking for X (H4X)” Programat Stanfo...
STUDENTSOURCING: A Mini-Case Study on “Hacking for X (H4X)” Program at Stanfo...
 
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...
2x2 Value Engine Map: Instantly Revolutionize Product Pitching, Business Stra...
 
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...
BUSINESS MODEL CANVAS: A Good Tool With Bad Instructions? Get Free Preview of...
 
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...
Universal Pain Reliever for Exponential (10X) Lean Startups: The Lean POKER S...
 
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...
Silicon Valley’s Tools for Translating Startup Ideas into Billion Dollar Comp...
 
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...
12 Disruption Vulnerabilities of the Business Model Canvas: BUSINESS MODEL CA...
 
Universal Business Modeling Template & Language for Venture Capitalists, Scal...
Universal Business Modeling Template & Language for Venture Capitalists, Scal...Universal Business Modeling Template & Language for Venture Capitalists, Scal...
Universal Business Modeling Template & Language for Venture Capitalists, Scal...
 
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...Integrate One Line Business Modeling & Customer-First Process Improvement: Th...
Integrate One Line Business Modeling & Customer-First Process Improvement: Th...
 
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...
Two Steps for Rapidly Eliminating Pain in Every Business, Non-Profit Organiza...
 
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?
Should We Burn the BUSINESS MODEL CANVAS and LEAN CANVAS?
 
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...
Business Model Strip SCORECARD FOR RADICALLY IMPROVING THE PERFORMANCE OF BUS...
 
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...
Flourishing Business Canvas vs. Total Happiness Canvas: Similarities and Diff...
 
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVAS
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVASFamily of 4 Visual Templates for the TOTAL HAPPINESS CANVAS
Family of 4 Visual Templates for the TOTAL HAPPINESS CANVAS
 
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...
Rapid Organizational Improvement (ROI): Instantly Xray Every For-Profit and N...
 
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONS
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONSBusiness Model Canvas: GOOD TOOL with BAD INSTRUCTIONS
Business Model Canvas: GOOD TOOL with BAD INSTRUCTIONS
 

Recently uploaded

08448380779 Call Girls In Civil Lines Women Seeking Men
08448380779 Call Girls In Civil Lines Women Seeking Men08448380779 Call Girls In Civil Lines Women Seeking Men
08448380779 Call Girls In Civil Lines Women Seeking MenDelhi Call girls
 
Slack Application Development 101 Slides
Slack Application Development 101 SlidesSlack Application Development 101 Slides
Slack Application Development 101 Slidespraypatel2
 
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...Igalia
 
Presentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreterPresentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreternaman860154
 
Histor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slideHistor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slidevu2urc
 
Advantages of Hiring UIUX Design Service Providers for Your Business
Advantages of Hiring UIUX Design Service Providers for Your BusinessAdvantages of Hiring UIUX Design Service Providers for Your Business
Advantages of Hiring UIUX Design Service Providers for Your BusinessPixlogix Infotech
 
From Event to Action: Accelerate Your Decision Making with Real-Time Automation
From Event to Action: Accelerate Your Decision Making with Real-Time AutomationFrom Event to Action: Accelerate Your Decision Making with Real-Time Automation
From Event to Action: Accelerate Your Decision Making with Real-Time AutomationSafe Software
 
Factors to Consider When Choosing Accounts Payable Services Providers.pptx
Factors to Consider When Choosing Accounts Payable Services Providers.pptxFactors to Consider When Choosing Accounts Payable Services Providers.pptx
Factors to Consider When Choosing Accounts Payable Services Providers.pptxKatpro Technologies
 
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking MenDelhi Call girls
 
08448380779 Call Girls In Diplomatic Enclave Women Seeking Men
08448380779 Call Girls In Diplomatic Enclave Women Seeking Men08448380779 Call Girls In Diplomatic Enclave Women Seeking Men
08448380779 Call Girls In Diplomatic Enclave Women Seeking MenDelhi Call girls
 
A Domino Admins Adventures (Engage 2024)
A Domino Admins Adventures (Engage 2024)A Domino Admins Adventures (Engage 2024)
A Domino Admins Adventures (Engage 2024)Gabriella Davis
 
2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...Martijn de Jong
 
Axa Assurance Maroc - Insurer Innovation Award 2024
Axa Assurance Maroc - Insurer Innovation Award 2024Axa Assurance Maroc - Insurer Innovation Award 2024
Axa Assurance Maroc - Insurer Innovation Award 2024The Digital Insurer
 
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc
 
A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?Igalia
 
Understanding Discord NSFW Servers A Guide for Responsible Users.pdf
Understanding Discord NSFW Servers A Guide for Responsible Users.pdfUnderstanding Discord NSFW Servers A Guide for Responsible Users.pdf
Understanding Discord NSFW Servers A Guide for Responsible Users.pdfUK Journal
 
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...Neo4j
 
The Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxThe Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxMalak Abu Hammad
 
08448380779 Call Girls In Friends Colony Women Seeking Men
08448380779 Call Girls In Friends Colony Women Seeking Men08448380779 Call Girls In Friends Colony Women Seeking Men
08448380779 Call Girls In Friends Colony Women Seeking MenDelhi Call girls
 
Boost PC performance: How more available memory can improve productivity
Boost PC performance: How more available memory can improve productivityBoost PC performance: How more available memory can improve productivity
Boost PC performance: How more available memory can improve productivityPrincipled Technologies
 

Recently uploaded (20)

08448380779 Call Girls In Civil Lines Women Seeking Men
08448380779 Call Girls In Civil Lines Women Seeking Men08448380779 Call Girls In Civil Lines Women Seeking Men
08448380779 Call Girls In Civil Lines Women Seeking Men
 
Slack Application Development 101 Slides
Slack Application Development 101 SlidesSlack Application Development 101 Slides
Slack Application Development 101 Slides
 
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...
Raspberry Pi 5: Challenges and Solutions in Bringing up an OpenGL/Vulkan Driv...
 
Presentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreterPresentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreter
 
Histor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slideHistor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slide
 
Advantages of Hiring UIUX Design Service Providers for Your Business
Advantages of Hiring UIUX Design Service Providers for Your BusinessAdvantages of Hiring UIUX Design Service Providers for Your Business
Advantages of Hiring UIUX Design Service Providers for Your Business
 
From Event to Action: Accelerate Your Decision Making with Real-Time Automation
From Event to Action: Accelerate Your Decision Making with Real-Time AutomationFrom Event to Action: Accelerate Your Decision Making with Real-Time Automation
From Event to Action: Accelerate Your Decision Making with Real-Time Automation
 
Factors to Consider When Choosing Accounts Payable Services Providers.pptx
Factors to Consider When Choosing Accounts Payable Services Providers.pptxFactors to Consider When Choosing Accounts Payable Services Providers.pptx
Factors to Consider When Choosing Accounts Payable Services Providers.pptx
 
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
 
08448380779 Call Girls In Diplomatic Enclave Women Seeking Men
08448380779 Call Girls In Diplomatic Enclave Women Seeking Men08448380779 Call Girls In Diplomatic Enclave Women Seeking Men
08448380779 Call Girls In Diplomatic Enclave Women Seeking Men
 
A Domino Admins Adventures (Engage 2024)
A Domino Admins Adventures (Engage 2024)A Domino Admins Adventures (Engage 2024)
A Domino Admins Adventures (Engage 2024)
 
2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...
 
Axa Assurance Maroc - Insurer Innovation Award 2024
Axa Assurance Maroc - Insurer Innovation Award 2024Axa Assurance Maroc - Insurer Innovation Award 2024
Axa Assurance Maroc - Insurer Innovation Award 2024
 
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
 
A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?
 
Understanding Discord NSFW Servers A Guide for Responsible Users.pdf
Understanding Discord NSFW Servers A Guide for Responsible Users.pdfUnderstanding Discord NSFW Servers A Guide for Responsible Users.pdf
Understanding Discord NSFW Servers A Guide for Responsible Users.pdf
 
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
 
The Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxThe Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptx
 
08448380779 Call Girls In Friends Colony Women Seeking Men
08448380779 Call Girls In Friends Colony Women Seeking Men08448380779 Call Girls In Friends Colony Women Seeking Men
08448380779 Call Girls In Friends Colony Women Seeking Men
 
Boost PC performance: How more available memory can improve productivity
Boost PC performance: How more available memory can improve productivityBoost PC performance: How more available memory can improve productivity
Boost PC performance: How more available memory can improve productivity
 

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

  • 1. BLUE OCEAN PLANNING & EXECUTION 8 Tools for Redesigning Business Models & Making Better Decisions Dr. Rod King rodkuhnking@sbcglobal.net & http://businessmodels.ning.com http://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 • To Exponentially Increase the Value Quotient for Core, Peripheral, and Remote Customers As Well As Non-customers • To Swim Out of the ‘Red Ocean’ and Make the Competition Irrelevant • To Significantly Deliver More Value for Customers’ Jobs • To Facilitate Mergers and Acquisitions • To Respond to Competitive Pressures Including Commoditization • To Take Advantage of Emerging Opportunities and Technology • To Capture Greater Value (Profit) in the Value Chain and Network • 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
  • 3. HIGHLY SUCCESSFUL REDESIGNS OF CONVENTIONAL BUSINESS MODELS Businesses With High Value Quotient (VQ) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 4. WHAT IS THE VALUE QUOTIENT? A Universal Metric of Success Ideal VQ Strategy Everyone to continuously maximize benefit while minimizing cost throughout the value chain + - Note Value Quotient = Advantage/Disadvantage = Benefit/Cost = Strength/Weakness = Opportunity/Threat = Reward/Risk = Positives/Negatives = Delight/Pain = Good/Bad Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 5. CUSTOMER JOBS COMPASS: What Jobs Must You Facilitate or Do In a Hierarchy of Customer Needs or ‘Jobs’? Google Search Customer Jobs Compass for ELEMENTS OF LONG TERM-BUSINESS MODEL: Google Search & Facebook (for Developing Tools to Make Customers Happier As Well As for Determining What ‘Jobs’ or Niche(s) of Total Happiness to Focus on) Long-term Competitive Advantage Scenarios • Increase performance of/develop/acquire software applications that customers hire to do Physical 'Job' ‘Physical Jobs’ 10 • Increase performance of/develop/acquire software applications that customers hire to do 8 ‘Emotional/Social Jobs’ 6 • Increase performance of/develop/acquire software applications that customers hire to do 4 ‘Intellectual Jobs’ • (Increase performance of/develop/acquire 2 software applications that customers hire to do Spiritual 'Job' 0 Emotional/Social 'Job' ‘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 Intellectual 'Job' 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 = Ideal Software (Tool/Internet) Google Search Facebook ‘Perfect 10’ Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 6. 8 Tools for Redesigning Business Models & Making Better Decisions BLUE OCEAN MAP: Global View BLUE OCEAN RADAR: 200,000ft BOND: 100,000ft • Illustration of Current and Desired • Illustration of Ideal Business Result Ways to Reduce Obstacles to Goal: Positions of You & Your Competitors • Illustration of “Cost vs. Benefit” • Facilitation of Decision-making • Illustration of IVQ and Market Seg- Trade-offs (Contradictions) & Trends • Visualization of Strategy ments Including Red and Blue Oceans • Basic Elements of Value Quotient • Modeling and Testing of Strategy BLUE OCEAN COMPASS: 60,000ft STRATEGY RADAR: 40,000ft • Visualization of Shape as well as TOOLS FOR REDESIGNING • Illustration of Detailed Shape of Trends of Competing, Desired, and BUSINESS MODELS & Competing, Desired, and Ideal Ideal Business Results (Models) MAKING BETTER DECSIONS Business Results (Models) • Design of Value Proposition VISIONARY PLAN: Strategic View IDEAL VALUE CHAIN: Tactical View WHEEL OF OBSTACLES • Elements and Resources for • Visualization of Ideal Value Chain • Illustration of Internal Obstacles Pursuing Goal of Ideal Value Quotient (Business Model) for IVQ Strategy and Constraints to Achieving the (Blue Ocean), Achieving Blue Ocean • Flows of Information (Cost and Ideal Value Quotient for the Value Plan, and Totally Engaging Employees Revenue) & Resources Within a Chain or Business Model and Other Stakeholders Value Chain or Business Model Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 7. 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 ∞ BLUE OCEAN Value Google Search Quotient (VQ) Highly differentiated and premium-priced/free value chain Blue Ocean Plan (+): DELIGHT RED OCEAN * “Me Too” Search Engine Strategic Lowly differentiated and Choice Red Ocean Plan low-cost value chain (Uncontested Experience, Market Space, or New Category) (-): PAIN No. of Competitors Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 8. BLUE OCEAN RADAR: 200,000ft View of the Value Quotient for Comparing, Evaluating, and Redesigning Business Models As Well As Products and Services BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs (Revenue) Ideal Value Quotient(Blue Ocean) Object/Core Job: ………………………………..……. 10 (cf. Goal of IVQ to Moore’s Law & 8 Desired VQ = 8/2= “Singularity”) 4 6 4 2 Existing VQ = 2/6= 0.33 < 1 0 (Free) 0 2 4 COST 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 9. 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” BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs for Computing Power (Transistors) Ideal Value Quotient (Blue Ocean or “Singularity”) Object/Core Job: Integrated Circuit Board 10 (cf. Goal of IVQ to Moore’s Law & 8 “Singularity”) VQ = 8/1= 8 6 4 VQ = 4/1= 4 2 VQ = 2/1= 2 0 (Free) COST 0 2 4 (Size) 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 10. 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” BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Computing (Performance) Ideal Value Quotient (INTERNET or “Singularity”) Object/Core Job: Computer/Storage Devices 10 IVQ –Problem Solving Look within and across 8 industries as well as in nature for similar or analogous resolution of trade-off 6 4 2 0 (Free) COST 0 2 4 (Size) 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 11. 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” BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Transportation (Speed) Ideal Value Quotient (LIGHT or Blue Ocean) Object/Core Job: Vehicles 10 IVQ –Problem Solving Look within and across 8 industries as well as in nature for similar or analogous resolution of trade-off 6 4 2 0 (Free) COST 0 2 4 (Size) 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 12. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction” BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Information Processing (Amt of Info) Ideal Value Quotient (Blue Ocean or “Infinite Genius”) Object/Core Job: Linear Page 10 IVQ –Problem Solving Look within and across 8 industries as well as in nature for similar or analogous resolution of trade-off 6 4 2 0 (Free) COST 0 2 4 (Processing Time) 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 13. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction” BENEFIT Blue Ocean Radar Showing “Cost vs. Benefit” Trade-offs in Production (Quality) Ideal Value Quotient (Blue Ocean or “Singularity”) Object/Core Job: Vehicles 10 IVQ –Problem Solving Look within and across 8 industries as well as in nature for similar or analogous resolution of trade-off 6 4 2 0 (Free) COST 0 2 4 6 8 10 Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Revenue to Cost Ratio = Slope of Value Quotient Line 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
  • 14. Blue Ocean Network Diagram (BOND) for Quickly Making Better Decisions, Goals, and Strategies in Business (Projects) “Exponentially increase the BENEFIT business’s Value Quotient (= Benefit/Cost)” Quality 24x7 Personalization/ CUSTOMERS COST (Price) Customization (Sales/Revenue) Business Action … Differentiation (Simplicity/Brand/ Novelty) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 15. Blue Ocean Network Diagram (BOND) for Visualizing Blue Ocean Goals & Strategy: Case of Google Search “Exponentially increase the BENEFIT business’s Value Quotient (= Benefit/Cost)” Quality (Speed): INCREASE 24x7 Personalization: CUSTOMERS COST (Price): INCREASE (Sales/Revenue) REDUCE Business Action … Differentiation (Simplicity/Brand): INCREASE Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 16. 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 + + CUSTOMERS Personalization/ + - COST (Price) Customization (Sales/Revenue) + + + + - + + Business Action … Differentiation + (Simplicity/Brand/ + Novelty) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 17. Blue Ocean Network Diagram (BOND) for Scoring Elements of the Value Quotient for a Business (Project) BENEFIT Quality: (1-10) 24x7 Personalization: CUSTOMERS COST (Price): (1-10) (Sales/Revenue) (1-10) Business Action … Differentiation (Simplicity/Brand): (1-10) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 18. How to Quickly Develop an IVQ Strategy and Value Quotient 1. Obtain, from customer interviews or questionnaires, scores for the existing performance of each element or “value quotient factor” 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) • Cost: (1-10) • Differentiation: (1-10) • Personalization (Customization): (1-10) 2. 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. 3. Explore scenarios for desired or future profiles that are strongly differentiated from “Red Ocean” profiles as well as lie closer to the “ideal” Blue Ocean. 4. 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
  • 19. BLUE OCEAN COMPASS: 60,000ft View of the Value Quotient Google Search Blue Ocean Compass for 4 ELEMENTS OF BUSINESS MODEL: “Me Too” Search Engine and Google Search Competitive Advantage Strategies • Increase quality (speed) to level 9 (for Generally Redesigning a Business Model & Value Proposition) • Maintain cost at free: level 1 • Increase differentiation (simplicity/relevance/ brand/novelty) to level 8 Quality (Speed) • Increase on-demand; 24x7/(personalization; 10 customization) services to level 8 8 Value Propositions (Innovative Processes) 6 • Higher quality (speed) and greater simplicity • Higher differentiation (simplicity/relevance/ 4 brand/novelty) at no additional cost • Higher 24x7 personalization (for advertisers/ 2 affiliates: AdWords; AdRank; AdSense) On-demand; 24x7 0 Cost (Price) (Personalization) Targeted Customer Segments (Niches) • Students/Researchers/Internet Users who directly and quickly want information • Early adopter/innovator; Non-customers • Low cost-Advertisers • Website Owners/Content Providers Value Quotient (VQ) Differentiation • Benefit = Quality + Differentiation + (Simplicity/Relevance) Personalization = (9 + 8 + 8)/3 = 25/3 = 8.3 • Cost = 1 • Value Quotient (VQ) = 8.3/1 = 8.3 Ideal Business Result Google Search "Me Too" Search Engine Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 20. STRATEGY RADAR: 40,000ft View of the Value Quotient Southwest Airlines Strategy Radar for 4 ELEMENTS OF BUSINESS MODEL: the Average Airline and Southwest Airlines Competitive Advantage Strategies Quality (Q) (for More Specifically Redesigning a Business Model & Value Proposition) • Increase speed to level 9 Cost ( C ) • Reduce ticket price to level 1.3 Speed (Q) Differentiation (D) 10 • Reduce lounges to level 1.2 • Reduce meals to level 2.1 8 • Increase friendly service to level 8.8 6 Personalization (P) Seating Choice (P) Price ( C ) • Reduce personalization to level 1 4 Value Propositions (Innovative Processes) 2 • Higher speed at lower cost 0 • Friendlier service at lower cost Targeted Customer Segments (Niches) • Frequent/Low-cost traveler • Early adopter/innovator; Non-customers Friendly Service (D) Lounges (D) Value Quotient (VQ) • Benefit = Quality + Differentiation + Customization = (9 + 1.2 + 2.1 + 8.8 + 1)/5 = Meals (D) 22.1/5 = 4.42 • Cost = 1.3 • Value Quotient (VQ) = 4.52/1.3 = 3.4 Ideal Business Result Southwest Airlines Average Airline Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 21. BLUE OCEAN PLAN: Strategic View of the Business for Facilitating IVQ Strategy Execution, Organizational Alignment, and Total Employee Engagement COMPANY BACKGROUND INDUSTRY/BUSINESS PRODUCTS/SERVICES • Location: Mountain View, California • Industry: Computer (Software); • Internet Search Engine: Google Search • Founder(s): Sergey Brin; Larry Page Advertising • Online Bidding Platform: Adwords • Revenue: US$21.79 billion (2008) • Niche: Internet Search; Online Ads • Online Syndicated Ads: Adsense • No. of Direct Competitors: • Model: Business to Consumer (B2C); • Complementary Apps: Maps, etc. Business to Business (B2B); Platform CUSTOMER VALUE PROPOSITION CUSTOMER BENEFITS/EXPERIENCE BLUE OCEAN PLAN FOR: • Uncluttered, fast, free, accurate search GOOGLE SEARCH • Simple interface/Easy to use engine results and experience • Fast, accurate, and relevant results • Monetization of web page/site • Free search service • Targeted, measurable, cost- • Unobtrusive ads; Site monetization effective, and relevant online advertising • Targeted ads based on page’s content MAIN GOAL/OBJECTIVE/STRATEGY VISION (“Future Headline”) MISSION/CORE VALUES Blue Ocean Plan for providing an • Search engine platform; Software-as-a- • “To organize the world's information unprecedented customer experience Service (platform) and make it universally accessible and • (See Blue Ocean Compass & Blue • Advertising platform useful” Ocean Map; Value Chain Model; Blue • Gateway to world’s knowledge-base • “Don’t Be Evil” Ocean Dashboard) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 22. Ideal Value Chain (Business Model): Tactical View “Perfect, Free, Simple, and Personalized (PFSP)” S: SUPPLIERS/MATERIALS E: EMPLOYEES/KNOWLEDGE ASSETS/ M: MACHINERY/EQUIPMENT/ CULTURE FACILITY • Computers • Highly Productive/Creative workers External • Servers • (Experienced) Management •Efficient Data Centers/Scalable • Other Items • Patented PageRank Algorithm Architecture/Server Farms • Android: Operating System • WiFi Infrastructure • Software Development Kits (SDK) • Satellite E: ENVIRONMENT GOOGLE’S VALUE CHAIN P: PROCESSES/STRATEGIES • Competitors: Yahoo; AOL; MSN; etc. (Business Model) • Procurement; HR Mngt; Operations • Non-customers/Non-consumers • Technology/R & D/Innovn/Production • Partners/Complementors • Marketing/Branding/PR/Sales • Investors/Board of Directors • Distribution/Logistics/Partnering • Gov./Community (Open Source)/Env. “PFSP” • Customer Service (Relationship Mngt) C: CUSTOMERS/CONSUMERS R: RETAILERS/DISTRIBUTORS/ O: OUTPUTS/PRODUCT/SERVICE CHANNELS • Web Users/Searchers: Desktop/Mobile • Website Owners • Google Search Engine/Search platform • Website Owners • Content Providers: Individuals/ • Bidding & Advertising Platform: • Advertisers - > Revenue Corporations (Portals) AdWords; AdSense; AdRank • Enterprises (Search) -> Revenue • Affiliates; Partners: OEMs; Browsers • Other Products/Apps such as Google • Software/API Developers Appliance KEY Revenue (Information Flow) Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain? Cost (Information Flow) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 23. Template for Ideal Value Chain (Business Model) Flows & Resources for “Perfect, Free, Simple, and Personalized (PFSP)” S: SUPPLIERS/MATERIALS E: EMPLOYEES/KNOWLEDGE ASSETS/ M: MACHINERY/EQUIPMENT/ CULTURE FACILITY E: ENVIRONMENT IDEAL VALUE CHAIN P: PROCESSES/STRATEGIES • Competitors (BUSINESS MODEL): • Procurement; HR Mngt; Operations • Non-customers/Non-consumers Flows & Resources - • Technology/R & D/Innovn/Production • Partners • Marketing/Branding/PR/Sales • Investors “Perfect, Free, Simple, and • Distribution/Logistics/Partnering • Gov./Community/Society/Environment Personalized” • Customer Service (Relationship Mngt) C: CUSTOMERS/CONSUMERS R: RETAILERS/DISTRIBUTORS/ O: OUTPUTS/PRODUCT/SERVICE CHANNELS/INTERFACE KEY Revenue (Information Flow) Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain? Cost (Information Flow) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 24. WHEEL OF OBSTACLES 3 Internal Obstacles to Realizing the Ideal Value Quotient (IVQ) or Blue Ocean AIG Denver Airport Poor Business Decisions Enron Alaska’s Road to Nowhere “Me Too” Search Engines Detroit Automakers WHEEL OF OBSTACLES Red Ocean Uninspiring (“Me Too”) Business Strategies Goals & & Models Targets Traditional Airlines Healthcare “Mom and Pop” Businesses Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 25. INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS & PURSUING THE IDEAL VALUE QUOTIENT (Achieving apparently impossible business goals, strategies, and value propositions) GENERAL PROCESSES EMPLOYEE PROCESSES MACHINERY/FACILITY PROCESSES • Vertical/Horizontal Integration • Specialization/IP Creation-Protection • Franchise/Leasing/Rental • Extension/Compression/Removal • Outsourcing/Sub-contracting/Agents • Localization/Substitution/Reversal • Open Collaboration/Long Tail (80-20) • ‘Star’ Performers/Top grading/Fun • Modularization/Standardization • Unbundling/De-integration/Bundling • Wisdom of the Crowd/Co-creation • Asymmetry/’Poka Yoke’/Nesting • Convergence/Standardization/Self-X • Cross-functional Teams/Downsizing • Attributes Interdependency ENVIRONMENT/SUPPLIER PROCESSES INNOVATIVE PROCESSES FOR DOMAIN-PROCESSES/FUNCTIONALITY • Partnering/Complementing/Feedback REDESIGNING BUSINESS • Digitalization/Idealization/Downsizing • Merging/(De)Centralizing/Integration MODELS & PURSUING THE • Virtualization/Customization/DIY/JIT • Networking/Volunteering/Recycling • Zero Defect/Lean/Six Sigma/Analytics • Convergence/(De)Regulation IDEAL VALUE QUOTENT • Automatic/Outsourcing/Scalability • Distributorship/Affiliates/Network • Restructuring/Inventive Principles CUSTOMER PROCESSES CHANNEL/WHOLESALERS PROCESSES PRODUCT/SERVICE PROCESSES • Segmentation/Direct Selling/Branding • Multiple Channels/Syndication/Chain • Product/Service-Platform/Package • Cross-subsidy/Hybridized Markets • Pyramid/Multi-level Markets/Wheel • Service-focus/Servicing/Upgrading • Subscription/Leasing/After Sale • Digitalization/Online/Word-of-mouth • Performance-based Pricing/Discounts • Auction/Co-creation/Collaboration • Distributorship/Affiliates/Network • Fixed product (shell) and recurring/ • Advertising/Freemium/Licensing • Advertising/Auction Platform/Partners replaceable/upgradeable component Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 26. 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 • 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 • 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 • Facilitates organizational alignment and engagement especially for employees; everyone is on the same page and using the same metrics • Provides simple framework for visualizing Blue Ocean Strategy and IVQ • Provides simple visual framework for modeling as well as reviewing business strategies, objectives, models, assumptions, trade-offs, and decisions • Provides transparency in the selection and weighting of “value quotient factors” or decision-making criteria for evaluating possible business choices • 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
  • 27. 4 Axioms of the Ideal Value Quotient (VQ) 1. Every object, which has sustainable growth, generally increases its Value Quotient (VQ) over time. Otherwise, the object declines and eventually dies. 2. 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. 3. 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. 4. Over time, a species 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
  • 28. Related Concepts of the Ideal Value Quotient (VQ) • Value Quotient (Value Engineering) • Ideal Final Result (IFR); Ideality (TRIZ); SWOT Analysis (Business Planning) • Benefit/Cost Ratio; Revenue to Cost Ratio (Financial Planning) • Moore’s Law (Gordon Moore); Law of Accelerating Returns; Singularity (Ray Kurzweil) • Disruptive Innovation (Clayton Christensen) • Decision Theory: Rationality; Optimality; Satisficing Behavior (Economics) • Invisible Hand; Market Forces (Economics); 80-20 Rule (Vilfredo Pareto) • Theory of Evolution (Charles Darwin) Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 29. 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
  • 30. Space-Time Template for the Evolution of a System For Facilitating the Making of Scenarios (for Business/Product) in Space and Time Environment (Supersystem) PRESENT SYSTEM: SPACE System Elements INITIAL ELEMENT Past Present Future (“SEED”) TIME Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
  • 31. REFERENCES 1. Battelle, J. (2005) The Search. New York: Portfolio. 2. Chesbrough, H. (2006) Open Business Models. Boston: Harvard Business School (HBS) Press. 3. Christensen, C.; Raynor, M.E. (2003) The Innovator’s Solution. Boston: Harvard Business School (HBS) Press. 4. Jarvis, J. (2009) What Would Google Do?. New York: HarperCollins. 5. Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press. 6. King, R. (2009) The Infinitely Zoomable Pagelet: How Knowledge Workers Can Overcome Information Overload in Multi-disciplinary Teams, Projects, and On The Internet. 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

Editor's Notes

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