Blue Ocean and Co Creation Conference english

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  • 1. Blue  Ocean  Strategy   The  New  Paradigm  in  Innova2on   Patricio  Guitart  January  2012,  Barcelona,  Spain   Professor,  Management  and  Control  Systems   IAE  Business  School   www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 2. What’s  Going  On?  www.patricioguitart.com.ar   pguitart@iae.edu.ar   ©  2010  tantum        |      
  • 3. The  Economic  Crisis  Created  a  New  Consumer   Educated Adapted:  AcHng  in  control.  Saving   in  expenses  such  as  vacaHons,   clothing  and  entertainment  but  do   Owner of Goods not  sacrifice  in  terms  of  food,   hygiene  and  personal  care.  Brands   are  now  funcHonal.   Unemployed or Overqualified Melancholic:  Behaving  erraHcally   His/Her and  dispersed.  They  want  to  purchasing power maintain  their  previous  consumpHon   paNerns.  They  do  not  sacrifice  any  decreased but not category  but  start  cuOng  off  his/her aspirations different  products  randomly.  They   hold  onto  the  brand  with  a  sense  of   idenHty  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 4. Changes  in  Post-­‐Crisis  ConsumpDon   SituaDon     Consequences   •  Consumers  “walk  more”.   •  Greater  channel  compeHHon   Convenience  now  is  a  lower   price   •  More  promoHonal  acHvity   •  More  raHonal.  Try  more.   •  Small  quality  manufacturers   Verified  quality  over  perceived   and  second  brands  had  their   quality   chance   •  ANempHng  to  maintain   •  Small  capacity  containers,   consumpHon  on  selected   returnable  and  cheaper.     products   •  Brands  that  adapted  kept   •  AppreciaHon  for  brands   their  sales  levels  and  grew   supporHng  them  in  the  crisis     exponenHally  aVer  the  crisis  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 5. The  World  Moves  Beyond  the  Crisis  
  • 6. The  ExpectaHon  Economy  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 7. The  ExpectaDon  Economy   •  The  ExpectaHon  Economy  is  an  economy  inhabited  by   experimented  and  well  informed  consumers,  with  a  long  list  of   high  expectaDons  that  they  apply  to  every  product,  service  or   experience  offered  to  them.     •  Their  expectaHons  are  based  in  many  years  of  “self-­‐training”   under  the  hyper  consumerism  years  and  in  all  the  available   informaHon  sources  that  help  them  to  know  and  expect  not   only  the  basic  quality  standards,  but  the  “best  of  the  best”     What  are  the  consequences?  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 8. Indifference                              DissaHsfacHon  Decreasing  MarkeHng  ROI   Customer  saHsfacHon  declines  in  many   Industries   www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 9. CommodiDzaDon  www.patricioguitart.com.ar   pguitart@iae.edu.ar   ©  2010  SymneHcs        |         ©  2010  tantum     |
  • 10. CompeDon  without  Boundaries  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 11. Informed  and  connected  consumers.     Creators  of  their  own  markets  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 12. What  is  the  Blue  Ocean  Strategy?    www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 13. Before  that,  what  is  strategy?   According  to  Michael  Porter,  strategy   is:   – Means  to  realize  your  vision  and  mission   – A  unique  compeHHve  posiHon  as  a   company   – OpHons  and  alternaHves  in  front  of  the   compeHHon   – Strategy  tells  you  what  you  should  and   shouldn’t  do     Strategy  describes  the  way  the   organizaHon  will  CREATE  VALUE   Source  :  Michael  E.  Porter,  “What’s  Strategy?”  Harvard  Business  Review,  Nov–Dec  1996  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 14. Strategic  PosiDoning  …  Generic…   ü   Wal-­‐Mart   ü   Apple   ü   Dell   ü   Mercedes   ü   McDonalds   ü   Intel   ü   IBM   ü   MicrosoR   ü Goldman  Sachs   ü   eBay   ü   Mobil   ü   Mastercard  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 15. What  do  innovaDve  companies  do  differently?  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 16. They  discover  new  unexplored  market  spaces   Industry  A   ?   ?   Industry  B   Industry  C   Source:    Kim  &  Mauborgne  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 17. How  do  you  discover  a  new  value  curve?     Increase   Which  aNributes  could   be  increased  over  the   industry  standard?   Eliminate   Create   Which  aNributes  that   New  Value   Which  aNributes  could  be   the  industry  is  not   appreciaHng  can  be   Curve   created  that  the  industry   has  never  offered?   eliminated?   Reduce   Which  aNributes  could  be   decreased  below  the   industry  standard?  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 18. The  Concept  of  Value  InnovaDon   Costs  savings  through   Costs   Eliminate  and  Reduce   Value   Advantages  due  to  large   InnovaHon   volumes   Superior  value  from  Create   and  Increase   Shopper  Value   copyright  Kim  &  Mauborgne  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 19. Yellow  Tail  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 20. The  Australian  Yellow  Tail  Wines  in  the  American  Market    High Consumer  view   5 Premium  Wines   Yellow  Tail   4 Level of Offer 3 Budget  Wines   2 1 Low Price Use of enological Image Aging Vineyard Wine Easy Ease of Fun and Wine terminology and quality prestige and range drinking selection adventure complexity distinctions in legacy wine communication Attributes of product, service and delivery www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 21. Eliminate-­‐Reduce-­‐Raise-­‐Create  Matrix   ELIMINATE   RAISE     •  Enological  terminology  and  disHncHons   •  Price  versus  budget  wines   •  Aging  qualiHes   •  Retail  store  involment   •  Above-­‐the-­‐line  markeHng       CREATE     REDUCE     •  Wine  complexity   •                                         Easy  drinking   •  Wine  range   •  Ease  of  selecHon   •  Vineyard  presHge   •  Fun  and  adventure    www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 22. Analyzing  six  paths  as  innovaDon  sources   1.  Through   subsHtute  industries   6.  Trends  over   Hme   2.  From   strategic   groups   5.  By  funcHonal  and   emoHonal  connecHons   3.  From  the   shopper  chain   4.  Through   complementary   copyright  Kim  &  Mauborgne   offerings  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 23. INCA  Paints  Case   •  Leader  in  market  share  and  yop  of  mind  in  the  wall  paints  sector  in   Uruguay.   •  Part  of  a  mulHnaHonal  company  that  enables  best  pracHces  in  innovaHon,   operaHons  and  management.   •  Well  developed  capabiliHes  in  product  innovaHon  on  a  regional  basis.   •  There  challenge  was  to  innovate  in  a  mature  and   impoverished  market  with  increasing  compe22on  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 24. SubsDtutes   Paper   Smooth  Cement   Clean  www.patricioguitart.com.ar   PracDcal   pguitart@iae.edu.ar  
  • 25. Strategic  Groups   “Wedding  Planner”   Comprehensive   Guidance  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 26. Shoppers  Value  Chain   The Painter’s Design Advice Happiness Pill www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 27. Complementary  Offering  www.patricioguitart.com.ar   The Dust Sucker pguitart@iae.edu.ar  
  • 28. FuncDonal  -­‐  EmoDonal  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 29. Time  /  Trends  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 30. ATRIBUTOS NIVEL DEL ATRIBUTO COMPETITIVOS 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 Accesibilidad Geográfica Calidad (Cob, Dur,Lav,Etc) INCA New INCA Hoy Confianza/Garantía/Respaldo www.patricioguitart.com.ar   Precio Calidad de Entrega Asesoramiento Integral Al Alcance De Todos Capacitacion Integral Comunicaciones Personalizada Fidelización del Pintor Soluciones Especificas A NUEVA CURVA DE VALOR INCA Través Del Producto Rentabilidad Al Indirecto Servicios De Color Final  Value  Curve  for  INCA  Paints   Accesibilidad Economica Pintar es atractivo Proceso Fácil y Limpiopguitart@iae.edu.ar  
  • 31. InnovaDon  IniDaDves   Before   Space  at  the   Point  of  Sale   “We  work  with  all  Firm  XYZ  por<olio:  interior,  exterior,   ARer   decoraAves,  water  repelents,  enamels  and  more.   We  have  a  colorful  space  designed  thinking  of  your  comfort   where  you  can  select  from  our  paleFe  (XYZ  Color  Service)  to   decorate  your  home.   Besides,  if  you  bring  a  digital  picture  of  the  room  or  rooms   that  plan  to  paint,  we  can  advice  you  on  color  selecAon   thorugh  the  ROOM  COLOR  SIMULATOR  of  XYZ  COLOR   SERVICE.   Specialized  staff  trained  by  XYZ  will  be  with  you  along  the   way.”  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 32. Results   •  Closer  understanding  by  non-­‐commercial  areas  of  the  company  to   customers,  distributors  and  final  shoppers   •  Discovering  the  gap  between  internal  percepHons  and  market  realiHes   related  to  consumer  preferences   •  New  paradigm  for  the  company  from  being  product  oriented  to  improving   customer  experiences   •  AddiHon  of  new  aNributes  and  innovaHve  aNributes  to  INCA  paints  value   proposiHon   •  Renewed  sense  of  urgency  to  change  current  markeHng  and  communicaHon   strategy   They  were  focused  on  innova2ng  on  new  paints  when   the  consumer  wanted  solu2ons  to  improve  the  before-­‐ and-­‐aFer  the  pain2ng  process  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 33. What  is  Value  Co-­‐CreaDon?    www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 34. Today,  customers  are  very  acDve,  informed  and  connected   Product & Service Offerings The Marketing Suppliers Firm Channels SCM ERP CRM Firm Customer www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 35. Co-­‐CreaDon  of  Experiences  with  Customers  and  Consumers   Greater Value Differentiated to Firm Experience to Customers EXPERIENCE Lower Cost to Lower Cost to Firm Customer Customer/ Firm Consumer Experience Environment www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 36. Principles  of  Experience  Co-­‐CreaDon   How can we grant access to all How can we engage individuals in required information? significant conversations? Access Dialog Risk Management Transparency How can we reduce risk How can we reduce the for both parties? opacity of the current process?www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 37. Nike Casewww.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 38. The  tradiDonal  shoe  maker  considers  that  value  is  generated   along  the  whole  value  chain   Shoe Shopper (passive) Processes of a traditional shoe manufacturer Shoe Manufacturing Store Shoe Design Sales Manufacturer Marketing Store Distribution Supply 39 www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 39. But  runners  have  their  own  value  chain   Runner (customer) Define Recording Setting ExchangingLooking for Buying Running Listening own distances improvement Running advice with outfits outfits alone music routes and times goals in groups colleagues Runner Processes 40 www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 40. Customers  and  NIKE  have  few  overlapping  processes   41www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 41. Co-­‐CreaDng  Outside-­‐In   How can we create corporate processes that impact customers’ processes? 42www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 42. NIKE  let  runners  co-­‐create  their  own  experience  from  the   “outside  in”   43www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 43. Record  of  Runs   44www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 44. Challenge  others   vramaswamy@eccpartnership.com 45www.patricioguitart.com.ar   fgouillart@eccpartnership.com pguitart@iae.edu.ar  
  • 45. Map  and  share  routes   46www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 46. Co-­‐CreaDng  Inside-­‐Out   How can we make corporate processes transparent to our customers? 47www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 47. Nike  iD  –  Personalized  Running  Shoes   48www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 48. Establish  the  customizaDon  process   49www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 49. Save  Individual  Designs   50www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 50. Toilet  Paper  Case  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 51. Shopper  Value  Chain  
  • 52. SubsDtutes  
  • 53. Time  /  Trends   GeneraDon   Z  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 54. www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 55. www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 56. What  do  we  need  to  innovate?   Employees with innovation tools Capabilities to execute Employees motivated to innovate www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 57. Features  of  a  Good  Blue  Ocean  Strategy   FOCUSED   ORIGINAL   SIMPLE  MESSAGE  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 58. Welcome  to  the  Blue  Ocean   World  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 59. Blue  Ocean  Strategy  References   Renée  Mauborgne  is  one  of  the  world’s  preeminent  experts  on  business  strategy,  innovaHon  and  wealth  creaHon   in  the  knowledge  economy.      Renée  is  a  very  impressive  presenter—engaging,  energeHc  and  intelligent,  with  substanHve  material  that  can   significantly  impact  your  organizaHon’s  performance.  She  is  the  highest  placed  woman  on  Thinkers  50,  the  global   ranking  of  business  gurus.  In  2007,  2009  and  again  in  2011,  Thinkers  50  placed  Mauborgne  among  the  top  ten   most  influenHal  business  thinkers  in  the  world.   Her  book,  Blue  Ocean  Strategy:  How  to  Create  Uncontested  Market  Space  and  Make  the  CompeHHon  Irrelevant   (Chan  Kim,  coauthor),  is  an  internaHonal  bestseller.  Blue  Ocean  Strategy  has  sold  over  two  million  copies  and  is   being  published  in  41  languages,  breaking  Harvard  Business  Press’s  historical  record  of  most  foreign  language   translaHons  ever  achieved.   Blue  Ocean  Strategy  won  the  Best  Business  Book  of  2005  Prize  at  the  Frankfurt  Book  Fair  and  was  selected  as  the   number  one  Strategy  Gook  of  2005  by  Strategy  +  Business  and  as  a  Top  Ten  Business  Book  of  2005  by   Amazon.com.       With  Blue  Ocean  Strategy,  Renée  brings  business  audiences  a  genuinely  important  breakthrough  in  strategic   business  thinking,  which  is  changing  the  business  lexicon  across  the  globe.   Renée  Mauborgne  is  The  DisHnguished  Fellow  and  a  professor  of  Strategy  and  Management  at  INSEAD  in   Fontainebleau,  France,  the  worlds  second  largest  business  school.  She  is  Co-­‐Founder  and  Co-­‐Director  of  the   INSEAD  Blue  Ocean  Strategy  InsHtute  and  is  a  Fellow  of  the  World  Economic  Forum.   Her  Harvard  Business  Review  arHcles,  coauthored  with  W.  Chan  Kim,  are  worldwide  bestsellers  and  have  sold   more  than  half  a  million  reprints.  Their  "Value  InnovaHon"  and  "Fair  Process"  arHcles  were  selected  as  among  the   best  classic  arHcles  ever  published  in  HBR.  She  has  published  numerous  arHcles  on  strategy  and  managing  the   mulHnaHonal  corporaHon  in  a  host  of  other  first-­‐Her  business  journals.       Mauborgne  has  received  a  number  of  presHgious  awards  for  her  contribuHons  to  business  thought  leadership  and   has  been  widely  praised  in  the  internaHonal  business  media.  www.patricioguitart.com.ar   pguitart@iae.edu.ar  
  • 60. Value  Co-­‐CreaDon  References   Francis  Gouillart  is  President  and  one  of  the  two  founders  of  the  Experience  Co-­‐CreaHon  Partnership  (ECC   Partnership),  a  consulHng  firm  built  to  implement  co-­‐creaHve  management  processes  and  organizaHonal   capabiliHes  with  corporate  clients  around  the  world.     Francis  is  co-­‐author,  with  Venkat  Ramaswamy,  of  the  newly  published  book  The  Power  of  Co-­‐CreaHon:  Build  It   with  Them  to  Boost  Growth,  ProducHvity,  and  Profits  (Simon  &  Schuster  Free  Press,  October  2010)  and  the   Harvard  Business  Review  arHcle  “Building  the  Co-­‐CreaHve  Enterprise”  (October  2010).  He  previously  co-­‐ authored  (with  James  Kelly)  the  book  Transforming  the  OrganizaHon  (McGraw-­‐Hill),  which  reached  the  top  of   BusinessWeek’s  best-­‐seller  list  in  1995.  He  is  also  co-­‐author  (with  Frederick  Sturdivant)  of  the  arHcle  “Spend  a  Day   in  the  Life  of  Your  Customers,“  published  by  Harvard  Business  Review  (January-­‐February  1994).  He  also   authored  Stratégie  pour  une  Entreprise  CompéHHve  (EdiHons  Economica,  Paris),  which  was  named  “Best  Strategy   Book  of  the  Year”  by  the  French  AssociaHon  of  Strategic  Planners  (AFPLANE)  in  1989.     Francis  is  considered  a  leading  authority  on  the  topics  of  strategy,  innovaHon,  transformaHon,  and  capabiliHes-­‐ building  and  is  a  recognized  speaker,  lecturer,  and  advisor  on  Experience  Co-­‐CreaHon,  Blue  Ocean  Strategy,  and   OrganizaHonal  TransformaHon.  He  works  across  the  United  States,  Europe,  and  Asia,  and  has  experience  in  most   industries.  Francis  has  been  quoted  in  the  Wall  Street  Journal,  BusinessWeek,  and  Fortune,  among  other   publicaHons,  and  has  been  featured  on  CNBC.  He  is  currently  working  with  global  management  consulHng   firm  PRTM  to  use  co-­‐creaHon  concepts  and  methods  to  transform  enterprise  operaHons  and  business  models   across  industries  globally.     Francis  received  his  MBA  from  the  University  of  Chicago’s  Graduate  School  of  Business,  and  resides  in  Concord,   MassachuseNs.  www.patricioguitart.com.ar   pguitart@iae.edu.ar