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Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
Blue Ocean Strategy -Part 1
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Blue Ocean Strategy -Part 1

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Every thing you wanted to know about Blue Ocean Strategy with examples

Every thing you wanted to know about Blue Ocean Strategy with examples

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  • 1. Blue Ocean Strategy The science of making competition irrelevant
  • 2. What is blue ocean strategy about? • Based on the best selling books HBR press – translated in over 41 languages • It’s a culmination of a decade long study by Renee Mauborgne and Chan Kim , who studied over 150 strategic moves spanning more than 30 industries over 100 years (1880-2000) • BOS focuses on making competition irrelevant by creating uncontested marketspaces. • BOS covers both strategy formulation and strategy execution. • BOS offers a set of methodologies, tools and frameworks that makes it a structured, learnable system.
  • 3. Blue Ocean Strategy In Today’s webinar In the concluding part Search Risk 4 Actions framework Planning Risk 6 Paths Framework PMS Framework BUM Model BOS Tools & Framew orks Strategy Formula tion Scale Risk Business Model Risk Non Customer Analysis Strategy Executio n Organizatio nal Risk Manageme nt Risk
  • 4. The Color - Red and Blue
  • 5. A quick reality check of how red or blue your company is? Does your company feel that they are facing increasing competition from rivals? Does your company depend on offering deeper and deeper price discounts to make sales happen? Is your company increasing advertising and marketing spends every year, yet the impact of these efforts keeps falling? Is your company focusing on cost cutting and quality control at the expense of growth, innovation, and brand creation? Do people in your company blame slow economic and market conditions most of the time? Is your company seeing outsourcing and job cuts as a way to regain competitiveness and profitability? Does your company management sees mergers and acquisitions as one of the principal means to grow in future? Does your company think that it easier to follow competitors than to break away from them? Is your company now starting to worry that the marketplace has become crowded? Domestic , International , Small player, Large Player, MNC’s, basically scared of everybody if your answer to three or more questions is YES - You are in Red Ocean
  • 6. The Red Ocean • A Marketplace where companies compete with each other on a daily basis. • When companies compete, it becomes battle field for : • • • • Acquiring market shares Increasing revenues Maximization of profit by reducing costs and value Basically beating competition consumes most of the effort, time and resources • Such companies are called Red Ocean companies. Such companies fight for competitive advantage with two strategic weapons - Differentiation and Price
  • 7. Cost and Differentiation Dilemma But there can be only one price leader in an Industry And differentiation would mean higher cost. • More the differentiation – Higher the segmentation • Higher the segmentation – lower would be the market size.
  • 8. Also The Size Of The Market Pie Is Fixed i.e almost all the companies in an industry are competing for an increased slice of the same pie But the real objective of business is not fighting – its about creating profit and value
  • 9. “Skillful leaders win wars without any fighting” ------ Sun Tzu ‘ Art of War’
  • 10. Brief: Blue ocean strategy • Blue ocean strategy builds new businesses where none existed – – – • • • By tapping the untapped market space By creating demand Thereby making competition irrelevant Blue ocean strategy is about simultaneous pursuit of value innovation and low cost Value innovation is defined in terms of value/ utility for customer Blue ocean markets are usually more profitable than markets with head to head competitors Price Value innovation – simultaneous pursuit of high value & low cost Value/ product features Characteristics of a good Value innovation Strategy FOCUS: Not to diffuse efforts across all key factors of competition. DIVERGENCE: The shape of the value curve diverges from those of other players. Compelling Tag line : The value curve can be translated into a clear, strong, truthful and compelling TAGLINE.
  • 11. Red Ocean Vs. Blue Ocean Red Ocean Strategy Blue Ocean Strategy Compete in existing market space Create uncontested / New market space Beat the competition Make the competition irrelevant Create a value – cost trade off Break the value-cost trade off Competitive Advantage Value Innovation Segment existing customers Attract noncustomers Exploit existing demand Create and capture new demand
  • 12. How Do You Identify These Companies? Blue Ocean with ipod, iphone & ipad Blue ocean from prescription drug to lifestyle Blue ocean by making Music portable Blue Ocean in low cost travel Blue Ocean in Luxury Travel Blue ocean with making no frills barbershop Blue ocean in Search Blue Ocean by increasing Customer productivity Blue Ocean in Insulin market Blue Ocean through tipping point leadership Blue Ocean by looking across complimentary products Blue Ocean in coffee bars Blue Ocean in Apparels Blue Ocean by making copiers a desktop utility and not office equipment Blue Ocean in Gaming These are the companies that questioned the norms and boundaries set by the industry and seized their market shares without fighting with anyone!
  • 13. Lets Explore How These Companies Got There •Case Study 1: NETJETS •Case Study 2: Indochino.com •Case Study 3: Zynga Games •Case Study 4 : Khan Academy
  • 14. Six Path To Blue Ocean Strategy Conventional boundaries in a competitive marketplace Industry - industry size & dependencies Strategic groups – strategic groups i.e customer , vendors etc Buyer group- individual customer From competing within buying processes Scope of product: scope of adding Creating value across value with complementing products Functional/ emotional orientation of the industry: functionality vs. Blue ocean Strategy Emotional appeal tradeoff Time: value that an attribute might deliver tomorrow • Blue oceans can be created by exploring outside of industry boundaries • Break out of the traditional boundaries of the industry to unlock value • “out of the boundaries” thinking framework for unlocking value
  • 15. 6 PATHS: Exploration Outside of Traditional Boundaries Path 1 - Industry What are the alternative industries to your industry? Why do buyers trade across to them? NTT DoCoMo, Federal Express, Southwest Airlines, NetJets Path 2 – Strategic Group What are the strategic groups in your industry? Why do buyers trade up for the higher group, and why do they trade down for the lower one? Polo Ralph Lauren, Curves, Sony Walkman, Toyota Lexus Path 3 - Buyer Group What is the chain of buyers in your industry? Which buyer group does your industry typically focus on? If you shifted the buyer group of your industry, how can you unlock new value? Novo Nordisk, Bloomberg Terminals, Canon Copiers, Philips Alto Path 4 - Scope of product or service offering What is the context in which your product or service is used? What happens before, during, and after? Can you identify the pain points? How can you eliminate these pain points through a complementary product or service offering? Borders and Barnes & Noble, Dyson Vacuum Cleaners, Kinépolis Kiné-kids, Zenick Salick’s Cancer Centers Path 6 - Time What trends have a high probability of impacting your industry, are irreversible, and evolving in a clear trajectory? How will these trends impact your industry? Given this, how can you open up unprecedented customer utility? Apple Music, Cisco Systems, CNN, HBO’s “Sex and the City” Path 5 - Functional-emotional orientation of an industry Does your industry focus on functionality or emotional appeal? If you compete on emotional appeal, what elements can you strip out to make it functional? If you compete on functionality, what elements can be added to make it more emotional? Starbucks, QB House, Direct Line Group, Pfizer’s Viagra
  • 16. More Understanding Of The Frameworks & Tools Case Study - 1 • Introduction to Strategy Canvas • Introduction to 4 Actions framework
  • 17. World’s 2nd Largest airline! • Over 800 aircrafts • Over 6300 employees • 285000 flights annually •Flying across 170 countries and 2200 airports
  • 18. Strategic questions before NETJETS – How to enter into the aviation space when the market was dominated by the big airline groups? – 1983. The red ocean •Over 20 domestic and international airlines • All of them catering to similar customer groups – i.e. Business travelers, holiday travelers and casual travelers •Corporates – biggest strategic groups - spent millions on executive travel every year •All travelers – including executive travelers had to go through the long check ins, security checks, hectic flight transfers, congested airports, baggage claims …. •Business travelers only have the option of business class/ first class or corporate jet The blue ocean • Business travelers are the most frequent and regular flyers • NETJETS offered business travelers “ the convenience of a private jet at the price of a airline ticket” • NETJETS also provided fractional 1/16 ownership of the aircraft • NETJETS provided Private aircraft at 4 hours notice ( much less than flight booking) • NETJETS provided no hassles or responsibilities of aircraft maintenance • Customized in flight services – much better than business class or first class services NETJETS Converted a B2C industry into a B2B Industry
  • 19. The Strategy Canvas NETJETS High Business / 1st Class Travel Relevance Scale Medium Low Commercial Airline Industry Price Dead head Costs Hassle free Travel Time Savings/ Faster Travel Flexibility & Reliability Jet Ownership In Flight Service Attributes of Industry & Competitors NETJETS • • Commercial Airline Industry Business / 1st Class Travel The strategy canvas is the central diagnostic and action framework for building a compelling blue ocean strategy. The Strategy canvas serves two purposes: – – It captures the current state of play in the known market space. This allows you to know where you are viz competition It propels you to action by reorienting your focus: • From competitors to alternatives • From customers to non customers of the industry.
  • 20. The Four Actions Framework REDUCE Factors that should be well below the industry standard ELIMINATE Factors that the industry takes for granted and need to be eliminated CREATE Create A New Value Curve Factors that the industry has never created RAISE Factors that should be raised above the industry standard We use the four actions framework, to reconstruct buyer value elements in crafting a new value curve.
  • 21. Net Jets 4 Actions Framework Eliminate • Airport check ins, waiting time, baggage, transfers and other time losses for customer •The tiredness and hassles endured during a journey by the corporate traveler Reduced • Private jet buying, maintenance and administrative costs • Time for travelers – same distance now took half the time because there is no checking, boarding or baggage claim time • Other dead head costs : scheduling, ticketing, administrative or marketing costs Raised •Convenience, comfort & luxury •Customized in-flight services •Entire private jet for the user/s • Service standards • On time take off & arrival • Available on 4 hours notice Created •Fractional ownerships of plane • B2B industry when the entire industry was still B2C •Loyal customer base
  • 22. Case Study – 2: The Story of
  • 23. The Story is … • Heikal Gani needed a suit for an important presentation. He faced a major challenge. – Affordable suits didn't fit well or were not comfortable – Ones that fitted well were not of latest trend / design – One hardly has the time to go to a tailor to get a customized suit done – Designer suits of latest design & trend were too expensive There had to be a better way for men to find a great-fitting suit • World’s first self service virtual suit company • Customers can choose the fabric, design style and Results : accessories • Started in end of 2009 – have started averaging • Customers get customization of suits through the site • Customers measure themselves and provide fitting details through online video tutorial • Most suits priced under $500 ( Much lesser than designer sales of over 30,000 suits a year across 60 countries, with about 30 + employees • Student start up to a global brand in less than 2 year suites ) •Sales growth rate of over 200% every year • Suit tailoring in Shanghai’s network of tailors • A beeline of Venture Capitalist wanting to invest – • Delivery in two to three weeks – • If order is less than perfect, indochino pays for local tailoring or remake the suit free have already raised over 20 mn for operational expansion in Vancouver & Shanghai
  • 24. Creating the Blue Ocean Traditional apparel / suit companies Indochino.Com 1) Industry divided into five segments • Haute couture • Luxury • Affordable luxury • Mainstream • Discount 2) The traditional companies competed among each other on the following factors: • No of stores • Location of stores – premium stores – premium brand • Range or no of lines offered • Hi fashion vs customization vs price tradeoff 3) Marketing & brand reputation ( Top brands associated with designer labels) 4) High customization costs 1) Indochino.com does not compete in any of the segment 2) Indochino.com does not get affected by the industry factors 3) Indochino.com built its brand reputation by delivering value 4) Indochino.com outsources all suits to quality and reputed tailor network in shanghai - China Created and captured a new market demand
  • 25. Indochino.com 4 Actions Eliminate • Need to go to store • Store presence in hi end posh locations • Inventory and Store management costs • Separate costs for customization / tailor Reduced • Price • Delivery & customization hassles • Marketing costs • No of lines offered Raised • Customer satisfaction & Quality • Convenience / ease of shopping • Affordability of quality suits Created •Fully self service customization • 100% return policy
  • 26. The Strategy Canvas – Indochino.com Indo Chino High Medium Relevance Scale Low • • Price # of stores Location Marketing Indo Chino Lines Offered Quality Online Hi End – Designer Suits Customiz ation Ease of Shopping Return Policy Low End Suit Market Attributes of Industry & Competitors Indochino.com - expanded the market by making good quality suits affordable It used technology to make things simple, functional and to add value Self Service
  • 27. The Technology Trap Use of technology challenges the conventional systems & process. • But companies should not get carried away by the “technology” • Technology innovation is not necessarily value innovation for buyer / customer every time. – Because use of cutting edge technology does not mean cutting edge utility for the buyers – Unless technology makes buyers lives simpler The buyer utility map helps managers to : • Avoid the technology trap • Refine value innovation • Enables a birds eye view of buyer utility • Takes into account the buyer experience cycle and utility leavers
  • 28. Buyer Utility Map A buyer’s experience can usually be broken into a cycle of six stages, running more or less sequentially from purchase to disposal. Each stage encompasses a wide variety of specific experiences. At each stage, managers need to ask a set of questions to gauge the quality of buyer’s experience. Purchase •How long does it take to find the product you need? •Is the place of purchase attractive and accessible? •How secure is the transaction environment? •How rapidly can you make a purchase? Delivery Use •How long does it take to get the product delivered? •Does the product require training or assistance? •How difficult is it to unpack and install the new product? •Is the product easy to store when not in use? •Do buyers have to arrange delivery themselves? •How effective are the product’s features and functions? •Does the product or service deliver far more power or options than required by the average user? Is in overcharged with bells and whistles? Supplements Maintenance Disposal •Do you need other products and services to make this product work? •Does the product require external maintenance? •Does use of the product create waste items? •If so, how costly are they? •How much time do they take? •How easy are they to obtain? •How easy is it to maintain and upgrade the product? •How costly is maintenance? •How easy is it to dispose of the product? •Are there legal or environmental issues in disposing of the product safely? •How costly is disposal?
  • 29. Uncovering Blocks to Buyer Utility Uncovering blocks to buyer utility can identify the most compelling hot spots to unlock exceptional utility. By locating your proposed offering on the thirty-six space of the buyer utility map, you can clearly see how, and whether the new idea not only creates a different utility proposition from existing offerings but also removes the biggest blocks to utility that stand in the way of converting noncustomers into customers. Customer Productivity: In which stage are the biggest blocks to customer productivity? Simplicity: In which stages are the biggest blocks to simplicity? Convenience: In which stage are the biggest blocks to convenience? Risk: In which stage are the biggest blocks to reducing risks? Fun and Image: In which stage are the biggest blocks to fun and image? Environmental Friendliness: In which stage are the biggest blocks to environmental friendliness?
  • 30. The Buyer Utility Map – Indochino.com Buyer Experience from Decision to Disposal – (For Emerging Industries) Purchase Choosing a Store How Fast can the transaction be made? Secure Transaction Environment Utility Leavers Is it Productive for the buyer? Delivery Supplements Disposal Choosing a Suit ( Color, Style, & Fabric) Does the suit require tailoring Return Policy Getting Suit Delivered How Time consuming The Usage and Maintenance experience in this case remains constant / same for existing industry as well as blue oceans Does the buyer find it simple? Does the buyer find it Convenient? Does it reduce buyers' Risk Blocks in tradition al as well as new Utility Blocks in tradition al Buyer Utility Buying Experience • Buyer Utility Score – Lower than what is prevalent in the current industry • Therefore Indochino.com raised the Buyer Utility and Experience Blocks in New industry Buyer Utility
  • 31. Case Study - 3 • Introduction to three tiers of non customers
  • 32. The Story of Zynga • • • • Founded Zynga in April 2007 with a mission “Connect the world through games” Has over 3000 Employees and 270 million customers, 60 mn daily active users Largest Social games developer of Facebook Now provides games in multiple platforms like: – • • • • Facebook, Myspace, Android, ipad, iphone, yahoo & Farmville.com Successful IPO to raise up to $1 billion in an initial public offering on July 1, 2011; Valuation of over $7 billion Has made over 15 game studio acquisitions in last 2 years Generates over $1.16 billion in annual revenues in 2011 Zynga is approached billion dollars revenue after only four years. – Surpassing the market value of the longtime console game company EA Sports
  • 33. Creating the blue ocean Traditional Gaming Companies 1) Industry divided into four segments • Console based games • Online Games • Mobile Games & Flash Games 2) Console based games dominated the marketplace with 75% of the revenues. 3) The big four of the gaming dominated 95% of the console marketplace (sony, Nintendo, Xbox ..) 4) The Traditional gaming companies competed among each other on the following factors: • Consoles – Type speed, capabilities • No of titles in each genre • Speed of Title Release – weekly, monthly • Hi end real time graphics • Hi end accessories 5) Catered only to gamers – Teenage boys to professional gamers 6) Addictive and had lot of side effects – Too much violence, addiction, Lack of exercise, not mind stimulating 7) Parents usually do not recommend / Buy Zynga Zynga’s Farm Ville 1) Zynga did not compete in any of the segment or market player dominance 2) Zynga’s (Farm Ville) did not get affected by the industry factors 3) Zynga built its brand reputation by sharing and word of mouth connect 4) Zynga caterered to all – children, parents, professionals … 5) Zynga created a new genre of education / simulation games Created and captured a new market demand
  • 34. 4 Actions Framework - Zynga Eliminate Raise • Game consoles • High cost of playing games – free • Violence in games • Genere based games • Winner – loser syndrome Reduce • Graphics • Hi-end technology – leveraging facebook • Effort & time involved in playing games • Entry barriers for users •Marketing costs • Community & sharing qualities in games • Interactivity with friends • Creativity, education & learning quotient Create • New revenue models • no console or title based revenue • Partnerships & advertising based revenue • Games that makes friends
  • 35. The Strategy Canvas- Zynga (Farm Ville) High Medium Relevance Scale Low Consoles & Hardware Cost Time & Effort Violence Winner/ Loser Graphi cs Traditional Gaming Industry Attributes of Industry & Competitors Game Genere Marketin g Commun ity Educati on Sharing Zynga Creativity
  • 36. The Three Tiers of Non Customers Tier 3 Non Customers Tier 3 non customers: “unexplored” non customers who are in markets distant from yours. Tier 2 Non Customers Tier 2 non customers: refusing noncustomers who consciously choose against your market Tier 1 – Non Customers Tier 1 non customers : “soon-to-be” noncustomers who are on the edge of your market, waiting to jump ship Non Customers Managing the three tiers of Non customers Tier 1 non customers : Investigate un satisfaction Key commonalities across needs & desires E.G. PRET A MANGER- british fast food chain Tier 2 non customers: Eliminate access barriers Economic, functional, education, geographical Tier 3 non customers: Remove long held assumption on customer needs & behavior
  • 37. How Did Zynga Attract Non Customers? Tier 1 Non-Customers Audience Non Regular players – young boys & girls bored out of traditional games Tier 2 Non-Customers Casual Players - working men/ women not enough time to play Change 1 Changed genres completely – from shooting, arcade, racing, to simulation Cost of acquisition – free Change 2 Made social networking fun and more exciting Eliminated hassles of consoles, game titles, accessories, hardware & setups Fun lasts longer, with reduced time and effort Non serious casual play to relax / unwind Results Tier 3 Non –Customers Non Player Parents- women/ housewives Removed violence Play with friends and family – not necessarily together / real time No winner – no loser • Zynga looked across non customers and attracted new buyer groups to create an industry that did not exist earlier • Zynga also capitalized on the ongoing trends of Social media to mount its games offering to provide an unprecedented customer utility
  • 38. Case Study - 4 • Introduction to PMS maps
  • 39. The Story of Khan Academy • • The Khan academy is a non-profit educational organization created in 2006 by salman khan- A MIT & harvard business school alumni Free online collection of more than 3,300 micro lectures • • – Think out loud video tutorials in mathematics, sciences, engineering & medicine, economics, finance, arts, history, civics and even computer science – Automated exercises with continuous assessment – Content delivered offline in community colleges, charter schools and other schools across US – Providing a high quality education to anyone, anywhere Mission : to accelerate learning for students of all ages Khan academy has eclipsed mit’s open courseware ( OCW) in terms of videos viewed – – – – – – Its youtube channel has more than 172 million total views, compared to mit's 38 million. It also has twice as many subscribers, at more than 369,000 Over 177 million lessons delivered till date Close to quarter billion dollars in donation Team size of just 20 people Amongst the 100 most influential people of the world
  • 40. Creating the Blue Ocean Traditional Learning 1) Industry divided into 2 segments • Brick & mortar Learning – Schools/ Colleges • Online learning 2) Learning was centered around students 3) The factors the industry was competing on: • Student teacher ratio • Class room Interaction • Cost of learning / Education • Interactive Learning Khanacademy + Schools 1) Khanacademy filled the gaps existing in traditional brick & mortar school learning • Videos & Exercises to be used as a teaching aid and not replacement for teacher Use analytics and technology to figure out the Strengths & weakness of students • 2) Learning is centered around students, teachers and parents 4) Smart kids get more attention than other kids 4) Everybody gets equal opportunity / attention/ Learning 5) Focused pedagogy – Teacher talks – Students listen – Therefore Students learn 5) Unique Pedagogy • Stop, rewind, understand and then play 6) Teachers Judge student’s strength / weakness 6) Analytics drive the understanding of each students strengths & Weakness
  • 41. 4 Actions Framework – Khan Academy Eliminate Raise • Quality of Learning • Equality of Learning • Simplicity in learning • Progress & Tracking management •Sharing and mentoring • Emotional Connect • Need of classrooms for learning • Boring teachers and lectures • Cost of education Reduce • Difficulty level /s in Learning • Entry barriers for quality education students across the world) • Pedagogy based learning Create ( for • Enriched and vibrant class rooms •Interactivity and fun while learning • More involvement from parents, teachers & kids
  • 42. The Strategy Canvas- Khan Academy High Medium Relevance Scale Low Classroo ms Cost of Learning/ Teaching Teacher student ratio Learning pedagogy Learning Quality Student Tracking Traditional Education/ Schooling Industry Attributes of Industry & Competitors Simplici ty Learnin g equality Involve ment Levels Sharing Emotiona l Appeal Enriched Classroom s KhanAcademy.org
  • 43. Khan Academy + Classroom Learning = Blended Learning Audience Regular students– Students Teachers Parents Change 1 Pairing classmates with each other facilitated easier learning Deep analytics and data to understand the student learning behaviors and interests Change 3 Classroom is enriched – with higher level discussions and problem solving Equality of learning Understanding their aspirations better Change 4 Mentoring and coaching by students – to students across the world – Empowered learning More quality time with students More quality time with parents Started re learning and refreshing their concepts Understand their child’s strengths and talents better Clubbed the best of both worlds – More constructive and enriched classroom based learning Teachers have more quality time with students – – • • Forced the teachers to view videos and exercises Change 2 • • Classroom teaching now done at home Teacher provides more time to students who need them If a student gets stuck in a subject / topic – he / she is paired with other student - to facilitate easy learning Students can coach and mentor other students ( to anyone -across the world) Parents really know what their kids are doing and what they are good at – with analytics
  • 44. Introduction to Pioneer, Migrator and Settler Maps Pioneer Blended Learning (Online + Classroom) Khan Academy •Online teaching aids / Supplements classroom teaching ( Value Innovation) Migrator Online Learning ( Value Improvement) (Online, mobile, ipad, Social) Settlers Traditional brick & mortar learning (Schooling System) ( Value Imitation) Today • • • Tomorrow Settlers are defined as me-too businesses, Migrators are business offerings better than most in the marketplace, and a pioneers is the businesses that offer unprecedented value. Every thriving market place has high no of Settlers, moderate migrators and low / medium pioneers. The classification is also directly proportional to the growth potentials This framework can be used to help a company align its internal product portfolios – – – – Today's market share is a reflection of how well a business has performed historically. Thereby help in determining which businesses experience the highest and lowest growth and cash flow. Clearly, what companies should be doing is shifting the balance of their future portfolio toward pioneers If current portfolio and the planned offerings consist mainly of settlers then the company has low growth trajectory
  • 45. Challenging The Boundaries
  • 46. What Did They Do Differently? NETJETS Looking beyond the current Industry Private jet industry Indochino.com Looked at unique Strategic groups within the industry Audience who wanted a good fitting suit at a nominal price Most profitable strategic group Private Jet Convenience + Marginal increase in cost + Fractional Ownership Corporate and business class travelers Leveraged the Scope of product/ Service offering Reduced the consumer’s effort by eliminating the need to choose store, Tailors, Customization costs etc Customized , No Hassles affordable suit
  • 47. What Did They Do Differently? Zynga Looking beyond the current Industry Made a Niche Industry to a mass industry. Khan Academy Improved the scope of Product Offerings Eliminated the pain points in a conventional system through a complementary service offering Newer Buyer Groups Looked at Non Buyer Groups by eliminating their pain points Newer Buyer Groups Expanded the horizon by involving teachers & parents Looked across time to leverage social networkin g Increased scope of product/ games Made games more Social & Educational Gaming with Friends Looked at the audience trends and Provided unprecedented value Reduced Functional & Increased emotional orientatio n • No frills service – just click, play, watch, learn & practice utility • Commitment to quality education – increased emotional appeal Looked across time to leverage trends Looked at the audience needs and Used his learning medium to blend with Conventional learning Empower ed & Enriched classroom s
  • 48. Summary Of The Webinar • Blue ocean strategy is about creating value innovation to the buyers • Its about questioning and challenging the current industry boundaries and breaking out of them • We also learnt through case studies – How a B2C industry was made into B2B Industry – Net Jets – How a new niche industry was created by providing buyer utility and convenience values - IndoChino.com – How a Niche industry was made into a mass industry – Zynga – How two industries could work together to create unprecedented value & utility to the audience – Khan academy
  • 49. Blue Ocean Strategy Principles Strategy Execution Strategy Formulation Search Risks Planning Risks Scale Risks Business Model Risks Organizational Risks Management Risks 6 Paths Approach Strategic Planning Market Sizing Business Model Mobilization Management Risks Reconstruct Market Boundaries Focus on Big Picture – Not Numbers Reach Beyond Existing Demand Getting the strategic Sequence Right Overcoming Organization al hurdles Building Execution into Strategy •Alternative Industries •Strategic groups •Buyer Groups •Complementary Product offerings •Functional Emotional Orientation •Time Plan beyond incremental improvements using a visualization approach •Visual Awakening • Visual Exploitation • Strategy Fair • Visual Communication •Use PMS map to identify current & future orientation of business •Sequence the business Model to capture newly created value •Buyer Utility Mapping •Pricing & corridors of Masses • Cost Targets based on margins desired • Potential Adoption obstacles Tipping Point leadership to Tackle • Cognitive hurdles •Resource Hurdles •Motivational Hurdles • Political Hurdles Execution through: Engagement •Explanation •Clarity of expectations •Challenge Conventional practices •Consolidate demand by focusing on Non Customers • Three tiers of Non Customers To be Continued in next Webinar
  • 50. Questions ? 50

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