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

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

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  • The most successful businesses and individuals have the highest Value Quotient (in a sea that has no direct competitors).
  • Blue Ocean Planning & Execution: 8 Tools for ReDesigning Business Models & Making Better Decisions

    1. 1. BLUE OCEAN PLANNING & EXECUTION8 Tools for Redesigning Business Models & Making Better Decisions  Dr. Rod Kingrodkuhnking@sbcglobal.net & http://businessmodels.ning.comhttp://twitter.com/RodKuhnKing<br />
    2. 2. WHY REDESIGN EXISTING BUSINESS MODELS?”Greater Competition, Digitalization, and Globalization are Creating Bloody ‘Red Oceans’ for Businesses”<br /><ul><li> To Exponentially Increase Business Growth and Profitability
    3. 3. To Exponentially Increase the Value Quotient for Core, Peripheral, and Remote Customers As Well As Non-customers
    4. 4. To Swim Out of the ‘Red Ocean’ and Make the Competition Irrelevant
    5. 5. To Significantly Deliver More Value for Customers’ Jobs
    6. 6. To Facilitate Mergers and Acquisitions
    7. 7. To Respond to Competitive Pressures Including Commoditization
    8. 8. To Take Advantage of Emerging Opportunities and Technology
    9. 9. To Capture Greater Value (Profit) in the Value Chain and Network
    10. 10. To Provide a More Sustainable and Defensible Competitive Advantage</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    11. 11. HIGHLY SUCCESSFUL REDESIGNS OF CONVENTIONAL BUSINESS MODELSBusinesses With High Value Quotient (VQ)<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    12. 12. WHAT IS THE VALUE QUOTIENT?A Universal Metric of Success and Zoomable Decision-making<br />Ideal VQ Strategy<br />Everyone to continuously maximize benefit while minimizing cost throughout the value chain<br />+<br />-<br />Note<br />Value Quotient <br />= Advantage/Disadvantage<br />= Benefit/Cost<br />= Revenue/Cost<br />= Strength/Weakness<br />= Opportunity/Threat<br />= Reward/Risk<br />= Relevant Content/Noise<br />= Positives/Negatives<br />= Delight/Pain<br />= Good/Bad<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    13. 13. CUSTOMER JOBS COMPASS: What Jobs Must You Facilitate or Do In a Hierarchy of Customer Needs or ‘Jobs’?<br />Google Search<br />ELEMENTS OF LONG TERM-BUSINESS MODEL:<br />Long-term Competitive Advantage Scenarios<br /><ul><li> Increase performance of/develop/acquire software applications that customers hireto do ‘Physical Jobs’
    14. 14. Increase performance of/develop/acquire software applications that customers hire to do ‘Emotional/Social Jobs’
    15. 15. Increase performance of/develop/acquire software applications that customers hire to do ‘Intellectual Jobs’
    16. 16. (Increase performance of/develop/acquire software applications that customers hire to do ‘Spiritual Jobs’???)</li></ul>Long-term Value Proposition<br /><ul><li> ‘Total Happiness’ For All Customer Jobs on the Internet</li></ul>Targeted Customer Segments (Niches)<br /><ul><li> ‘Short and Long Tail’ of Users on the Internet</li></ul>Existing Impact of Google Search on Total Jobs<br /><ul><li> Average Impact of Google on Total Jobs =</li></ul> (6 + 2 + 5.5 + 2)/4 = 4.3<br />Impact of Ideal Software on Total Jobs<br />Impact of Ideal Software on Total Jobs =<br />‘Perfect 10’<br />(for Developing Tools to Make Customers Happier As Well As for Determining What ‘Jobs’ or Niche(s) of Total Happiness to Focus on)<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    17. 17. 8 Tools for Redesigning Business Models & Making Better Decisions<br />BLUE OCEAN RADAR: 200,000ft <br /><ul><li> Illustration of Ideal Business Result
    18. 18. Illustration of “Cost vs. Benefit” Trade-offs (Contradictions) & Trends
    19. 19. Basic Elements of Value Quotient</li></ul>BLUE OCEAN MAP: Global View<br /><ul><li>Illustration of Current and Desired Positions of You & Your Competitors
    20. 20. Illustration of IVQ and Market Seg-ments Including Red and Blue Oceans</li></ul>BOND: 100,000ft<br />Ways to Reduce Obstacles to Goal:<br /><ul><li> Facilitation of Decision-making
    21. 21. Visualization of Strategy
    22. 22. Modeling and Testing of Strategy</li></ul>BLUE OCEAN COMPASS: 60,000ft<br /><ul><li> Visualization of Shape as well as Trends of Competing, Desired, and Ideal Business Results (Models)</li></ul>TOOLS FOR REDESIGNING BUSINESS MODELS & MAKING BETTER DECSIONS<br />STRATEGY RADAR: 40,000ft<br /><ul><li> Illustration of Detailed Shape of Competing, Desired, and Ideal Business Results (Models)
    23. 23. Design of Value Proposition</li></ul>IDEAL VALUE CHAIN: Tactical View<br /><ul><li>Visualization of Ideal Value Chain (Business Model) for IVQ Strategy
    24. 24. Flows of Information (Cost and Revenue) & Resources Within a Value Chain or Business Model</li></ul>BLUE OCEAN STRATEGIC PLAN<br /><ul><li>Elements and Resources for Pursuing Goal of Ideal Value Quotient (Blue Ocean), Achieving Blue Ocean Plan, and Totally Engaging Employees and Other Stakeholders</li></ul>WHEEL OF OBSTACLES<br /><ul><li> Illustration of Internal Obstacles and Constraints to Achieving the Ideal Value Quotient for the Value Chain or Business Model</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    25. 25. BLUE OCEAN MAP: Global View of the Value Quotient<br />for Determining Where You and Your Competitors Currently Are & Where You Must Go<br />IDEAL VALUE QUOTIENT (BLUE OCEAN) <br />Fractal Market Segmentation (Niches) of Search Engine Market<br />∞<br /> Highly differentiated and premium-priced/free value chain<br />BLUE OCEAN Google Search<br />Value Quotient (VQ)<br />Blue Ocean Plan<br />(+):<br />DELIGHT<br />Lowly differentiated and low-cost value chain<br />RED OCEAN * “Me Too” Search Engine<br />Strategic Choice<br />Red Ocean Plan<br />(-): PAIN <br /> (Uncontested Experience, Market Space, or New Category)<br /> No. of Competitors<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    26. 26. BLUE OCEAN RADAR: 200,000ft View of the Value Quotientfor Comparing, Evaluating, and Redesigning Business Models As Well As Products and Services<br />Ideal Value Quotient(Blue Ocean)<br />Object/Core Job: ………………………………..…….<br />(cf. Goal of IVQ to Moore’s Law & “Singularity”)<br />Desired VQ = 8/2= 4<br />Existing VQ = 2/6= 0.33 &lt; 1<br />(Free)<br />COST<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    27. 27. Moore’s Law As A Special Case of Law of Increasing Value Quotient “The number of transistors on an integrated circuit roughly doubles every two years”<br />Ideal Value Quotient (Blue Ocean or “Singularity”)<br />Object/Core Job: Integrated Circuit Board<br />(cf. Goal of IVQ to Moore’s Law & “Singularity”)<br />VQ = 8/1= 8<br />VQ = 4/1= 4<br />VQ = 2/1= 2<br />(Free)<br />COST<br />(Size)<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    28. 28. Using the Blue Ocean Radar to Illustrate Trends in the Evolution of Technology “The Ideal Object Uses Its Internal and “Free” Resources to Instantly Do Its Job at No Cost and Without Any Negative Effect”<br />Ideal Value Quotient (INTERNET or “Singularity”)<br />Object/Core Job: Computer/Storage Devices<br />IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off<br />Desktop Computer<br />Mini-computer<br />Laptop Computer<br />Palmtop Computer<br />Old Mainframe Computer<br />(Free)<br />COST<br />(Size)<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    29. 29. Using the Blue Ocean Radar to Illustrate Trends in the Evolution of Technology “The Ideal Object Uses Its Internal and “Free” Resources to Instantly Do Its Job at No Cost and Without Any Negative Effect”<br />Ideal Value Quotient (LIGHT or Blue Ocean)<br />Object/Core Job: Vehicles<br />IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off<br />Rocket<br />Aircraft<br />Train<br />Car<br />Bicycle<br />Ship<br />(Free)<br />COST<br />(Size)<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    30. 30. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”<br />Ideal Value Quotient (Blue Ocean or “Infinite Genius”)<br />Object/Core Job: Linear Page<br />IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off<br />Existing Paradigm (VQ = 6/8 = 0.75)<br />Breakthrough Paradigm VQ = 8/2 = 4<br />(Free)<br />COST<br /> (Processing Time)<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    31. 31. Using the Blue Ocean Radar to Creatively Resolve Trade-offs “Someone, Somewhere May Have Already Resolved Your Trade-off or Contradiction”<br />Ideal Value Quotient (Blue Ocean or “Singularity”)<br />Object/Core Job: Vehicles<br />IVQ –Problem Solving Look within and across industries as well as in nature for similar or analogous resolution of trade-off<br />Conventional Thinking VQ = 8/7= 1.1<br />Optimum VQ = 8/4= 2<br />Existing VQ = 6/4= 1.5<br />(Free)<br />COST<br />Value Quotient (VQ) = Benefit/Cost = Revenue/Cost = <br />Revenue to Cost Ratio = Slope of Value Quotient Line<br />Ideal Value Quotient (Blue Ocean) Ideal Final Result of Continuously Implementing IVQ Decisions Job To Be Done (JBTD) at No Cost & With No Negative Effect<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    32. 32. Blue Ocean Network Diagram (BOND)for Quickly Making Better Decisions, Goals, and Strategies in Business (Projects)<br />“Exponentially increase the business’s Value Quotient (= Benefit/Cost)”<br />BENEFIT<br />Quality <br />24x7 Personalization/ Customization<br />CUSTOMERS (Sales/Revenue)<br />COST (Price)<br />Differentiation (Simplicity/Brand/ Novelty)<br />Business Action …<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    33. 33. Blue Ocean Network Diagram (BOND)for Visualizing Blue Ocean Goals & Strategy: Case of Google Search<br />“Exponentially increase the business’s Value Quotient (= Benefit/Cost)”<br />BENEFIT<br />Quality (Speed):<br />INCREASE<br />24x7 Personalization: INCREASE<br />CUSTOMERS (Sales/Revenue)<br />COST (Price): REDUCE<br />Differentiation (Simplicity/Brand): INCREASE <br />Business Action …<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    34. 34. Blue Ocean Network Diagram (BOND)for Modeling Blue Ocean Strategy and Assumptions: Case of Google Search<br />“Exponentially increase the business’s Value Quotient (= Benefit/Cost)”<br />Quality (Speed) <br />+<br />?<br />+<br />+<br />+<br />+<br />-<br />24x7 Personalization/ Customization<br />CUSTOMERS (Sales/Revenue)<br />COST (Price)<br />+<br />+<br />+<br />-<br />+<br />+<br />+<br />+<br />-<br />+<br />Differentiation (Simplicity/Brand/ Novelty)<br />+<br />Business Action …<br />+<br />+<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    35. 35. Blue Ocean Network Diagram (BOND)for Scoring Elements of the Value Quotient for a Business (Project)<br />BENEFIT<br />Quality:<br />(1-10) <br />24x7 Personalization:<br />(1-10)<br />CUSTOMERS (Sales/Revenue)<br />COST (Price):<br />(1-10)<br />Differentiation (Simplicity/Brand):(1-10)<br />Business Action …<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    36. 36. How to Quickly Develop an IVQ Strategy and Value Quotient<br />Obtain, from customer interviews or questionnaires, scores for the existing performance of each element or “value quotientfactor” on the Blue Ocean Network Diagram (BOND) and for the surveyed or “Red Ocean” company.<br />Score each element of Value Quotient using a scale from 1 (low) to 10 (high):<br /><ul><li>Quality: (1-10)
    37. 37. Cost: (1-10)
    38. 38. Differentiation: (1-10)
    39. 39. Personalization (Customization): (1-10)</li></ul>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.<br />Explore scenarios for desired or futureprofilesthat are strongly differentiated from “Red Ocean” profiles as well as lie closer to the “ideal” Blue Ocean.<br />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.<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    40. 40. BLUE OCEAN COMPASS: 60,000ft View of the Value Quotient<br />Google Search<br />4 ELEMENTS OF BUSINESS MODEL:<br />Competitive Advantage Strategies<br /><ul><li> Increase quality (speed) to level 9
    41. 41. Maintain cost at free: level 1
    42. 42. Increase differentiation (simplicity/relevance/ brand/novelty) to level 8
    43. 43. Increase on-demand; 24x7/(personalization; customization) services to level 8</li></ul>Value Propositions (Innovative Processes)<br /><ul><li> Higher quality (speed) and greater simplicity
    44. 44. Higher differentiation (simplicity/relevance/ brand/novelty) at no additional cost
    45. 45. Higher 24x7 personalization (for advertisers/ affiliates: AdWords; AdRank; AdSense) </li></ul>Targeted Customer Segments (Niches)<br /><ul><li> Students/Researchers/Internet Users who directly and quickly want information
    46. 46. Early adopter/innovator; Non-customers
    47. 47. Low cost-Advertisers
    48. 48. Website Owners/Content Providers</li></ul>Value Quotient (VQ)<br /><ul><li> Benefit = Quality + Differentiation + Personalization = (9 + 8 + 8)/3 = 25/3 = 8.3
    49. 49. Cost = 1
    50. 50. Value Quotient (VQ) = 8.3/1 = 8.3</li></ul>(for Generally Redesigning a Business Model & Value Proposition)<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    51. 51. STRATEGY RADAR: 40,000ft View of the Value Quotient<br />Southwest Airlines<br />4 ELEMENTS OF BUSINESS MODEL:<br />Competitive Advantage Strategies<br />Quality (Q)<br /><ul><li> Increase speed to level 9</li></ul>Cost ( C )<br /><ul><li> Reduce ticket price to level 1.3</li></ul>Differentiation (D)<br /><ul><li> Reduce lounges to level 1.2
    52. 52. Reduce meals to level 2.1
    53. 53. Increase friendly service to level 8.8</li></ul>Personalization (P)<br /><ul><li> Reduce personalization to level 1</li></ul>Value Propositions (Innovative Processes)<br /><ul><li> Higher speed at lower cost
    54. 54. Friendlier service at lower cost</li></ul>Targeted Customer Segments (Niches)<br /><ul><li> Frequent/Low-cost traveler
    55. 55. Early adopter/innovator; Non-customers</li></ul>Value Quotient (VQ)<br /><ul><li> Benefit = Quality + Differentiation + Customization = (9 + 1.2 + 2.1 + 8.8 + 1)/5 = 22.1/5 = 4.42
    56. 56. Cost = 1.3
    57. 57. Value Quotient (VQ) = 4.52/1.3 = 3.4</li></ul>(for More Specifically Redesigning a Business Model & Value Proposition)<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    58. 58. BLUE OCEAN STRATEGIC PLAN: Strategic View of the Business<br />for FacilitatingIVQ Strategy Execution, Organizational Alignment, and Total Employee Engagement<br />INDUSTRY/BUSINESS<br /> <br /><ul><li> Industry: Computer (Software); Advertising
    59. 59. Niche: Internet Search; Online Ads
    60. 60. Model: Business to Consumer (B2C); Business to Business (B2B); Platform</li></ul>COMPANY BACKGROUND<br /><ul><li> Location: Mountain View, California
    61. 61. Founder(s): Sergey Brin; Larry Page
    62. 62. Revenue: US$21.79 billion (2008)
    63. 63. No. of Direct Competitors:</li></ul>PRODUCTS/SERVICES<br /><ul><li>  Internet Search Engine: Google Search
    64. 64. Online Bidding Platform:Adwords
    65. 65. Online Syndicated Ads: Adsense
    66. 66. Complementary Apps: Maps, etc.</li></ul>CUSTOMER VALUE PROPOSITION<br /><ul><li> Uncluttered, fast, free, accurate search engine results and experience
    67. 67. Monetization of web page/site
    68. 68. Targeted, measurable, cost-effective, and relevant online advertising</li></ul>BLUE OCEAN STRATEGIC PLAN FOR: GOOGLE SEARCH<br />CUSTOMER BENEFITS/EXPERIENCE<br /><ul><li> Simple interface/Easy to use
    69. 69. Fast, accurate, and relevant results
    70. 70. Free search service
    71. 71. Unobtrusive ads; Site monetization
    72. 72. Targeted ads based on page’s content</li></ul>VISION (“Future Headline”)<br /><ul><li> Search engine platform; Software-as-a-Service (platform)
    73. 73. Advertising platform
    74. 74. Gateway to world’s knowledge-base</li></ul>MAIN GOAL/OBJECTIVE/STRATEGY<br />Blue Ocean Strategic Plan for providing an unprecedented customer experience<br /><ul><li> (See Blue Ocean Compass & Blue Ocean Map; Blue Ocean PAD; Value Chain Model; Blue Ocean Dashboard)</li></ul>MISSION/CORE VALUES<br /><ul><li> “To organize the world's information and make it universally accessible and useful”
    75. 75. “Don’t Be Evil”</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    76. 76. Ideal Value Chain (Business Model): Tactical View<br />“Perfect, Free, Simple, and Personalized (PFSP)” <br />E: EMPLOYEES/KNOWLEDGE ASSETS/ CULTURE<br /><ul><li> Highly Productive/Creative workers
    77. 77. (Experienced) Management
    78. 78. Patented PageRank Algorithm
    79. 79. Android: Operating System
    80. 80. Software Development Kits (SDK)</li></ul>S: SUPPLIERS/MATERIALS<br /><ul><li>Computers
    81. 81. Servers
    82. 82. Other Items</li></ul>M: MACHINERY/EQUIPMENT/ FACILITY<br />External <br /><ul><li>Efficient Data Centers/Scalable Architecture/Server Farms
    83. 83. WiFi Infrastructure
    84. 84. Satellite</li></ul>E: ENVIRONMENT<br /><ul><li> Competitors: Yahoo; AOL; MSN; etc.
    85. 85. Non-customers/Non-consumers
    86. 86. Partners/Complementors
    87. 87. Investors/Board of Directors
    88. 88. Gov./Community (Open Source)/Env.</li></ul>GOOGLE’S VALUE CHAIN (Business Model)<br />P: PROCESSES/STRATEGIES<br /><ul><li> Procurement; HR Mngt; Operations
    89. 89. Technology/R & D/Innovn/Production
    90. 90. Marketing/Branding/PR/Sales
    91. 91. Distribution/Logistics/Partnering
    92. 92. Customer Service (Relationship Mngt)</li></ul>“PFSP”<br />R: RETAILERS/DISTRIBUTORS/ CHANNELS<br /><ul><li> Website Owners
    93. 93. Content Providers: Individuals/ Corporations (Portals)
    94. 94. Affiliates; Partners: OEMs; Browsers</li></ul>C: CUSTOMERS/CONSUMERS<br /><ul><li> Web Users/Searchers: Desktop/Mobile
    95. 95. Website Owners
    96. 96. Advertisers - > Revenue
    97. 97. Enterprises (Search) -> Revenue
    98. 98. Software/API Developers</li></ul>O: OUTPUTS/PRODUCT/SERVICE<br /><ul><li> Google Search Engine/Search platform
    99. 99. Bidding & Advertising Platform: AdWords; AdSense; AdRank
    100. 100. Other Products/Apps such as Google Appliance</li></ul>KEY<br />Revenue (Information Flow)<br />Cost(Information Flow)<br />Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain?<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    101. 101. Template for Ideal Value Chain (Business Model)<br />Flows & Resources for “Perfect, Free, Simple, and Personalized (PFSP)” <br />E: EMPLOYEES/KNOWLEDGE ASSETS/ CULTURE<br />S: SUPPLIERS/MATERIALS<br />M: MACHINERY/EQUIPMENT/ FACILITY<br />E: ENVIRONMENT<br /><ul><li> Competitors
    102. 102. Non-customers/Non-consumers
    103. 103. Partners
    104. 104. Investors
    105. 105. Gov./Community/Society/Environment</li></ul>IDEAL VALUE CHAIN (BUSINESS MODEL):<br />Flows & Resources -<br />“Perfect, Free, Simple, and Personalized”<br />P: PROCESSES/STRATEGIES<br /><ul><li> Procurement; HR Mngt; Operations
    106. 106. Technology/R & D/Innovn/Production
    107. 107. Marketing/Branding/PR/Sales
    108. 108. Distribution/Logistics/Partnering
    109. 109. Customer Service (Relationship Mngt)</li></ul>R: RETAILERS/DISTRIBUTORS/ CHANNELS/INTERFACE<br />C: CUSTOMERS/CONSUMERS<br />O: OUTPUTS/PRODUCT/SERVICE<br />KEY<br />Revenue (Information Flow)<br />Cost (Information Flow)<br />Strategic Question: What is the Value Quotient (VQ) of elements of the value chain as well as the entire value chain?<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    110. 110. WHEEL OF OBSTACLES3 Internal Obstacles to Realizing the Ideal Value Quotient (IVQ) or Blue Ocean <br />AIG<br />Denver Airport<br />Enron<br />Alaska’s Road to Nowhere<br />“Me Too” Search Engines<br />Detroit Automakers<br />Traditional Airlines<br />Healthcare<br />“Mom and Pop” Businesses<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    111. 111. INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS & PURSUING THE IDEAL VALUE QUOTIENT<br />(Achieving apparently impossible business goals, strategies, and value propositions)<br />EMPLOYEE PROCESSES<br /><ul><li> Specialization/IP Creation-Protection
    112. 112. Outsourcing/Sub-contracting/Agents
    113. 113. ‘Star’ Performers/Top grading/Fun
    114. 114. Wisdom of the Crowd/Co-creation
    115. 115. Cross-functional Teams/Downsizing</li></ul>GENERAL PROCESSES<br /><ul><li> Vertical/Horizontal Integration
    116. 116. Extension/Compression/Removal
    117. 117. Open Collaboration/Long Tail (80-20)
    118. 118. Unbundling/De-integration/Bundling
    119. 119. Convergence/Standardization/Self-X</li></ul>MACHINERY/FACILITY PROCESSES<br /><ul><li> Franchise/Leasing/Rental
    120. 120. Localization/Substitution/Reversal
    121. 121. Modularization/Standardization
    122. 122. Asymmetry/’Poka Yoke’/Nesting
    123. 123. Attributes Interdependency</li></ul>ENVIRONMENT/SUPPLIER PROCESSES<br /><ul><li> Partnering/Complementing/Feedback
    124. 124. Merging/(De)Centralizing/Integration
    125. 125. Networking/Volunteering/Recycling
    126. 126. Convergence/(De)Regulation
    127. 127. Distributorship/Affiliates/Network</li></ul>INNOVATIVE PROCESSES FOR REDESIGNING BUSINESS MODELS & PURSUING THE IDEAL VALUE QUOTENT <br />DOMAIN-PROCESSES/FUNCTIONALITY<br /><ul><li> Digitalization/Idealization/Downsizing
    128. 128. Virtualization/Customization/DIY/JIT
    129. 129. Zero Defect/Lean/Six Sigma/Analytics
    130. 130. Automatic/Outsourcing/Scalability
    131. 131. Restructuring/Inventive Principles</li></ul>CHANNEL/WHOLESALERS PROCESSES<br /><ul><li> Multiple Channels/Syndication/Chain
    132. 132. Pyramid/Multi-level Markets/Wheel
    133. 133. Digitalization/Online/Word-of-mouth
    134. 134. Distributorship/Affiliates/Network
    135. 135. Advertising/Auction Platform/Partners</li></ul>CUSTOMER PROCESSES<br /><ul><li> Segmentation/Direct Selling/Branding
    136. 136. Cross-subsidy/Hybridized Markets
    137. 137. Subscription/Leasing/After Sale
    138. 138. Auction/Co-creation/Collaboration
    139. 139. Advertising/Freemium/Licensing</li></ul>PRODUCT/SERVICE PROCESSES<br /><ul><li> Product/Service-Platform/Package
    140. 140. Service-focus/Servicing/Upgrading
    141. 141. Performance-based Pricing/Discounts
    142. 142. Fixed product (shell) and recurring/ replaceable/upgradeable component</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    143. 143. BLUE OCEAN NETWORK DIAGRAM (BOND)What and Why?<br />What is the Blue Ocean Network Diagram (BOND)?<br /><ul><li>A tool for redesigning business models, pursuing the Ideal Value Quotient (IVQ), and making better decisions
    144. 144. Universal tool and visual framework for quickly and systematically eliminating 3 critical obstacles to the Ideal Value Quotient (IVQ): poor business decisions; uninspiring business goals and targets; Red Ocean (“Me Too”) strategies & models
    145. 145. Global view of “What customers want” or “Voice of the Customer”</li></ul>Why Blue Ocean Network Diagram (BOND)?<br /><ul><li>Facilitates decision-making for management and employees as well as board of directors
    146. 146. Facilitates organizational alignment and engagement especially for employees; everyone is on the same page and using the same metrics
    147. 147. Provides simple framework for visualizing Blue Ocean Strategy and IVQ
    148. 148. Provides simple visual framework for modeling as well as reviewing business strategies, objectives, models, assumptions, trade-offs, and decisions
    149. 149. Provides transparency in the selection and weighting of “value quotient factors” or decision-making criteria for evaluating possible business choices
    150. 150. Facilitates calculation of the value quotient for a business</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    151. 151. 4 Axioms of the Ideal Value Quotient (VQ)<br />Every object, which has sustainable growth, generally increases its Value Quotient (VQ) over time. Otherwise, the object declines and eventually dies.<br />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.<br />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.<br /> Over time, aspecies or an ecosystem of real-world objects evolves towards the ideal object. Otherwise, the species declines and becomes extinct.<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    152. 152. Related Concepts of the Ideal Value Quotient (VQ)<br /><ul><li>Value Quotient (Value Engineering)
    153. 153. Ideal Final Result (IFR); Ideality (TRIZ); SWOT Analysis (Business Planning)
    154. 154. Benefit/Cost Ratio; Revenue to Cost Ratio (Financial Planning)
    155. 155. Moore’s Law (Gordon Moore); Law of Accelerating Returns; Singularity (Ray Kurzweil)
    156. 156. Disruptive Innovation (Clayton Christensen)
    157. 157. Decision Theory: Rationality; Optimality; Satisficing Behavior (Economics)
    158. 158. Invisible Hand; Market Forces (Economics); 80-20 Rule (Vilfredo Pareto)
    159. 159. Theory of Evolution(Charles Darwin)</li></ul>Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    160. 160. The Law of Increasing Value Quotient<br />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.<br />Value Quotient (VQ)<br />Envelope of S-Curves<br />Time<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
    161. 161. Space-Time Template for the Evolution of a System<br />For Facilitating the Making of Scenarios (for Business/Product) in Space and Time<br />Environment (Supersystem) <br />SPACE <br />PRESENT SYSTEM:<br />System <br />Elements <br />INITIAL ELEMENT<br />(“SEED”) <br />Past <br />Present <br />Future <br />TIME <br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />BOBM8. Blue Ocean-Business Models. Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com<br />
    162. 162. REFERENCES<br />Battelle, J. (2005) The Search. New York: Portfolio. <br />Chesbrough, H. (2006) Open Business Models. Boston: Harvard Business School (HBS) Press. <br />Christensen, C.; Raynor, M.E. (2003) The Innovator’s Solution. Boston: Harvard Business School (HBS) Press.<br />Jarvis, J. (2009) What Would Google Do?. New York: HarperCollins.<br />Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press.<br />King, R. (2009) The Zoomable Page for Innovative Thinking in Space and Time:How Geniuses<br /> and World-class Innovators Really Think … And How Anyone Can Do So in 1 Minute or Less.<br />Fresno: Ideal-Solution Management. <br />7. Shuen, A. (2008) Web 2.0. California: O’Reilly.<br />Dr. Rod King<br /> <br />Speaker, Consultant, and Trainer on Business Model Analysis, Design, and Innovation<br />rodkuhnking@sbcglobal.net & http://businessmodels.ning.com<br />http://twitter.com/RodKuhnKing<br />

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