This report is about the Blue Ocean Strategy and its business application in bkash. As a developing country, Bangladesh should concentrate in Blue Ocean strategy.Blue Ocean Strategy seeks to make the creation and capturing oceans as systematic and actionable as competing in the red waters of known market space. For although blue ocean strategists have always existed, for the most part their strategies have been largely unconscious. Blue ocean strategy seeks to remedy this by not only decoding the pattern and principles behind the successful creation of blue oceans, but also providing the analytical frameworks and tools to act on this insight. A blue ocean is created in the region where bkash’s actions favorably affect both its cost structure and it value proposition to buyers.

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Blue Ocean strategy: A Case Study on ‘bkash’

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Executive Summary
This report is about the Blue Ocean Strategy and its business application in bkash. As a
developing country, Bangladesh should concentrate in Blue Ocean strategy.Blue Ocean Strategy
seeks to make the creation and capturing oceans as systematic and actionable as competing in the
red waters of known market space. For although blue ocean strategists have always existed, for
the most part their strategies have been largely unconscious. Blue ocean strategy seeks to remedy
this by not only decoding the pattern and principles behind the successful creation of blue
oceans, but also providing the analytical frameworks and tools to act on this insight. A blue
ocean is created in the region where bkash’s actions favorably affect both its cost structure and it
value proposition to buyers. Cost savings are made from eliminating and reducing the factors an
industry competes on. Buyer value is lifted by raising and creating elements the industry has
never offered. Over time, costs are reduced further as scale economies kick in, due to the high
sales volumes that superior value generates. The strategy outlines the premise, research, success
examples and the so-called ‘Value Innovation’ framework, which allows companies to create
Blue Ocean Strategies and in the process achieve such as high-impact, customer-based
innovations, significant increase in speed to market, from idea formation to market introduction,
significant decrease in development and operational costs, an innovation-focused and duly
motivated organization.
This report describe about various steps taken to implement this strategy. Here, describe rather
than competing within the confines of existing industry or trying to steal customers from rivals
(Red Ocean strategy), uncontested market space should be developed that makes competition
irrelevant. Thus project also gives us an idea about creating new market space. Red oceans are all
the industries in existence today—the known market space. In the red oceans, industry
boundaries are defined and accepted, and the competitive rules of the game are known. Here
companies try to outperform their rivals to grab a greater share of existing demand. As the
market space gets crowded, prospects for profits and growth are reduced. Products become
commodities, and cutthroat competition turns the red ocean bloody. Blue oceans, in contrast,
denote all the industries not in existence today—the unknown market space, untainted by
competition. In blue oceans, demand is created rather than fought over.The company use both
‘cost leadership’ and ‘differentiation’. They are success in other sense, DBBL mobile banking is
the first mobile banking system but bkash beat them and take the advantages both form business
profitability and market share. The company authority understands the potentiality of the market
and they uniquely create the portfolio. The portfolio includes the whole leadership gamut from
Strategy Formation, Strategy Implementation, Organizational Change and Staff Motivation.

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Table of Content
No. Contents Page
1.0 Introduction 11
2.0 Background of the Study 12-13
3.0 Blue Ocean Strategy 14
4.0 Six Path Framework 15-18
5.0 Three Tires of Non Customers 19-20
6.0 Four Actions under Blue Ocean Strategy 21
7.0 Blue Ocean Leadership 22
8.0 Developing a Blue Ocean Strategy 23-24
9.0 The Business Application 24-25
10.0 Implementing Blue Ocean Strategy 26
11.0 Implementation 27-29
12.0 In Asia: Blue Ocean Strategy for National Development 30-32

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Table of Content
No. Contents Page
13.0 Blue Ocean Strategy: Bangladesh Story 34
14.1 Overview of Mobile Banking 35
14.2 Mobile Banking in Bangladesh Banking 36
14.3 Infrastructure for Mobile Banking 36
14.4 Market Analysis 37
14.5
Findings on the MFS Market Structure
38
14.6 Ability to Implement Blue Ocean Strategy 39
14.7 Performance Analysis by Porter’s Five Forces Model 40-41
14.8 SWOT Analysis 42-43
15.0 bkash: Implementing Blue Ocean Strategy 44
15.1
Subscribers Analysis
45
15.2 Analysis on Branding 46-48
15.3
Three Factors Behind bkash Successful Implementation of BOS
49-51
16.0 Conclusion 52
17.0 Webliography/Bibliography 53-54

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1.0 Introduction
Blue Ocean Strategy is the most influential new concept in management strategy, whose exciting
premise is that companies can rearrange conventional factors of competition in order to create a
leap in customer value. This focus on beating the competition in existing market space was
exasperated by the meteoric rise of the Japanese in the 1970s and 1980s. Faced with mounting
competition in the global marketplace as, for virtually the first time incorporate history,
customers were deserting Western companies in droves, the center of strategic thinking
gravitated further towards the competition. A slew of competition- based strategies emerged
which argued that competition is at the core of the success and failure of firms, and that
competition determines the appropriateness of a firm’s activities that can contribute to its
performance. The result has been a fairly good understanding of how to compete skillfully in red
waters, from analyzing the underlying economic structure of an existing industry, to choosing a
strategic position of low cost or differentiation or focus, to benchmarking the competition. Yet,
although some discussions around blue oceans exist, little practical guidance exists to create and
capture them. It is a good area for concentration as a view point of Bangladesh. Bangladesh uses
Blue Ocean Strategy very recently but may not successfully implement. In this report, discussed
how Blue Ocean strategy can use in Bangladesh, the processes and methods. There are some
companies such as Walton, Bkash, BeximcoPharma, Bangladesh Premier League, Ekhanei.com,
Bikroy.com, Software firms uses Blue Ocean strategy successfully. In one sense, the most
successful story in Bangladesh is bkash. They understand the market and capture the market
share within two years of their operation.

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2.0 Background of the Study:
Origin of the Report
As a partial requirement of BBA program I need to go for project report to gather practical experience and
need to submit the report regarding that practical knowledge. This report is originated to require
completing the BBA program from United International University. This report will definitely increase
the knowledge of other students to know the “Blue Ocean Strategy: A Case Study on bkash”.
Objective of the Report
The objectives of the report are as follows:
 Understanding the Blue Ocean Strategy
 The business application of blue ocean strategy
 Understanding the concepts of BOS and its implementation
 Understanding how ‘bkash’ develop BOS and become the most successful story
 To study the business application of BOS in Bangladesh
Scope of the Study:
The report focuses on “Blue Ocean Strategy: A Case Study on bkash”. This report covers the blue ocean
strategy and how bkash implement blue ocean strategy in Bangladesh.
Methodology
Primary Data:
 Face to face conversation with bkash ASM of Mohammadpur zone
Secondary Data:
 “BLUE OCEAN STRATEGY”
 Websites
 Various publications on bkash
 Newspaper reports in this concern
 Other manual information

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Limitation of the Study
On doing the study, I personally came across some problems that may be cited as the limitations of the
study, which are as follows–
 It’s not possible to collect the data which are confidential. So it is quite difficult to collect all the
necessary data that are required to complete the report.
 In reality it is hard to understand all the concepts and gain sufficient knowledge about the
particular field.
 Sufficient records, publications facts and figures are not available, these hampers the scope of real
analysis.
 Enough information was not available to make a comprehensive study.
 Learning in details within just three months was really difficult.

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3.0 Blue Ocean Strategy
The metaphor of Red and Blue oceans describes the market universe. Red oceans are all the
industries in existence today—the known market space. In the red oceans, industry boundaries
are defined and accepted, and the competitive rules of the game are known. Here companies try
to outperform their rivals to grab a greater share of product or service demand. As the market
space gets crowded, prospects for profits and growth are reduced. Products become commodities
or niche, and cutthroat competition turns the red ocean bloody. Hence, the term red ocean is
used.
Blue oceans, in contrast, denote all the industries not in existence today—the unknown market
space, untainted by competition. In blue oceans, demand is created rather than fought over. There
is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is
irrelevant because the rules of the game are waiting to be set. Blue Ocean is an analogy to
describe the wider, deeper potential of market space that is not yet explored. The corner-stone of
Blue Ocean Strategy is 'Value Innovation'. A blue ocean is created when a company achieves
value innovation that creates value simultaneously for both the buyer and the company. The
innovation(in product, service, or delivery) must raise and create value for the market, while
simultaneously reducing or eliminating features or services that are less valued by the current or
future market. The author’s critique Michael Porter's idea that successful businesses are either
low-cost providers or niche-players. Instead, they propose finding value that crosses
conventional market segmentation and offering value and lower cost. This idea was originally
proposed by Prof. Charles W. L. Hill from Michigan State University in 1988. Prof. Hill claimed
that Porter's model was flawed because differentiation can be a means for firms to achieve low
cost. Prof. Hill proposed that a combination of differentiation and low cost may be necessary for
firms to achieve a sustainable competitive advantage.
Blue Ocean Strategy is a business strategy that promotes a systematic approach "for making the
competition irrelevant." A core idea is to create a leap in value for both the company and its
buyers by breaking the differentiation/low cost trade-off and to align product value and profit
proposition.

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4.0 Six Path Framework
To break from competition, an organization has to reconstruct the market boundary which is the
first and foremost principle in creating blue ocean strategy. There are six basic approaches to
reconstruct market boundaries, also known as Six Paths Framework. These paths challenge the
conventional approach of the organization in strategy formulation to work within its boundaries,
but instead break out of the known boundaries. This helps them to move out of red oceans and
create blue oceans. These paths have general applicability across industry sectors, and they lead
companies into the corridor of commercially viable blue ocean ideas. None of these paths
requires special vision or foresight about the future. All are based on looking at familiar data
from a new perspective.
Following are the six paths framework involved in formulating the blue ocean strategy.
Path 1: Look across alternative industries
Organizations compete not only within the industries but also with organizations in other
industries which produce alternative product and services to their industry. One of the biggest
limitations we put on our organization is to assume that our products/services compete in a
defined and unchanging industry with a very narrow view of the environment.

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The first path in formulating the blue ocean strategy is to find the alternative industries to your
industry’. In order to understand this path let us first understand difference between substitute
and alternative:
•Substitutes are products or services that have different forms but offer the same functionality or
core utility.
•Alternatives are products or services that have different functions and forms but the same
purpose.
Let us consider an example from entertainment industry. The function of this industry is to
provide entertainment and the purpose of this industry is relax, rewind, de-stress, experience and
fun. The substitutes to this industry are CDs, TV, stage shows, etc. But the alternatives to this
industry include visiting a mall, library, hobby center, etc., all of which serves the same purpose.
Thus by focusing on the key factors that lead buyers to trade across alternative industries and by
eliminating or reducing everything else, you can create a blue ocean of new market space.
Let us take the case of pro-biotic drink Yakult. It competes with health drinks, juice brands, at
the same time it competes with pharma industry. However, both health drinks
producers&pharma brands don’t consider Yakult as their competition. Thus Yakult has created a
blue ocean for itself across industries.
Path 2: Look across strategic groups
Strategic groups within Industries are group of organizations within an industry that pursue a
similar strategy. Strategic groups include a hierarchical order built on two dimensions, price and
performance.TATA chose not to compete with entry level strategic group of cars in India such as
Maruti Omni, Maruti 800, Alto& Hyundai Santro. Instead it questioned the un-questioned notion
that cars can’t be less than a lakh of Indian Rupees. It looked for factors which, Maruti 800
buyers would trade down or 2 wheeler buyers would trade up!
Path 3: Look across Buyer Groups
In most industries, competitors converge around a common definition of target buyer. However
there are chain of buyers who are directly or indirectly involved in buying decisions, such as:
•Purchasers who pay for the product or service
•Actual users who use the products
•Influencers who have a role to play in decisions
•Intermediate buyers who are traders
•Regulators who influence the buying decisions.

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Novodisk, a leading producer of insulin created Blue Ocean by focusing on diabetes patients
instead of doctors & nurses who are traditionally targeted. Thus they created travel friendly, easy
to use, hassle free, easy to set, fancy looking, pen like shots instead of syringes and insulin
bottles.
Path 4: Look across complementary product and service offerings
An organization has to think about what happens before, during, and after your product/service is
used by the consumers. In most industries, competitors converge within the boundary of their
industry’s product and service offerings. By understanding the context in which your product or
service is used and what happens before, during, and after, you can identify pain points
(constraints) of the consumers, eliminate these pain points through a complementary product or
service offering.
Philips saw that the biggest issue in brewing tea was not in the kettle itself but in the
complementary product of water, which had to be boiled in the kettle. The issue was the lime
scale found in tap water. Philips saw this as an opportunity and solved the major pain point
ofcustomer that related to water rather than their kettle by adding a mouth filter in the kettle that
effectively captured the lime scale as the water was poured.

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Path 5: Look across the functional-emotional orientation of an industry
Emotional Appeal to buyers refers to the emotional utility a buyer receives in the consumption or
use of a product or service. Competition tends to converge on one of two possible basis of
appeal. ‘What are the extras we offer that add to the cost of our product without enhancing
functionality? By eliminating or reducing these factors, can we create a simpler, functional,
lower-priced, lower-cost offering that would dramatically raise buyers’ value’. These are to be
questioned in blue ocean strategic formulation.
Functional Appeal to buyers refers to the functional utility buyers receive from a business or
product/service based on basic calculations of utility and price. Competition in an industry tends
to converge on one of two possible basis of appeal. What emotional elements can we raise or
create to infuse our commodity products with new life by adding a dose of emotion?
By understanding your industry focus on functionality or emotional appeal, you can either
compete on emotional appeal by stripping functional elements or compete on functionality by
adding emotional elements.
Fast Food producer, Subway uses emotional appeal to trade up its range of products which
usually have more functional appeal rather than emotional. Fast food industry is driven by price
and waiting time which are functional. This industry rarely competes on emotional appeal.
Path 6: Look across time
Many of us respond to trends in our industry at the point they are making an impact. In other
words we create reactive strategies, which allow us to adapt to a changing environment. All
industries are subject to external trends that affect their business over time. Instead of adapting
incrementally and somewhat passively, one can gain insights into how the trend(s) will change
value to customers and impact their organization’s business model.
To assess trends across time, three criteria are critical: the trend must be decisive to the business,
irreversible and have a clear trajectory. By knowing what trends have a high probability of
impacting your industry, are irreversible, and evolving in a clear trajectory, you can open up
unprecedented customer utility.
When we look across these six paths at the commencement of our strategy formulation we find
that this process helps us create new perspectives. Our thinking becomes more creative.
It seems simple, because it is. However, it’s when we actually start the process of looking across
these six paths we find our assumptions start to break down and simultaneously we awaken to
new perspectives about our organization and its industry. And it’s from this place that
innovations and new opportunities are created.

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5.0 Three Tires of Non Customers
Typically, to grow their share of a market, companies strive to retain and expand their existing
customer base. This often leads to finer segmentation and greater tailoring of offerings to better
meet customer preferences. The more intense the competition is, the greater, on average, is the
resulting customization of offerings. As companies compete to embrace customer preferences
through finer segmentation, they often risk creating too-small target markets.
To maximize the size of their blue oceans, companies need to take a reverse course. Instead of
concentrating on customers, they need to look to noncustomers. And instead of focusing on
customer differences, they need to build on powerful commonalities in what buyers’ value. This
reorientation allows companies to reach beyond existing demand to unlock a new mass of
customers that did not exist before.

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Although the universe of noncustomers typically offers big blue ocean opportunities, few
companies have keen insight into who noncustomers are and how to unlock them. To convert
this huge latent demand into real demand in the form of thriving new customers, companies need
to deepen their understanding of the universe of noncustomers. There are three tiers of
noncustomers that can be transformed into customers. They differ in their relative distance from
the current market.
The first tier of noncustomers is closest to the current market, sitting just on the edge. They are
buyers who minimally purchase an industry’s offering out of necessity but are mentally
noncustomers of the industry. They are waiting to jump ship and leave the industry as soon as the
opportunity presents itself. However, if offered a leap in value, not only would they stay, but also
their frequency of purchases would multiply, unlocking enormous latent demand.
The second tier of noncustomers is people who refuse to use an industry’s offering. These are
buyers who have seen the current offering as an option to fulfill their needs but have decided
against participating.
The third tier of noncustomers is farthest from the market. They are noncustomers who have
never considered the market’s offering as an option.
By focusing on key commonalities across these noncustomers and existing customers, companies
can understand how to pull them into their new market.The blue ocean strategy highlights how
everyone is so busy chasing customers within the safe red ocean when their focus should be on
untapped markets of influence.
First Tier: Soon to be Non Customer
Second Tier: Refusing Non Customer
Third Tier: Unexplored Non Customer

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6.0 Four Actions under Blue Ocean Strategy
The Four Actions Framework is used to reconstruct buyer value elements in crafting a new value
curve. To break the trade-off between differentiation and low cost and to create a new value
curve, the framework poses four key questions, shown in the diagram, to challenge an industry’s
strategic logic.

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7.0Blue Ocean Leadership
Blue Ocean Leadership applies to all organizations which have an ocean of disengaged
employees and need a step change in leadership strength. Specifically, Blue Ocean Leadership
applies to:
 Corporations
 Non-profits
 Governments
 And across small, medium and large size organizations

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8.0 Developing a Blue Ocean Strategy
Creating New Market Space
If we do operate in an existing market that is highly competitive (red ocean), then that is not
necessary a bad thing but we believe it is vital to eliminate potential risk (competing in a Red
Ocean) and begin to identify how we can create uncontested market space(blue ocean)and make
the competition irrelevant.

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Thinking beyond Existing Boundaries
Consider being unconventional during our strategic planning process. Challenge yourself;
Challenge the performance of your existing services, products and delivery systems. Too many
organizations become complacent and fail to innovate themselves.
Identifying Non-Customers
There are customers out there who are not showing up on our radar screen. Capitalize on existing
demand but ensure you leave no stone unturned in exploring ways to create new customers. Who
should be your next customer? Who will be your customers in three to five years’ time? What do
you need to do to make them customers?
Challenging the Industry Cost
The industry we operate in has a degree of over capitalizations that is not adding value and is
simply not needed by your customers. Whether that is in product, service or delivery systems.
You need to identify these areas and eliminate them from your value proposition. Ultimately, we
need to be the leader in driving down the industry cost.
9.0The Business Application
For a small-business owner, the strategic plan often is geared to gaining market share at the
expense of competitors -- or preventing them from taking market share from the company. In the
book "Blue Ocean Strategy," W. Chan Kim and Renee Mauborgne propose a different strategic
objective -- creating an entirely new market space for the company where there are no
competitors rather than battling in the existing space. Competitive intelligence -- gathering
information about competitors’ strategies, strengths and weaknesses -- is the foundation for
creating the Blue Ocean Strategy.
Value of Blue Ocean Strategy
The Blue Ocean Strategy can help the company accelerate company's growth by suggesting new
products or services could offer that no one else is -- a potential opportunity the size of an ocean.
It injects additional creativity into company's strategic planning process, forcing the company to
think what it could do differently and better rather than being satisfied with its current products
or services. The authors use the example of Cirque du Soleil taking a completely new approach
to a declining industry, circus-style entertainment. The company did not narrowly define itself as
a "circus company." By thinking outside the circus tent, Cirque du Soleil was able to create a
new form of entertainment that incorporated various styles such as dance and music as well as
feats of athleticism. This allowed the company to attract new demographic groups that traditional
circuses failed to penetrate.

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Find What Customers Want or Need
Applying a Blue Ocean Strategy requires that company have a market orientation -- looking at
mission as satisfying customer needs or wants in a superior fashion relative to competitors. The
first step is to determine what product features or attributes are most important to the target
market. A small business is ideally positioned to accomplish this because many times members
of the organization all the way up to the CEO deal with customers on a daily basis. Take time to
ask customers what their current needs or wants are, either informally through bconversations
with them on the phone or when they visit your company's location, or more formally with
online or in-store customer surveys.
Evaluate Competitors' Performance – with the Company
Once the company understands the multi-faceted needs of its target market, the company should
evaluate how the company and its major competitors are doing at meeting these needs -- all of
them. Many companies find that what they believe they excel at is not of particular importance to
customers, and they are missing the mark on product attributes or dimensions of customer
service that are of major concern to their target market.
Identifying the Gaps
Evaluate the benefits of the company and its competitors are providing versus what the customer
is looking for in her ideal purchase. The will see gaps that it could fill with an innovative product
or service. To achieve a True Blue Ocean breakthrough, the innovation must be strikingly
different from what customers have available to them now. The company isn't simply finding
this new ocean of opportunity -- it is creating it. Company’s objective is to introduce product or
service attributes that the customers in its industry have not seen before. The Blue Ocean
approach works for both existing companies seeking to re-invent themselves and spur faster
growth, and start-up ventures seeking to sprint out ahead of potential competitors.

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10.0 Implementing Blue Ocean Strategy
Before implementing Blue ocean strategy it is very important to know the difference between
Red and Blue Ocean. The difference can be known by the following table:-
Blue ocean strategists recognize that market boundaries exist only in managers’ minds, and they
do not let existing market structures limit their thinking. To them, extra demand is out there,
largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of
attention from supply to demand, from a focus on competing to a focus on creating innovative
value to unlock new demand. This is achieved via the simultaneous pursuit of differentiation and
low-cost.Under blue ocean strategy, there is scarcely an attractive or unattractive industry
because the level of industry attractiveness can be altered through companies’ conscientious
efforts. As market structure is changed by breaking the value/cost tradeoff, so are the rules of the
game. Competition in the old game is therefore rendered irrelevant. By expanding the demand
side of the economy new wealth is created. Such a strategy therefore allows firms to largely play
a non–zero-sum game, with high payoff possibilities.

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11.0 Implementation
Look Across Functional or Emotional Appeal to Buyers
When companies are willing to challenge the functional-emotional orientation of their industry,
they often find new market space. We have observed two common patterns. Emotionally
oriented industries offer many extras that add price without enhancing functionality.
Stripping away those extras may create a fundamentally simpler, lower priced, lower-cost
business model that customers would welcome. Conversely, functionally oriented industries can
often infuse commodity products with new life by adding a dose of emotion and, in so doing, can
stimulate new demand. Two well-known examples are Swatch, which transformed the
functionally driven budget watch industry into an emotionally driven fashion statement, or The
Body Shop, which did the reverse, transforming the emotionally driven industry of cosmetics
into a functional, no-nonsense cosmetics house.
Look Across Complementary Products and Service Offerings
Few products and services are used in a vacuum. In most cases, other products and services
affect their value. But in most industries, rivals converge within the bounds of their industry’s
product and service offerings. Take movie theaters.
The ease and cost of getting a babysitter and parking the car affect the perceived value of going
to the movies. Yet these complementary services are beyond the bounds of the movie theater
industry as it has been traditionally defined. Few cinema operators worry about how hard or
costly it is for people to get babysitters. But they should, because it affects demand for their
business. Imagine a movie theater with a babysitting service. Untapped value is often hidden in
complementary products and services.
The key is to define the total solution buyers seek when they choose a product or service. A
simple way to do so is to think about what happens before, during, and after your product is
used. Babysitting and parking the car are needed before people can go to the movies. Operating
and application software are used along with computer hardware. In the airline industry, ground
transportation is used after the flight but is clearly part of what the customer needs to travel from
one place to another.
Look Across the Chain of Buyers
Individual companies in an industry often target different customer segments—for example,
large versus small customers. But an industry typically converges on a single buyer group. The
pharmaceutical industry, for example, focuses overridingly on influencers: doctors. The office
equipment industry focuses heavily on purchasers: corporate purchasing departments. And the

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clothing industry sells predominantly to users. Sometimes there is a strong economic rationale
for this focus. But often it is the result of industry practices that have never been questioned.
Challenging an industry’s conventional wisdom about which buyer group to target can lead to
the discovery of new Blue Ocean.
By looking across buyer groups, companies can gain new insights into how to redesign their
value curves to focus on a previously overlooked set of buyers. Think of Novo Nordisk, the
Danish insulin producer that created a blue ocean in the insulin industry…. [Novo Nordisk] saw
that it could break away from the competition and create a blue ocean by shifting the industry’s
longstanding focus on doctors to the users—patients themselves. In focusing on patients, Novo
Nordisk found that insulin, which was supplied to diabetes patients in vials, presented significant
challenges in administering.
Vials left the patient with the complex and unpleasant task of handling syringes, needles, and
insulin, and of administering doses according to his or her needs. Needles and syringes also
evoked unpleasant feelings of social stigmatism for patients and patients did not want to fiddle
with syringes and needles outside their homes, a frequent occurrence because many patients must
inject insulin several times a day. This led Novo Nordisk to the blue ocean opportunity of Novo
Pen, launched in 1985. Novo Pen, the first user-friendly insulin delivery solution, was designed
to remove the hassle and embarrassment of administering insulin.
Look Across Strategic Groups within Industries
The key to creating a blue ocean across existing strategic groups is to break out of this narrow
tunnel vision by understanding which factors determine customers’ decisions to trade up or down
from one group to another. Consider Curves, the Texas-based women’s fitness company.
Since franchising began in1995, Curves has grown like wildfire, acquiring more than two million
members in more than six thousand locations, with total revenues exceeding the US$ 1 billion
mark. A new Curve opens, on average, every four hours somewhere in the world. What’s more,
this growth was triggered almost entirely through word of mouth and buddy referrals. Yet, at its
inception, Curves was seen as entering an over saturated market, gearing its offering to
customers who would not want it, and making its offering significantly blander than the
competition’s. In reality, however, Curves exploded demand in the U.S. fitness industry,
unlocking a huge untapped market, a veritable blue ocean of women struggling and failing to
keep in shape through sound fitness.
Curves built on the decisive advantages of two strategic groups in the U.S. fitness industry—
traditional health clubs and home exercise programs—and eliminated or reduced everything else.
Look Across Alternative Industries.
In making every purchase decision, buyers implicitly weigh alternatives, often unconsciously.
Do you need a self-indulgent two hours? What should you do to achieve it? Do you go to movie,

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have a massage, or enjoy reading a favorite book at a local café? The thought process is intuitive
for individual consumers and industrial buyers alike.
For some reason, we often abandon this intuitive thinking when we become sellers. Rarely do
sellers think consciously about how their customers make trade-offs across alternative industries.
A shift in price, a change in model, even a new ad campaign can elicit a tremendous response
from rivals within an industry, but the same actions in an alternative industry usually go
unnoticed.
Trade journals, trade shows, and consumer rating reports reinforce the vertical walls between
one industry and another. Often, however, the space between alternative industries provides
opportunities for value innovation. Consider Net Jets, which created the blue ocean of fractional
jet ownership. In less than twenty years Net Jets has grown larger than many airlines, with more
than five hundred aircraft, operating more than two hundred fifty thousand flights to more than
one hundred forty countries.
Purchased by Berkshire Hathaway in 1998, today Net Jets is a multibillion-dollar business, with
revenues growing at 30–35 percent per year from 1993to 2000. Net Jets’ success has been
attributed to its flexibility, shortened travel time, hassle free travel experience, increased
reliability, and strategic pricing. The reality is that Net Jets reconstructed market boundaries to
create this blue ocean by looking across alternative industries.

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12.0 In Asia: Blue Ocean Strategy for National Development
Malaysia
As Malaysia continues its ambitious journey towards becoming an advanced nation by 2020, the
government has adopted Blue Ocean Strategy to deliver programs and services to the public that
are high-impact, low cost, and rapidly executed.
Through National Blue Ocean Strategy, over 80 ministries and agencies – from the police and
military, to women, youth, and higher education organizations – are collaborating to formulate
and execute creative blue ocean strategy initiatives that are transforming the country.
Taiwan
In 2007 the Minister of Foreign Affairs of Taiwan, James Huang, proposed his “21st century
global village diplomatic policy.” The new policy is an “updated, situation-coping” policy that
emphasizes Taiwan’s distinct identity. The policy includes four major strategies for the Ministry
of Foreign Affairs to follow, one of which is adopting blue ocean strategy to build relations with
other countries. According to the Minister, by following BOS, Taiwan will not engage in “zero
sum” competition with China and will instead use its advantages in various fields to build
comprehensive partnerships with nations around the world.
South Korea
Inter-Korean economic cooperation can be a blue -ocean strategy for us,” says Moon Jae-in, the
leader of the opposition in South Korea. He sees that improved relations between North Korea
and South Korea would be economically beneficial to his country.
China
The city of Shenyang in China’s Liaoning Province established a Blue Ocean Economic Zone to
spur economic development in the region. The project has huge potential to provide a new
engine for the old industrial base as well as provide residents with reasonably priced cultural and
technological imports.
National Yiwu Economic and Technology Development Zone, a 93-square kilometer economic
zone, was established in 1992 as a wholesale hub for all of China. The zone is now looking into
applying blue ocean strategy to move away from being a wholesale and manufacturing zone to
more sophisticated areas to open new market spaces.
The Agriculture Bank of China (ABC) has surpassed the Bank of China in the extent to which it
has implemented blue ocean strategy in its state operations. The ABC offers loans to improve
public services in cities, supports development of local industry, and assists residents in settling
down in cities.

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Myanmar
The President of Myanmar and Chairman of STX Group (the world’s fourth-largest ship and
plant manufacturer) discussed plans to unlock blue ocean opportunities in infrastructure projects
in Myanmar. The President invited the group to invest in three special economic zones which are
underway and to cooperate in solar power generation to supply electricity to rural areas,
infrastructure development, and dockyards.
Sri Lanka
The Colombo Plan for Cooperative Economic and Social Development in Asia and the Pacific is
an inter-governmental organization providing development assistance with a focus on human
resources development in the Asia-Pacific region. The Colombo Plan was conceived at the
Commonwealth Conference on Foreign Affairs held in Colombo, Ceylon (now Sri Lanka) in
1950 as a cooperative venture for economic and social advancement of the people of South and
Southeast Asia. The Colombo plan used blue ocean strategy to develop a training program on
entrepreneurship development that targeted senior and mid-level government and non-
government officials and working with SMEs to formulate and implement entrepreneurship
programs.
Sri Lanka is urged to apply blue ocean strategies similar to those adopted by Dubai. The editorial
urges Sri Lanka to align its value, profit, and people propositions. Sri Lanka could emulate Dubai
in pursuing its ambition to become a miracle economy in Asia. Specific actions Sri Lanka could
take would be a fine-tuning of its incentive packages for foreign investment, infrastructure
improvements, and a focus on housing and education.
Nepal
The article suggests there are plenty of opportunities for Nepal to achieve the success that
Switzerland and Dubai have. Nepal needs to find alternative revenue sources as a means of
lessening its dependence on foreign aid. It must also stop competing in areas where it has no
comparative advantage and focus on creating a blue ocean. This can be achieved through
determined leadership and direction.
Singapore
Singapore has applied blue ocean strategy to achieve the growth it saw in its first 30 years by
pursuing low-cost and differentiation simultaneously. The Value Innovation Action Tank
(VIAT), a non-profit organization founded in partnership by 15 Singaporean government
ministries and agencies, was established in 2004. Its objective is to apply the ideas, frameworks,
tools, and processes of value innovation and blue ocean strategy to the country’s private and
public sectors to power Singapore in the knowledge economy.

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United Arab Emirates
The Emirates Identity Authority seeks to apply blue ocean strategy at all leadership levels. Its
Senior Management Committee emphasizes the importance of changing the concept of
performance from developing procedures and services, to innovation-based approaches that
would allow the organization to move away from competition.
Oman
According to one of the principal presenters at the Conference on Strategic Growth Planning and
Change Management, the Sultanate’s prodigious natural and human resources, if leveraged
through the application of the blue ocean strategy, can put Oman on a path to accelerated growth,
achieving even better results than Dubai.

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13.0 Blue Ocean Strategy: Bangladesh Story
In today‘s overcrowded industries in Bangladesh, competing head-on results in nothing but a
bloody red ocean of rivals fighting over a shrinking pool. A red ocean refers to a saturated
market where there is fierce competition among companies offering similar services; a blue
ocean is new markets untouched by competition. Companies have long engaged in head-to-head
competition in search of sustained profitable growth, they have fought for competitive
advantage, battled for market share and struggled for differentiation.
Blue Ocean Strategy argues that tomorrows leading companies will succeed not by battling
competitors, but by creating blue oceans of uncontested market space, where competition is
rendered irrelevant of companies that made competition irrelevant in their industries to elicit the
strategic logic behind Blue Ocean Strategy. The authors studied 150 blue ocean creations in 108
companies over 30 industries. The study found that 86% of new ventures were line extensions
(Red Ocean Strategy) Incremental improvements to existing industry offerings and a mere 14%
were aimed at creating new markets or industries. While line extensions did account for 62% of
the total revenues, they delivered only 39% of the total profits.

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14.0 Blue Ocean Strategy: A Case Study on ‘bkash’
bKash Limited is a subsidiary of BRAC Bank. It is a joint venture organization between Money
in Motion, LLC, USA and Brac Bank Limited Bangladesh (bKash, 2013). Its mission is to
provide affordable, convenient and reliable financial service towards the customers. Its
technology platform is Fundamo (visa) (Bangladesh Bank, 2013). It also has the Full
MobileFinancial Service permission.bKash’s mobile network partners are Robi, Grammen
Phone, Banglalink and airtel. It is the only the mobile financial service provider which has one
service menu for all the operators. It has in total 30,000 agents all over the country. Still now it
has the highest numbers of agents in Bangladesh. bKash Limited is giving the service of cash in,
cash out, send money (P2P) and payment (payment through organization or in shop). It is
offering free registration and also free balance, statement check and changing PIN offer. Rather
than the authorized agents it is also available in all Robi WICs, BRAC channel and Continental
Courier channel. Its highest amount of daily transaction limit is1, 25,000 Taka and highest
amount of monthly transaction limit is 2, 50,000 Taka. Also its monthly highest P2P transaction
limit is 25,000 taka (Bank, July 2012). Still now, bKash is the most visible mobile bank in
Bangladesh. It is running heavy advertising from the beginning. It is running its marketing
through TV advertisement, Radio advertisement, billboard, Poster, festoon, leaflet, shop pointer
etc.

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14.1 Overview of mobile banking
Mobile Banking
The massive improvement of technologies around the world brings an opportunity to improve
the technological platform of banking sector. The goal of the extending service of banks with
improve technology is to satisfy the desire of customers. One of the extending services with
modern technological advancement is Mobile Banking. In this process of banking customer are
allowed to access into the banking system in anytime from anywhere. The requirements for this
process are to have a mobile device and mobile network connection. The core benefit of this
mobile banking is to reach to the people who do not have the access in internet banking or in
normal banking procedure. It is mostly helpful for the people of remote areas (GSMA Mobile
and Development Intelligence, 2012). According to Raseda Sultana, millions of people across
the developing nations are relying on informal economic activities for their living and most of
these people are from the bottom stage of the pyramid. These mass populations do not have the
access into the basic financial services or the regular banking system. This mobile banking
brings the opportunity for these people to get the banking facility. Now the reason why “mobile
banking” is getting greater emphasize because more there are than 4 billion mobile subscribers
who represent 61% population of world. So it is the best way to reach among the biggest portion
of world population. Also, mobile banking needs less processing than general banking process. It
helps the banks to reduce cost, requires less storage facility. Mobile Banking is also better
process among all the other e-banking process. In internet banking there has the higher risk then
mobile banking due to hacking system. Also to use internet banking people needs extra skills to
use computer. On the other hand, to use Mobile Bank, customers’ needs to have the basic idea
about how to operate mobile in daily life. So to use this mobile banking a great level of
awareness is not needed to create. It is said that mobile banking is one of the best thing ever
happened in the personal finance management. Through this process customers will keep them
attached with the banking system all the time. This mobile banking is still in growing business.
In some countries mobile banking is become very much popular while in some countries it is just
in the beginning stage. Though it is in an emerging stage but already mobile banking has created
a good level of impact in world economy. (MdTaimurAhad and Laurel Evelyn Dyson, 2012)

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14.2 Mobile Banking in Bangladesh Banking
Bangladesh is 8th largest populated country in the world with around 161 million populations. In
Bangladesh, almost 31.5% populations are living under poverty (The Central Intelligence
Agency (CIA), 2013). From this huge population only 13% people have bank account. On the
other hand, there are almost 90 million mobile phone subscribers in Bangladesh. From the point
of view of Bangladesh, the expansion of e-banking is opposed by the problem of institutional,
infrastructure and regulatory problems. Absence of central networking system, unskilled people
and absence of proper policies are lacking behind the whole system. Bangladesh Bank is
developing country’s payment system but by that time all the banks are not able to improve their
ICT system. In this scenario, it’s hard to reach to mass people with current banking system. From
this plot, the concept of mobile banking emerged to reach the banking facility to the unbanked
people. People also take this system as good one as 69% people believe this “mobile banking”
has prospect in Bangladesh (Bank, July 2012) Mobile banking is a new banking concept in
Bangladesh. Bangladesh Bank is influencing banks to operate this mobile in a serious manner to
reach to the unbanked people of Bangladesh. Bangladesh Bank believes that mobile is the easiest
way to reach to the rural part of the country with the banking service.
Still now, Bangladesh Bank has given license to 23 banks to run this mobile banking operation.
Among these, 14 banks have full Mobile Financial Service permission and other 9 banks have
the permission for international remittance transaction only through mobile. (Bank, July 2012)
14.3 Infrastructure for Mobile Banking
Mobile Banking service can be provided in two different processes. One of these are Banks can
directly give the mobile banking service towards the customer. In this process banks are having
their own network system. On the other hand, in other process banks are using the 3rd party for
giving this mobile banking service. In this process banks are having only the database system
and the service providing duty is relying on the 3rd party. Now, based on these services
providing process, service can be delivered in two different ways. These are application based
(GPRS protocol) and the other one is SMS based. In most of the countries especially in the

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developing countries, SMS based mobile banking is using widely. It requires very low cost and
low bandwidth and also it is easy to understand.
14.4 Market Analysis
Mobile Financial Services (MFS) is an approach to offering financial services that combines
banking with mobile wireless networks which enables users to execute banking transactions.
This means the ability to make deposits, withdraw, and to send or receive funds from a mobile
account. Often these services are enabled by the use of bank agents that allow mobile account
holders to transact at independent agent locations outside of bank branches. MFS is still new in
Bangladesh and this report aims to capture its early development and learn lessons.
Access to formal financial services can help households to better plan and manage their lives.
MFS offers the opportunity to build another channel beyond the bank branch and ATM network
to enable millions to have easier access to the formal banking system. Bangladesh Bank aims to
build a commercially viable, competitive and safe MFS market. Bangladesh has a big market for
mobile telecom business and the industry is expanding quickly. This MFS services is given by
the mobile operators. The estimated total population of Bangladesh was 152,518,015 on 16th
July and the total numbers of active mobile phone subscribers are 92,120,000 at the end of May
2012, i.e. around 60.40% of total population use mobile phones. So MFS have the opportunity to
reach around 60.40% of total population in Bangladesh. (Bank, July 2012)
The MFS market is at an early stage of development as the newest providers are seeking to
stabilize their technology, build out agent networks and acquire new customers. This involves a
complex, sequenced set of activities that includes:
(1) Finding and training agents
(2) Marketing to bring attention to the service
(3) Acquiring customers using know‐your‐customer (KYC) and account opening processes while
at the same time helping new customers to begin to transact.
The deployments that are most active today are seeking to expand their customer bases during
2012. (Bank, July 2012) For example, BRACBank/bKash and DBBL aim are aiming for
multi‐fold growth during 2012 which could push their combined customer accounts to between 2
and 3 million within a year’s time, possiblymore. It is hoped that other providers entering the

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market might also grow and provide more alternatives and competition. It is still early and much
more will be learned about MFS in Bangladesh over the coming year.
14.5 Findings on the MFS Market Structure
The MFS guidelines and the ‘honest broker’ role taken on by Bangladesh Bank have been
instrumental in the recent growth of this sector. After several years of uncertainty, the firm move
by Bangladesh Bank to establish MFS guidelines provided a positive signal that is enabling
market growth. Bangladesh Bank has also been proactive in bridging differences between
commercial banks and MNOs, and this ‘honest broker’ role has been instrumental to the recent
rapid growth of BRAC Bank and Dutch‐Bangla Bank in this sector.
Banks and MNOs share the view that the potential for MFS lies initially with P2P, small
merchant payments and mobile top-ups. Interviews and surveys with banks and MNOs presents
a consistent picture that the expectations are for small payments to be the early drivers of MFS.
At the same time some also see the benefits of safekeeping of funds.
Importantly, banks and MNOs don’t expect large volumes of inward foreign remittances to be
received over MFS. They recognize that mobile accounts will need to have more usability before
clients will want to receive inward foreign remittances into a mobile account. Deployments
focusing on establishing mobile accounts and driving small domestic payments are the priority.

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14.6 Ability to Implement Blue Ocean Strategy
BRAC Bank/bKash and Dutch Bangla Bank are the early leaders in the market. Both Dutch
Bangla and BRAC Bank/bKash launched in 2011 and have moved to activate agent networks in
nearly all districts. They have built these initial agent networks through NGO partners or other
third party distribution companies. Both have opened several hundred thousand mobile accounts
and their transaction volumes since launch are higher than others so far. DBBL and BRAC
Bank/bKash rely primarily on making contracts with MNOs for the use of USSD channels.
The most significant efforts are currently on identifying, quantifying and negotiating mutually
beneficial partnerships between banks and MNOs. MNOs have opened up theirUSSD channels
to banks and more such agreements are being actively negotiated. These negotiations are
complicated because of several factors. One is that banks appear to have a regulatory advantage
given the clear decision for a bank‐led market. At the same time, banks tend to want MNOs to be
a vendor of wireless connections rather than equal business partners in a joint venture. MNOs
believe they have more to offer than wireless connectivity. They feel they bring distribution
power, an understanding mass market client behaviors and skills in how to manage a business’s
involving millions of users. On the other hand, MNOs may not fully appreciate the regulatory
risks or business case for the banks. For instance, MNOs may over‐estimate the float revenue
banks might gain. These differences of perception are common in other countries as well. Even
with agreements in place the further negotiation of adjustments and additions to the partnerships
will remain important for market development.
The challenge of forging partnerships is compounded by different expectation of the total size of
the MFS market and the timeline to generate an attractive ROI. Some are targeting only several
hundred thousand users, while others see the market opportunity to be tens of millions of users.
Some market players want to see a positive return on investment in a matter of 1‐2 years. (Bank,
July 2012)
Others feel that the micro‐payments business must be very large to succeed and therefore
estimate that the market may take up to 5 years to develop. The different perceptions of market

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size and timelines make the process of partnership negotiation complicated.
14.7 Performance Analysis by Porter’s Five Forces Model
From last year, the competitive environment in the mobile financing industry has become
intensely competitive, with not only constant special offers and new value added services, but
also with new and bigger entrants.The following sections describe the competitive environment
in the industry using Michael
Porter’s five forces model.
Threat of Intense Segment Rivalry
This mobile financing industry is growing very fast. Now bkash and DBBL Mobile Banking
dominated the market. This two are covering the market very fast beside this they are try to
incise their market share before more computation. But in recent days Ialami Bank Bangladesh
introduce M Cash. It could be one of main compotator for those two companies. However, the
monopoly soon came to an end in this industry.In mobile financing industry there are some
banks who are offering mobile banking those are Prime Bank, Bank Asia, Trust Bank, Dhaka
Bank, Mercantile Bank, Premier Bank, Jamuna Bank. They all are very much potential
compotators in this industry. Here this all companies are very much establishing to run mobile
banking. But they are not concentrating in this site so it’s easy to bkash and DBBL for capturing
the market.They also have TVC, Billboard, Newspaper adds to promote their services. Beside
this DBBL is doing this kind of branding to promote their mobile banking services.
Now in this mobile banking industry bkash is the market leader, (Wadud, 2013) but growth rate
is very high in this industry. bKash is very much aware about this that’s why they are capturing
the market rapidly. Beside this they introduce their services in every possible scope they
have.After coming in to the industry Islami Bank’s M cash is doing well. M cash is doing
aggressive marketing in terms of other companies. The visibility of the company is quite
good.Since BRAC Bank introduces bKash in this industry they are doing aggressive marketing.
Now they are covering 71% of market share with huge number of agents. (Wadud, 2013)So, the
rivalry among existing competitors is moderate.

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Threat of New Entrants
Bangladesh Bank introduces a new rule that every Bank should have mobile banking service.
So it is not that much hard to new entry in this industry. But beside this Bangladesh bank has
some regulation for new entrees. Existing companies have created brand positioning and
economies of scale in coverage- that also act as entry barrier. In addition the price battle between
the competitors in service charge. So potential direct entry to the industry is relatively restricted
at the moment, due to control over licenses. However, companies are finding other ways to enter
the industry, i.e. through merging with existing operator’s mobile financing industry are low.
Threat of Substitute Products
Mobile Banking is a high-tech industry and the substitutes that would replace the services of
today are strongly related to the factor of innovation. In case of Bangladesh mobile telecom
banking industry, substitutes exist in the form of government post office and some However,
there is no strong competitive substitute for mobile telecom industry as the existing alternatives
are either nearly obsolete or in embryonic stage and thus poses very carrier services little threat
to the industry.
bkash is only company in the country who provide services in height agents point and ATM
booth. However, the substitute services are not much strong so the companies are not giving high
concentrate in substituteSo, the threat from substitutes is weak in Bangladesh.
Threat of Buyers Growing Bargaining Power
There are mainly 3 mobile banking operators in Bangladesh and they offer almost homogenous
services which have low switching costs between operators and thus has provided buyers with
extremely high bargaining power. The bargaining power of buyers in this industry is moderate.
With the exception of remote-area customers who have no alternative service available in their
vicinity.
Bargaining Power of Suppliers
The bargaining power of suppliers in the mobile industry varies depending on the brand name
and strategic importance of the network as well as the size of the Company, such as Grameen
phone, Banglalink, Robi, Citycell, Teletalk in the mobile banking industry is that type of
suppliers who enjoy strong power in the industry. On the other hand there are many potential
suppliers and vendors in mobile banking industry e.g. various agents, merchants such as aarong,

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agora, bata and others beside this are major suppliers of telecom equipment in Bangladesh the
industry is moderate to weak.
14.8 SWOT Analysis
To understand the business environment of a particular firm, we need to analyze both the general
environment and the firm‘s industry and competitive environment. One of the most basic
techniques for analyzing firm and industry conditions is SWOT analysis. It is a widely used
technique through which managers create a quick overview of a company‘s strategic situation.
Strengths
bKash Limited:bKash has always been committed to providing quality services. Its
strengthsinclude- it‘s the market leader, it has got skilled & dedicated workforce, strong financial
position wide range of product and product innovation skills, highest reach in the country,
building brand image and reputation in the industry, strong company culture, customer care.
DBBL: The strength of DBBL lies in it’s in its controlling system. They have a mobile
bankingoffice in every sub-district all over the country. They have a good number of agent point
and merchant account. There controlling system is main strengths along with brand name.
Weaknesses
bkash: The weaknesses of bkash are understand people about the service, facing
challengesregarding branding , Sometimes system is down, conflict management skills for
solving regulatory problems, poor leadership development from local talents for top level
position, poor negotiation & conflict management skills for solving regulatory problems.
DBBL: The weakness of DBBL is theirnumbers of agent’s .They also haveone of the
lowestnumber of merchants account. There branding is very week, they don’t have any billboard
whereas bkash have 72 billboard in all over the country. (Wadud, 2013) In agent point there
pointer is less visible then bkash one.

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Opportunities
bkash: Opportunities of bkash is huge in Bangladeshi market. Because the total number ofactive
mobile phone subscribers are 92,120,000 at the end of May 2012 in Bangladesh. All of the
mobile phone subscribers are the potential target market for bkash. Beside this bkash is leading
the market so they have more opportunity then other.
DBBL:DBBL has 2
nd
place in this MFI and this industry has huge number of potential
clientsuntouched. If DBBL want they can increase their customer very fast. Beside this they
have huge opportunity for marketing. By this they can promote their product very well.
Threats
bkash: One of the main challenges stems from the perception of technology maintained bylow
income users. For example, many users mistakenly think that they require advanced skill to use
the technology. A similar issue arises in that users often think that advanced
English is required to use bKash. So it’s really hard to convince low income users about the
invisible money concept.
DBBL:The main threat for DBBL is the rapid growth of bkash. From previous analysis
bkashand DBBL started their journey from same time but now bkash has71% and DBBL has
24% market share. If it is continue at this rate sooner bkash capture almost all the market.
Besides this mobile banking is a complex system for uneducated people. But their main targeted
people are uneducated. So create awareness among the rural people about the mobile banking is
another big threats for DBBL.

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15.0 bkash: Implementing Blue Ocean Strategy
Origin
BRAC Bank was founded in 2001 by the large development organization BRAC. While BRAC
Bank went public after its first three years in operation it remains affiliated with the broader
BRAC group. A third generation bank, BRAC Bank has built its profile based on a core business
of lending to the SME market, but added more retail and corporate work in recent years.
In 2011 BRAC Bank launched a 51% owned subsidiary called bKash combined with an
investment from the USA based Money in Motion. Bangladesh Bank granted permission to
BRAC Bank and bKash jointly to operate the MFS business. The MFS guidelines specifically
allow banks and their subsidiaries to carry out the MFS business BRAC Bank/bKash launched its
operations in July 2011 and its initial MNO partner was Robi. In January Grameen Phone (GP)
opened a USSD channel to bKash opening the service to GP subscribers. BRACBank/bKash’s
service is delivered over the Fandom platform initially developed in SouthAfrica which has since
been acquired by Visa. BRAC Bank/bKash has agents in all districts of Bangladesh and its
aspiration is to be a large scale provider of MFS reaching tens of millions of Bangladeshis in a
few years’ time. BRAC Bank/bKash are cautious that the service would not be profitable for
another 4‐5 years. BRAC Bank/bKash has also received a $10 million grant from the Bill and
Melinda Gates Foundation and technical assistance from Shore Bank International to support the
launch of its MFS services. BRAC Bank/bKash also partners with BRAC to identify and train
new agents in addition to receiving agents from Robi and also searching for agents directly.
From BRAC Bank/bKash perspective, the main challenge is to establish sound commercial
agreements with MNOs.The other challenge is to motivate agents and clients to begin to use the
service more actively. BRAC Bank/bKash believes building the business will take more time,
scale and awareness building.DBBL has long been a strong advocate for the use of technology in
banking. Along with its 113 branches, DBBL has been active building a wide payments
infrastructure with 5,000ATMS and 4,000 POS terminals, 2.3 million debit cards, and an Internet
Payment Gateway.DBBL launched its MFS service branded “DBBL Mobile” in March 2011
using a technology platform from an international vendor called Sybase 365. Presently DBBL
operates this as a separate platform from its core banking system, but the two systems can be
linked in the future. This platform uses various technologies (SMS, IVR, and USSD) to open
accounts and process payments. The main service is a menu driven service accessed through
USSD channels provided under agreements with Airtel, Banglalink, Robi,Teletalk and GP.
DBBL also offers an SMS/IVR based service for Citycell subscribers. DBBL makes its services

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available through a network of 3,181 agents provided by a combination of Banglalink, Citycell,
Airtel, and UISC8. But the largest number of agents DBBL acquires itself through third party
distributors. In total DBBL reports agents in 61 districts serve a total of 172 thousand accounts.
Dutch‐Bangla Bank sees the main challenges in establishing stable commercial relationships to
use the wireless networks of MNOs. It also sees profitability and revenue in the early stages as a
major challenge because the revenues are not sufficient to provide the income necessary to
agents to build the business. An additional challenge is maintaining quality and covering the high
cost of KYC with large numbers of new accounts being opened. (Bank, July 2012)
15.1 Subscribers Analysis
bkash Limited is at present leading the industry with around 3 million subscribers out of a total
market size of approximately 4.75 million subscribers as of March 2013. DBBL mobile banking
has 1 million subscribers in the network and the second position in the industry. Trust Bank, M-
Cash and other MFC is not that much strong to compete with bKash and DBBL. They in total
have around .75 million subscribers as of March 2013.
Growth rate of subscribers from March, 2012 to March, 2013 are given below:
The result of the analysis is interesting as it is a common perception bkash has the highest
subscriber growth rate. We can see that DBBL is continuously growing faster than bkash but
they reach 1 million subscribers whereas bkash reach 4 million subscribers with in same time
frame. Here we can see growing rate of bkash slowly increasing then DBBL but the number of
subscriber is very much high.

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15.2 Analysis on Branding
In mobile financing industry companies are not those much aware about the branding because
the entire mobile financing service provider is under any BANK. Beside this it seems that bkash
and DBBL mobile banking are far aware about branding then others. This two service provider
shown uniqueness,Emotional Connections and Consistency in there branding. In bellow we are
analysis about their branding in terms of some core branding characteristic.
Visibility
This is one of the core requirements for any branding, without proper visibility level the branding
is not profitable. If we talk about bkash branding it is more visible then other brand. Such as
bkash have 73 billboards all over the country and those are in well visible label. Beside this
DBBL have 500 boards in every sub-District in Bangladesh, but those are not in good visibility
level.
bKash Billboard DBBL Board
In the picture we can see the bkash one is more visible then the DBBLs one. But DBBL cover
more area then bkash by their small board which has less visibility level. In the area where bkash
don’t have any billboard they cover that area by wall painting.

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Uniqueness
One of the most important sites of any product or service branding is its uniqueness. If we see
the branding of bkash and DBBL, both the company tries to be unique in their branding. Beside
this if we compare this two then bkash branding is more unique then DBBL. bKash have boat
branding, Car Sticker branding, Drama Branding, on the other site DBBL try to Branding in a
traditional way newspaper advertisement and TVC. In bellow I show some picture of unique
branding of bkash
bkash Drama Boat Branding Bikoshito 3D

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Target Audience
In this industry the main target audiences are rural and low income people in our country. MFS
try to provide banking service to the people who are usually not interesting in banking. So that,
the company is branding there product to the target market.If we see the all TVC of bkash and
DBBL then made a scenario of rural people. Beside this bkash is more advance then DBBL
they are targeting urban people also by providing payment service.
Emotional Connections:Emotion is main way to attract the target audience by branding.Some
TVC of bkash and DBBL is related to emotional activity but bkash is doing some extra to hit the
target market. In addition with TVC bkash have some documentary on some successful people
who are benefited by the bkash services. Beside this in recent time bkash introduce a new event
which is related to the direct target market. The main picture of that event is given bellow:

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In this way bkash is trying to capture the target market by emotional branding. But DBBL is not
giving any extra effort in their emotional branding.After analyzing the branding activity of these
two companies we can find that bkash is far ahead then DBBL, it also reflects in their market
share and subscriber growth rate.
15.3 Three Factors Behind bkash Successful Implementation of BOS
Even though Bangladesh’s central bank has approved more than 20 licenses to offer mobile
financial services, more than 80 percent of transactions are through a single company—bKash
Limited. bKash launched in the second half of 2011, grew to 2 million accounts by the end of
2012, and shot up to 11 million registered accounts by the end of 2013. Unlike large mobile
money businesses in other countries, bKash is not a mobile network operator (MNO) and did not
have an existing customer base to which it added mobile financial services. bKash acquired each
client on its own.
Three factors have combined to drive bKash’s fast start:
1. A specialized organization built to deliver mobile financial services
2. A shared vision for scale among a diverse investor group
3. An enabling and flexible regulatory environment
On their own these three factors are not uncommon, but in this case they combined to drive
bKash’s fast start. This Brief provides background on bKash and explores the three factors
driving early growth.

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A specialized organization built to deliver mobile financial services
bKash is purpose built for what it does. BRAC expects bKash to have its own identity and build
its own business. One important distinction from other companies in which BRAC invests is that
the minority investors have significant influence. The minority investors bring specialized skills
and experience that have helped create the business, including providing the CEO, Kamal
Quadir. The role of the minority investors is balanced with BRAC Bank appointing the chair of
the bKash board and other directors.8 Although other banks in Bangladesh offer mobile financial
services, BRAC Bank is the only one so far to establish a special-purpose company for mobile
financial services, and beyond Bangladesh this is rare for banks or MNOs. The special-purpose
organization establishes a high level of focus on mobile financial services alone, in contrast with
banks that often rotate staff in and out of their mobile financial service departments. bKash staff
do not come in large numbers out of banking but from other industries and commercial
backgrounds. bKash is a standalone business that is expected to drive its own financial
performance whereas in many bank environments mobile financial services are treated as an
alternate delivery channel to serve the needs of other parts of the bank, for instance, to collect
deposits for the retail business. Bank units focused on mobile delivery channels must often
respond to the needs of other parts of the bank rather than focus on building their core business.
BRAC has a track record of creating special-purpose businesses, with some 18 in its portfolio,
that are expected to be accountable for their own performance. This approach has made bKash’s
existence more difficult since it cannot assume or expect to gain business from other parts of
BRAC. For instance, there have been minimal links (so far) to making salary payments,
collecting loans, or linking to any related companies, including BRAC Bank. These links could
increase in the future, but so far a “sink or swim” imperative has required bKash to push hard to
succeed on its own. This has been further reinforced by the minority investors who have injected
risk capital and stand to lose or gain on bKash’s mobile financial services performance. bKash
has developed its own culture designed to fit the kind of business it operates. This different
mindset
A shared vision for scale among a diverse investor group
bKash did not pilot test, rather it aimed to scale from launch and took a “learn as you do”

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approach. The push for scaling an agent network and a large customer base has been difficult,
and bKash has had to make many adjustments to its business along the way. For instance, the
shift from the BRAC-acquired agents to direct recruitment required a new distribution team and
a re-design of the distribution incentives. Even while it made this fundamental correction bKash
continued to grow, changing on the fly. The scale mentality has been reinforced by bKash’s
funding and investors. Money in Motion initially invested $5 million. And even before bKash
had much of a track record the Gates Foundation provided a $10 million grant that included
funds to expand as well as source technical assistance—for example, linking bKash to expertise
on agent network management from Kenya.9 More recently, IFC and the Gates Foundation have
come in as minority investors. Each investor has reinforced the drive for national scale.
An enabling and flexible regulatory environment
The launch of bKash in July 2011 came on the heels of Bangladesh’s central bank (Bangladesh
Bank) issuing guidelines (http://www.bangladesh-bank.org/) on mobile financial services that
provided the certainty and clarity needed for bKash and others to invest and build a business.
Bangladesh Bank was comfortable issuing a license to BRAC Bank to launch bKash, since the
bank was a well-managed commercial bank the regulator knew well.
The idea of regulation that would allow nonbanks and particularly MNOs to launch their own
services had first been debated in 2008, but Bangladesh Bank did not feel comfortable at that
time to allow MNOs to lead. However, in addition to allowing banks to offer mobile financial
services, the 2011 regulations included a clause that allowed banks to set up subsidiaries
specifically for this purpose. This allowed conventional banks to establish separate companies in
partnership with funders with relevant experience and, importantly, the risk appetite and
entrepreneurial bent needed to make the business succeed. This nuanced light-touch regulation
provided the environment that allowed bKash to be an operationally new and different kind of
business while still being regulated under the umbrella of banking norms. As of yet, no other
bank subsidiaries have been established for mobile financial services in Bangladesh, but the
possibility remains.
The regulators made another important decision early on. When bKash launched it had an

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agreement to link only into the subscribers of one of the four large MNOs. bKash as well as
other bank-based mobile financial service providers sought access to unstructured supplementary
service data (USSD)10 channels of all the major MNOs, and Bangladesh Bank actively
encouraged mobile operators to open up to mobile financial service providers. Eventually the
telecommunications regulator also pressured mobile operators to provide access. With this
obligation and with Bangladesh Bank’s support, bKash was able to enter revenue-sharing
agreements to access a USSD gateway with all four big MNOs, providing access to over 98
percent of Bangladesh’s 100 million mobile phone subscriptions. bKash could reach the
customers of nearly all MNOs within its first year of operations. While this has been unpopular
with MNOs who wanted to offer mobile financial services themselves, it has been a crucial
factor in bKash’s fast start. bKash had the communications limitations on who it could reach
with its service removed and established an industry norm for revenue sharing with MNOs. This
stands incontrast to many early-stage MNO deployments that often reach only their own voice
subscribers early on.
16.0 Conclusion
bkash is a success story in Bangladesh, successfully implementing blue ocean strategy. The
company use both ‘cost leadership’ and ‘differentiation’. They are success in other sense, DBBL
mobile banking is the first mobile banking system but bkash beat them and take the advantages
both form business profitability and market share. The company authority understands the
potentiality of the market and they uniquely create the portfolio. The portfolio includes the whole
leadership gamut from Strategy Formation, Strategy Implementation, Organizational Change and
Staff Motivation. The portfolio of inter-related concepts and methodology allowing bkash to
break away from head-on competition in order to create and maintain uncontested market spaces
of high customer value. Value Innovation is the first component of BOS, and provides the
strategy formation framework. Value Innovation is a highly pragmatic, visual methodology that
allows companies to challenge industry boundaries and taken for granted assumptions and in the
process discover highly distinctive and successful strategies. Value Innovation sets the stage for
the rest of the Blue Ocean Strategy concepts. In the process, bkash make their competition
irrelevant and discover unoccupied. They implement it and make a road for others who wish to
use Blue Ocean strategy in Bangladesh.

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17.0 Webliography/Bibliography
 https://www.bkash.com
 www.google.com
 www.ask.com
 www.slideshare.com
 www.assignmentpoint.com
 www.scribd.com
 Bangladesh Bank. (2013, 5 20). Retrieved 4 25, 2013, from
bangladeshbank:www.bangladesh-bank.org
 Bank, B. (July 2012). Mobile Financial Services in Bangladesh. Policy Paper , 15-16.
 bKash. (2013, 1 1). Company Profile. Retrieved 5 23, 2013, from
bKash: http://www.bkash.com/about/company-profile
 GSMA Mobile and Development Intelligence. (2012, 9 22). GSMA Mobile and
DevelopmentIntelligence. Retrieved 4 2, 2013, from
mobiledevelopmentintelligence.com:https://mobiledevelopmentintelligence.com/
 MdTaimurAhad and Laurel Evelyn Dyson, V. G. (2012). An Empirical Study of Factors
 Influencing the SME’s. Journal of Mobile Technologies, Knowledge & , 25,26.
 Michael U. Klein, C. M. (2011). Mobile Banking and Financial Inclusion: The
Regulatory Lessons. World Bank Policy Research Working Paper No. 5664 , 5-
10.

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 The Central Intelligence Agency (CIA). (2013, 5 20). The Central Intelligence
Agency. Retrieved 4 22, 2013, from cia.gov/index.html:
https://www.cia.gov/index.html
 Wadud, M. A. (2013, 3 25). market condition of bkash over the year. (Nur-E-
Alam, Interviewer)
 www.feedblitz.com , “Creating Blue Oceans” 26 november2006.
 www.12manage.com , “Blue Ocean strategy” 4 june2007.
 www.wikipedia.com
 www.gamasutra.com , “Nintendo’s Kaplan Discusses 'Blue Ocean' Strategy”February 9,
2006.
 www.sciencedirect.com , “A strategy for third-party logistics systems: A case analysis
using the blue ocean strategy” 24 May 2007.
 www.emergic.org , “TECH TALK: Blue Ocean Strategy” May 1, 2006.
 www.blueoceanstrategy.com , “How we can develop a Blue Ocean Strategy for your
organization” January2007.
 Blue Ocean strategy by W Chan Kim and Renee Mourbogne
 Harward Business Review, “A Conversation with W. Chan Kim and Renee Mauborgne
authors of “BLUE OCEAN STRATEGY”

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