Präsentation Kolloquium Bachelorarbeit - Beispiel

Bachelor Thesis Colloquium
Strategic Patterns in Buyer Value Creation Behind the
Implementation of the Blue Ocean Strategy
20. June 2012
Michael Fröse
BA 09 in International Business / Management Consulting
Student-No.
Advisor:

Table of Contents
• Relevance of Research Question
• Concept of Blue Ocean Strategy
• Methodology
• Results
• Conclusion
• Backup
Colloquium / 20.06.2012 2

The Blue Ocean Strategy as a new concept needs further
research
Relevance of the Research Questions
3Colloquium / 20.06.2012
Are there any strategic patterns in buyer value creation behind the implementation of the
blue ocean strategy in the cases of Nintendo and Nespresso?
Relevance of Research Question
• Success of companies like Nintendo and Nespresso needs explanation and analysis
• Blue Ocean strategy as a new theory (2005) to achieve competitive advantage
• Only little academic literature available
• Success factors of the blue ocean strategy
• Research on the reproducibility of the blue ocean strategy concept
• Special factors underlying the implementation
• Triggers in buyer value that are exploited to successfully implement the blue ocean strategy
Research Question

Table of Contents
• Methodology
• Results
• Conclusion
• Backup

Value Innovation as the Heart of the Blue Ocean Strategy
Aims at Creating Superior Buyer Value
Concept of Value Innovation
5
1 Kim and Mauborgne (1999: 43)
2 Kim and Mauborgne (2005: 13)
Colloquium / 20.06.2012
“Value innovation makes the competition irrelevant by offering fundamentally new and
superior buyer value in existing markets and by enabling a quantum leap in buyer value to
create new market spaces”1
Value Innovation
• Companies pursue new value for customers and focus on
customers instead of focusing on competition2
• Focus on customer value leads to changes in industries
Value Innovation Concept
• Strategic pricing should be pursued by companies
• Long-term success of blue oceans needs operational
measures to increase efficiency, for instance LEAN
management tools because blue oceans turn into red
oceans over time

Table of Contents
• Methodology
• Results
• Conclusion
• Backup

Case Study Research as the Appropriate Methodology to
Examine Strategic Patterns in Buyer Value Creation
Research Design
7
1 Flyvbjerg (2011: 301)
2 Merriam-Webster dictionary definition (2012a)
Research Design
Case Study defined:
“an intensive analysis of an individual unit (as a person or community) stressing developmental factors in
relation to environment“ 1,2
Individual Units
Developmental Factors: Changes in
Buying Behaviours/Buyer Values
Buyer Utility Map
In relation to environment: Consideration
of competition
Strategy Canvas

• The before and after situation for each case isolated (with competitors) from each other is
considered by constructing the strategy canvas and the buyer utility map
• This provides a deep understanding of the mechanisms of the blue ocean strategy
• Moreover, evidence for the implementation is generated by the comparison with the
competitors
• For the strategy canvases different competing factors were analysed and evaluated
Application of Blue Ocean Strategy as an Assumption for
the Research Design
Assumptions and Procedures
Assumptions
Use of blue ocean strategy in both cases
Nintendo unlocked the
market for casual gamers
Nintendo unlocked the
market for high price
coffee
Procedure for Case Studies

Table of Contents
• Methodology
• Results
• Conclusion
• Backup

Sixth Console Generation shows Nintendo‘s Position in
Relation to Competitors
Results (1/4)
10
1 Zackariasson and Wilson (2010: 139-140)
2 Schilling (2003: 17)
• Sixth Console Generation (128bit-generation) chosen to represent “before situation” based on the fast
product life cycles in the console gaming industry1
• The biggest player in sixth generation: Nintendo, Sony, Microsoft2
Case Study 1: Nintendo
Strategy Canvas Sixth Console Generation
GameCube
Xbox
PS 2
Buyer Utility Map

New and Clear Changed Strategic Position of Nintendo after
the Implementation of the Blue Ocean Strategy
Results (2/4)
11
1 Marketing: Ziesak (2009: 74)
• Seventh Console Generation represents “after situation”
• Sony and Mircrosoft competed at the technical level with each other
• In this generation Nintendo implemented the blue ocean strategy
• Nintendo aggressively approached their new target group1
Strategy Canvas Seventh Console Generation
Wii
Xbox 360
PS 3
Buyer Utility Map
Case Study 1: Nintendo

Coffee Market Shows Two Players with Distinct Value
Propositions
Results (3/4)
12
1 Nespresso brand: Gaillard (2000: 296-297)
2 Slywotzky (2011)
• Filter coffee and coffee pads represent coffee industry before the implementation of the blue ocean
strategy by Nespresso
• Although Nespresso was founded in 1986, success came in 20061,2
• Differing strategic profiles of the types of coffee
Strategy Canvas Old Coffee Industry
Filter coffee Coffee pads
Buyer Utility Map
Case Study 2: Nespresso

Nespresso Added New Features to the Market and
established a Clear High-Class Position
Results (4/4)
• New value curve shows some parallels in the pads value curve and the value curve of Nespresso based
on technical commonalities
• Marketing was heavily pushed by Nespresso
• Totally changed value propositions allowed Nespresso to unlock the blue ocean
Case Study 2: Nespresso
Strategy Canvas New Coffee Industry
Filter coffee Coffee pads Nespresso
Buyer Utility Map

Comparison of Cases Show Clear Patterns in Buyer Value
Creation with a Focus on Fun, Image and Marketing
Strategic Patterns
Case Study Results Compiled
• Beside the factors regarding the product,
the market structure and other factors
were considered
• Both cases had a oligopolistic market
structure
• Buyer value in “customer productivity”
and “convenience” was evident in both
cases
• “Convenience” as buyer value was
found in both cases after implementation
– this value prop. remained the same
• Strongest convergences in buyer value
were found in the lever of “fun and
image” with one in each case
• Marketing was strongly pursuit by both
companies to implement the BOS
• Pricing strategy differs in the cases
strongly
Results explained

Table of Contents
• Methodology
• Results
• Conclusion
• Backup
Colloquium / 20.06.2012 15

Evident Strategic Patterns Were Found in the Cases and
Support the Research Question
Conclusion
• Theory showed the divergences of the structuralistic and reconstructuralistic
approaches to achieve CA
• Value Innovation is the core of the BOS and aims at creating superior buyer value
• Strategy canvas and buyer utility map are used to show the changes in the cases
• Before the BOS Nintendo competed in an undifferentiated manner. The value prop.
“convenience” was not unique. The overall position can be regarded as cost leader
• After the BOS Nintendo took heavy marketing actions and introduced the motion-
controlled gaming. “Fun” for casual gamers was established as a unique value prop.
• Coffee industry before Nespresso is rather simple with no exceptional value prop. for
customers. “Customer productivity”, “simplicity” and “convenience” were found
• Nespresso had heavy marketing actions and strongly pushed the value prop. of “fun
and image”. Other factors such as “customer productivity”, “convenience” can be
attributed to the technical aspects
Theory
Case
Studies
• Indeed, strategic patterns are evident in these cases. Before the BOS both companies
acted in an oligopolistic market structure. Value prop. were “customer productivity“,
“convenience“. Moreover, low marketing efforts were evident
• Value prop. of “convenience” was transferred to new situation. Strong convergence
found in “fun and image” and marketing actions. Price levels showed strong
differences
Answer
RQ

Table of Contents
• Methodology
• Results
• Conclusion
• Backup
Colloquium / 20.06.2012 17

Concept of Thesis
Structuralism vs. Reconstructuralism
Competitive Advantage
Strategy Canvas Buyer Utility Map
Blue Ocean Strategy
Case Studies
Value Innovation
Nintendo Isolated Nespresso Isolated
Comparison Before
Comparison After
Discussion
Strategic Patterns

Industry conditions for reconstructuralistic approaches
19
1 (Kim and Mauborgne 2009: 74)
• If the industry is attractive and companies have the corresponding
resources and capabilities, generic strategies and structuralistic thinking
might work
• If the industry is less attractive structuralism works if companies possess
resources to outperform competitors1
• If the industry is unattractive and risks are high although resources and
capabilities are owned by companies strucuralistic approaches might be
the wrong choice
• An industry with well positioned competitors and no distinct resources
pose opportunities for reconstructuralism
• Industries with no competitive advantage should be decided on the notion
of strategic mindset
Industry
Structure

Roots of the Blue Ocean Strategy
20
1 Chan and Mauborgne (2005: 209-210)
Theory of Endogenous
Growth
New Growth Theory
• Theory stating that economic growth comes from within
an economic system
• Researchers were Schumpeter (1934), Romer (1994) and
Grossman and Helpman (1994)
• Lack of knowledge of how process of entrepreneurship
works and can be reproduced1
• Theory aiming at the explanation of replication of
innovation
• Tries to explain how innovation can be reproduced
systematically1
Reconstructuralism

Eliminate-Reduce-Create-Raise Framework/
Six Paths Framework
E-R-C-R Framework Six Paths Framework
Path 1: Look across alternative
industries
Path 2: Look across strategic groups
Path 3: Look across the chain of
buyers
Path 4: Look across complementary
product and service offerings
Path 5: Look across functional or
emotional appeal of buyers
Path 6: Look across time

Competition Factors- Console Gaming (1/2)
Price • Different pricing strategies are an important indicator for the target group
of a product (Lui 2010: 429)
Performance • Target group was hard-core gamers the performance of the product was
important (TechMediaNetwork.com 2012) - homogeneity assumed
Marketing • Research showed positive long-term effects of advertising on sales of
products (Ataman et al. 2010: 871)
Additional
Features
• More features offer an enhanced value the customers could gain out of a
console, therefore, it is in scope of consideration (Taylor 2005: 1)
Online Gaming • Network effect - creates a dependence of the value of a product for
customers and the number of users (Wang, Chen & Xie 2010: 1)
Number of
Games
• Indirect network effect - when the increasing number of consumers
increases the amount of complementary products - (Gretz 2010: 81-82)
Time to Market • First mover advantage - (Carpenter and Nakamoto 1989: 289)

Competition Factors- Console Gaming (2/2)
Sold Number
of Games
• Analogue to factor number of games
Attractiveness
for Casual G.
• Change/Widening in target group is important to consider when analysing
the implementation of the blue ocean strategy
Motion-
Controlled G.
• New technology allowed a new gaming experience for the users -
(Verganti 2011: 116)

Competition Factors- Coffee Industry (1/2)
Price • Nespresso’s unique pricing strategy needs opponents
Ease of buying • Convenience aspect for customers - often times enhances buyer value
(see theory)
Ease of
preparation
• See above
Preparation
time
• See above
Fun • Nespresso added fun, therefore, important to observe level of fun before
BOS
Consistency
of Taste
• Nature of product
Cost of
Equipment
• Importance of pricing

Competition Factors- Coffee Industry (2/2)
Marketing • See explanation for console gaming industry
Freshness
after opening
• Technical features provide Nespresso with this factor, therefore,
important to include
Different
Flavours
• Heavy marketing of different flavours by Nespresso
Club • Unique factor added by Nespresso

Limitations of Research
• Different industries might be compared carefully à patterns might be questioned
• Success might be attributed to heavy marketing actions
• Focus on entertainment products and consumer goodsà careful generalization
• Qualitative nature should be done on a more quantitative basis

Bibliography (1/2)
• Ataman, M., et al. (2010). The Long-Term Effect of Marketing Strategy on Brand Sales. Journal of Marketing
Research (JMR). 47 (5), 866-882.
• Carpenter, G. S., & Nakamoto, K. (1989). Consumer Preference Formation and Pioneering Advantage. Journal of
Marketing Research (JMR). 26 (3), 285-298.
• Flyvbjerg, B. (2011). Case Study. In N. K. Denzin & Y. S. Lincoln (Eds.), The Sage Handbook of Qualitative Research
(4th ed., pp. 301-316). CA: Thousand Oaks.
• Gaillard, J. P. (2000). Changing the Strategy at Nespresso: An Interview with Former CEO Jean-Paul Gaillard.
European Management Journal. 18(3) (3), 296-301.
• Gretz, R. T. (2010). Console Price and Software Availability in the Home Video Game Industry. Atlantic Economic
Journal. 38 (1), 81-94.
• Grossman, G. M., & Helpman, E. (1994). Endogenous Innovation in the Theory of Growth. Journal of Economic
Perspectives. 8 (1), 23-44.
• Kim, W. C., & Mauborgne, R. (1999). Strategy, value innovation, and the knowledge economy. Sloan management
review. 40 (3), 41-54.
• Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make
competition irrelevant. Boston: Harvard Business Press.
• Liu, H. (2010). Dynamics of Pricing in the Video Game Console Market: Skimming or Penetration? Journal of
Marketing Research (JMR). 47 (3), 428-443.
• Merriam-Webster Incorporated. (2012a). case study. Retrieved 21/04/2012, from http://www.merriam-
webster.com/dictionary/case%20study.
• Romer, P. M. (1994). The Origins of Endogenous Growth. Journal of Economic Perspectives. 8 (1), 3-22.
• Schilling, M., A. (2003). Technological Leapfrogging: Lessons from the U.S. video game console industry. California
Management Review. 45 (3), 6-32.
Colloquium / 20.06.2012 27

Bibliography (1/2)
• Schumpeter, J., A. (1934). Theorie der wirtschaftlichen Entwicklung. Eine Untersuchung über Unternehmergewinn,
Kapital, Kredit, Zins und den Konjunkturzyklus [Theory of the Economic Development. A Study of Entrepreneurial Profit,
Capital, Loan, and the Economic Cycle] (4th edition). Berlin: Duncker & Humblot.
• Slywotzky, A. (2011). Triggering Demand: How Coffee-Maker Nespresso Turned Drips Into Gushers Fast Company.
Retrieved 18/04/2012, from http://www.fastcompany.com/1781304/triggering-demand-how-coffee-maker-nespresso-
turned-drips-into-gushers.
• Taylor, J. (2005). It´s a gaming console!It´s an entertainment Hub! Fast Company. (101), 41.
• TechMediaNetwork.com. (2012). 2012 Best Video Game Console Comparisons and Review. Retrieved 19/04/2012,
from http://video-game-consoles-review.toptenreviews.com/.
• Verganti, R. (2011). Designing Breakthrough Products. Harvard Business Review. 89 (10), 114-120.
• Wang, Q., Chen, Y., & Xie, J. (2010). Survival in Markets with Network Effects: Product Compatibility and Order-of-
Entry Effects. Journal of Marketing. 74 (4), 1-14.
• Zackariasson, P., & Wilson, T., L. (2010). Paradigm shifts in the video game industry. Competitiveness Review. 20
(2), 139-151.
• Ziesak, J. (2009). Wii Innovate- How Nintendo created a New Market through the Strategic Innovation Wii. Munich:
GRIN Verlag GmbH.

Präsentation Kolloquium Bachelorarbeit - Beispiel

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Präsentation Kolloquium Bachelorarbeit - Beispiel

Similar to Präsentation Kolloquium Bachelorarbeit - Beispiel (20)

Recently uploaded

Recently uploaded (20)

Präsentation Kolloquium Bachelorarbeit - Beispiel