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

1. Blue Ocean Strategy
The science of making competition
irrelevant

2. What is blue ocean strategy about?
•
Based on the best selling books HBR press – translated
in over 41 languages
•
It’s a culmination of a decade long study by Renee
Mauborgne and Chan Kim , who studied over 150
strategic moves spanning more than 30 industries over
100 years (1880-2000)
•
BOS focuses on making competition irrelevant by
creating uncontested marketspaces.
•
BOS covers both strategy formulation and strategy
execution.
•
BOS offers a set of methodologies, tools and
frameworks that makes it a structured, learnable
system.

3. Blue Ocean Strategy
In Today’s webinar
In the concluding part
Search Risk
4 Actions
framework
Planning
Risk
6 Paths
Framework
PMS
Framework
BUM Model
BOS Tools &
Framew
orks
Strategy
Formula
tion
Scale Risk
Business
Model Risk
Non Customer
Analysis
Strategy
Executio
n
Organizatio
nal Risk
Manageme
nt Risk

4. The Color - Red and Blue

5. A quick reality check of how red or blue your
company is?
Does your company feel that
they are facing increasing
competition from rivals?
Does your company depend on
offering deeper and deeper
price discounts to make sales
happen?
Is your company increasing
advertising and marketing
spends every year, yet the
impact of these efforts keeps
falling?
Is your company focusing on
cost cutting and quality control
at the expense of growth,
innovation, and brand
creation?
Do people in your company
blame slow economic and
market conditions most of the
time?
Is your company seeing
outsourcing and job cuts as a
way to regain competitiveness
and profitability?
Does your company
management sees mergers
and acquisitions as one of the
principal means to grow in
future?
Does your company think that
it easier to follow competitors
than to break away from
them?
Is your company now starting
to worry that the marketplace
has become crowded?
Domestic , International , Small player,
Large Player, MNC’s, basically scared of
everybody
if your answer to three or more questions is YES - You are in Red Ocean

6. The Red Ocean
• A Marketplace where companies compete with each other
on a daily basis.
• When companies compete, it becomes battle field for :
•
•
•
•
Acquiring market shares
Increasing revenues
Maximization of profit by reducing costs and value
Basically beating competition consumes most of the effort, time and
resources
• Such companies are called Red Ocean companies.
Such companies fight for competitive advantage with two
strategic weapons - Differentiation and Price

7. Cost and Differentiation Dilemma
But there can be only one price
leader in an Industry
And differentiation would mean
higher cost.
• More the differentiation – Higher the segmentation
• Higher the segmentation – lower would be the market size.

8. Also The Size Of The Market Pie Is Fixed
i.e almost all the companies in an industry are competing for an increased slice of the same pie
But the real objective of business is not fighting – its about
creating profit and value

9. “Skillful leaders win wars without any fighting”
------ Sun Tzu
‘ Art of War’

10. Brief: Blue ocean strategy
•
Blue ocean strategy builds new businesses where
none existed
–
–
–
•
•
•
By tapping the untapped market space
By creating demand
Thereby making competition irrelevant
Blue ocean strategy is about simultaneous pursuit of
value innovation and low cost
Value innovation is defined in terms of value/ utility
for customer
Blue ocean markets are usually more profitable
than markets with head to head competitors
Price
Value innovation –
simultaneous
pursuit
of high value &
low cost
Value/ product
features
Characteristics of a good Value innovation Strategy
FOCUS: Not to diffuse efforts
across all key factors of
competition.
DIVERGENCE: The shape of the
value curve diverges from those
of other players.
Compelling Tag line : The value
curve can be translated into a
clear, strong, truthful and
compelling TAGLINE.

11. Red Ocean Vs. Blue Ocean
Red Ocean Strategy
Blue Ocean Strategy
Compete in existing market space
Create uncontested / New market space
Beat the competition
Make the competition irrelevant
Create a value – cost trade off
Break the value-cost trade off
Competitive Advantage
Value Innovation
Segment existing customers
Attract noncustomers
Exploit existing demand
Create and capture new demand

12. How Do You Identify These Companies?
Blue Ocean with ipod, iphone & ipad
Blue ocean from prescription
drug to lifestyle
Blue ocean by making
Music portable
Blue Ocean in low cost travel
Blue Ocean in Luxury Travel
Blue ocean with making no frills
barbershop
Blue ocean in Search
Blue Ocean by increasing Customer productivity
Blue Ocean in Insulin market
Blue Ocean through tipping point leadership
Blue Ocean by looking across complimentary products
Blue Ocean in coffee bars
Blue Ocean in Apparels
Blue Ocean by making copiers a desktop
utility and not office equipment
Blue Ocean in Gaming
These are the companies that questioned the norms and
boundaries set by the industry and seized their market
shares without fighting with anyone!

13. Lets Explore How These Companies Got There
•Case Study 1: NETJETS
•Case Study 2: Indochino.com
•Case Study 3: Zynga Games
•Case Study 4 : Khan Academy

14. Six Path To Blue Ocean Strategy
Conventional boundaries in a competitive
marketplace
Industry - industry size &
dependencies
Strategic groups – strategic groups i.e
customer , vendors etc
Buyer group- individual customer
From competing
within
buying processes
Scope of product: scope of adding
Creating value
across
value with complementing products
Functional/ emotional orientation
of the industry: functionality vs.
Blue ocean Strategy
Emotional appeal tradeoff
Time: value that an attribute might
deliver tomorrow
• Blue oceans can be created by exploring outside of industry boundaries
• Break out of the traditional boundaries of the industry to unlock value
• “out of the boundaries” thinking framework for unlocking value

15. 6 PATHS: Exploration Outside of Traditional
Boundaries
Path 1 - Industry
What are the alternative industries to your industry?
Why do buyers trade across to them?
NTT DoCoMo, Federal Express, Southwest Airlines, NetJets
Path 2 – Strategic Group
What are the strategic groups in your industry?
Why do buyers trade up for the higher group, and why do
they trade down for the lower one?
Polo Ralph Lauren, Curves, Sony Walkman, Toyota Lexus
Path 3 - Buyer Group
What is the chain of buyers in your industry?
Which buyer group does your industry typically focus on?
If you shifted the buyer group of your industry,
how can you unlock new value?
Novo Nordisk, Bloomberg Terminals, Canon Copiers, Philips Alto
Path 4 - Scope of product or service offering
What is the context in which your product or service is used? What
happens before, during, and after? Can you identify the pain points?
How can you eliminate these pain points through a complementary
product or service offering?
Borders and Barnes & Noble, Dyson Vacuum Cleaners, Kinépolis Kiné-kids,
Zenick Salick’s Cancer Centers
Path 6 - Time
What trends have a high probability of impacting your industry, are
irreversible, and evolving in a clear trajectory? How will these trends
impact your industry? Given this, how can you open up unprecedented
customer utility?
Apple Music, Cisco Systems, CNN,
HBO’s “Sex and the City”
Path 5 - Functional-emotional orientation of an industry
Does your industry focus on functionality or emotional appeal? If you
compete on emotional appeal, what elements can you strip out to make it
functional? If you compete on functionality, what elements can be added
to make it more emotional?
Starbucks, QB House, Direct Line Group, Pfizer’s Viagra

16. More Understanding Of The Frameworks & Tools
Case Study - 1
• Introduction to Strategy Canvas
• Introduction to 4 Actions framework

17. World’s 2nd Largest airline!
• Over 800 aircrafts
• Over 6300 employees
• 285000 flights annually
•Flying across 170 countries and 2200 airports

18. Strategic questions before NETJETS
– How to enter into the aviation space when the market was dominated by the big airline groups? –
1983.
The red ocean
•Over 20 domestic and international airlines
• All of them catering to similar customer groups – i.e. Business travelers, holiday travelers and casual
travelers
•Corporates – biggest strategic groups - spent millions on executive travel every year
•All travelers – including executive travelers had to go through the long check ins, security checks,
hectic flight transfers, congested airports, baggage claims ….
•Business travelers only have the option of business class/ first class or corporate jet
The blue ocean
• Business travelers are the most frequent and regular flyers
• NETJETS offered business travelers “ the convenience of a private jet at the price of a airline ticket”
• NETJETS also provided fractional 1/16 ownership of the aircraft
• NETJETS provided Private aircraft at 4 hours notice ( much less than flight booking)
• NETJETS provided no hassles or responsibilities of aircraft maintenance
• Customized in flight services – much better than business class or first class services
NETJETS Converted a B2C industry into a B2B Industry

19. The Strategy Canvas
NETJETS
High
Business / 1st
Class Travel
Relevance Scale
Medium
Low
Commercial
Airline Industry
Price
Dead head
Costs
Hassle free
Travel
Time Savings/
Faster Travel
Flexibility &
Reliability
Jet Ownership
In Flight Service
Attributes of Industry & Competitors
NETJETS
•
•
Commercial Airline
Industry
Business / 1st
Class Travel
The strategy canvas is the central diagnostic and action framework for building a compelling blue
ocean strategy.
The Strategy canvas serves two purposes:
–
–
It captures the current state of play in the known market space. This allows you to know where you
are viz competition
It propels you to action by reorienting your focus:
• From competitors to alternatives
• From customers to non customers of the industry.

20. The Four Actions Framework
REDUCE
Factors that should be well
below the industry
standard
ELIMINATE
Factors that the industry
takes for granted and need
to be eliminated
CREATE
Create A
New Value
Curve
Factors that the industry
has never created
RAISE
Factors that should be
raised above the industry
standard
We use the four actions framework, to reconstruct buyer value elements in crafting a new
value curve.

21. Net Jets 4 Actions Framework
Eliminate
• Airport check ins, waiting time,
baggage, transfers and other time
losses for customer
•The tiredness and hassles endured
during a journey by the corporate
traveler
Reduced
• Private jet buying, maintenance and
administrative costs
• Time for travelers – same distance now
took half the time because there is no
checking, boarding or baggage claim time
• Other dead head costs :
scheduling, ticketing, administrative or marketing
costs
Raised
•Convenience, comfort & luxury
•Customized in-flight services
•Entire private jet for the user/s
• Service standards
• On time take off & arrival
• Available on 4 hours notice
Created
•Fractional ownerships of plane
• B2B industry when the entire
industry was still B2C
•Loyal customer base

22. Case Study – 2:
The Story of

23. The Story is …
•
Heikal Gani needed a suit for an important presentation. He faced a
major challenge.
–
Affordable suits didn't fit well or were not comfortable
–
Ones that fitted well were not of latest trend / design
–
One hardly has the time to go to a tailor to get a customized suit done
–
Designer suits of latest design & trend were too expensive
There had to be a better way for men to find a great-fitting suit
• World’s first self service virtual suit company
• Customers can choose the fabric, design style and
Results :
accessories
• Started in end of 2009 – have started averaging
• Customers get customization of suits through the site
• Customers measure themselves and provide fitting details
through online video tutorial
• Most suits priced under $500 ( Much lesser than designer
sales of over 30,000 suits a year across 60 countries,
with about 30 + employees
• Student start up to a global brand in less than 2 year
suites )
•Sales growth rate of over 200% every year
• Suit tailoring in Shanghai’s network of tailors
• A beeline of Venture Capitalist wanting to invest –
• Delivery in two to three weeks –
• If order is less than perfect, indochino pays for local
tailoring or remake the suit free
have already raised over 20 mn for operational
expansion in Vancouver & Shanghai

24. Creating the Blue Ocean
Traditional apparel / suit companies
Indochino.Com
1) Industry divided into five segments
• Haute couture
• Luxury
• Affordable luxury
• Mainstream
• Discount
2) The traditional companies competed
among each other on the following
factors:
• No of stores
• Location of stores – premium stores –
premium brand
• Range or no of lines offered
• Hi fashion vs customization vs price
tradeoff
3) Marketing & brand reputation
( Top brands associated with designer labels)
4) High customization costs
1) Indochino.com does not compete
in any of the segment
2) Indochino.com does not get affected
by the industry factors
3) Indochino.com built its brand
reputation by delivering value
4) Indochino.com outsources all suits
to quality and reputed tailor network
in shanghai - China
Created and captured a new market
demand

25. Indochino.com 4 Actions
Eliminate
• Need to go to store
• Store presence in hi end posh locations
• Inventory and Store management costs
• Separate costs for customization / tailor
Reduced
• Price
• Delivery & customization hassles
• Marketing costs
• No of lines offered
Raised
• Customer satisfaction & Quality
• Convenience / ease of shopping
• Affordability of quality suits
Created
•Fully self service customization
• 100% return policy

26. The Strategy Canvas – Indochino.com
Indo Chino
High
Medium
Relevance Scale
Low
•
•
Price
# of
stores
Location
Marketing
Indo Chino
Lines
Offered
Quality
Online
Hi End – Designer Suits
Customiz
ation
Ease of
Shopping
Return
Policy
Low End Suit Market
Attributes of Industry & Competitors
Indochino.com - expanded the market by making good quality suits affordable
It used technology to make things simple, functional and to add value
Self
Service

27. The Technology Trap
Use of technology challenges the conventional systems & process.
• But companies should not get carried away by the “technology”
• Technology innovation is not necessarily value innovation for buyer /
customer every time.
– Because use of cutting edge technology does not mean cutting edge utility for
the buyers
– Unless technology makes buyers lives simpler
The buyer utility map helps managers to :
• Avoid the technology trap
• Refine value innovation
• Enables a birds eye view of buyer utility
• Takes into account the buyer experience cycle and utility leavers

28. Buyer Utility Map
A buyer’s experience can usually be broken into a cycle of six stages, running more or less
sequentially from purchase to disposal. Each stage encompasses a wide variety of specific
experiences. At each stage, managers need to ask a set of questions to gauge the quality of buyer’s
experience.
Purchase
•How long does it
take to find the
product you need?
•Is the place of
purchase
attractive and
accessible?
•How secure is the
transaction
environment?
•How rapidly can
you make a
purchase?
Delivery
Use
•How long does it
take to get the
product
delivered?
•Does the
product require
training or
assistance?
•How difficult is it
to unpack and
install the new
product?
•Is the product
easy to store
when not in use?
•Do buyers have
to arrange
delivery
themselves?
•How effective
are the product’s
features and
functions?
•Does the
product or
service deliver far
more power or
options than
required by the
average user? Is
in overcharged
with bells and
whistles?
Supplements
Maintenance
Disposal
•Do you need
other products
and services to
make this product
work?
•Does the
product require
external
maintenance?
•Does use of the
product create
waste items?
•If so, how costly
are they?
•How much time
do they take?
•How easy are
they to obtain?
•How easy is it to
maintain and
upgrade the
product?
•How costly is
maintenance?
•How easy is it to
dispose of the
product?
•Are there legal
or environmental
issues in
disposing of the
product safely?
•How costly is
disposal?

29. Uncovering Blocks to Buyer Utility
Uncovering blocks to buyer utility can identify the most compelling hot spots to unlock exceptional utility.
By locating your proposed offering on the thirty-six space of the buyer utility map, you can clearly see
how, and whether the new idea not only creates a different utility proposition from existing offerings but
also removes the biggest blocks to utility that stand in the way of converting noncustomers into
customers.
Customer Productivity:
In which stage are the biggest blocks to customer productivity?
Simplicity:
In which stages are the biggest blocks to simplicity?
Convenience:
In which stage are the biggest blocks to convenience?
Risk:
In which stage are the biggest blocks to reducing risks?
Fun and Image:
In which stage are the biggest blocks to fun and image?
Environmental
Friendliness:
In which stage are the biggest blocks to environmental friendliness?

30. The Buyer Utility Map – Indochino.com
Buyer Experience from Decision to Disposal – (For Emerging Industries)
Purchase
Choosing a Store
How Fast can the
transaction be
made?
Secure
Transaction
Environment
Utility Leavers
Is it
Productive for the
buyer?
Delivery
Supplements
Disposal
Choosing a
Suit ( Color,
Style, & Fabric)
Does the suit
require tailoring
Return Policy
Getting Suit
Delivered
How Time
consuming
The Usage and
Maintenance
experience in this case
remains constant /
same for existing
industry as well as blue
oceans
Does the buyer find it
simple?
Does the buyer find it
Convenient?
Does it reduce buyers'
Risk
Blocks in
tradition
al
as well
as new
Utility
Blocks in
tradition
al
Buyer
Utility
Buying Experience
• Buyer Utility Score – Lower than what is prevalent in the current industry
• Therefore Indochino.com raised the Buyer Utility and Experience
Blocks in
New
industry
Buyer
Utility

31. Case Study - 3
• Introduction to three tiers of non customers

32. The Story of Zynga
•
•
•
•
Founded Zynga in April 2007 with a mission “Connect the world
through games”
Has over 3000 Employees and 270 million customers, 60 mn daily
active users
Largest Social games developer of Facebook
Now provides games in multiple platforms like:
–
•
•
•
•
Facebook, Myspace, Android, ipad, iphone, yahoo & Farmville.com
Successful IPO to raise up to $1 billion in an initial public offering on
July 1, 2011; Valuation of over $7 billion
Has made over 15 game studio acquisitions in last 2 years
Generates over $1.16 billion in annual revenues in 2011
Zynga is approached billion dollars revenue after only four years.
– Surpassing the market value of the longtime console game company EA
Sports

33. Creating the blue ocean
Traditional Gaming Companies
1) Industry divided into four segments
• Console based games
• Online Games
• Mobile Games & Flash Games
2) Console based games dominated the marketplace
with 75% of the revenues.
3) The big four of the gaming dominated 95% of the
console marketplace (sony, Nintendo, Xbox ..)
4) The Traditional gaming companies competed
among each other on the following factors:
• Consoles – Type speed, capabilities
• No of titles in each genre
• Speed of Title Release – weekly, monthly
• Hi end real time graphics
• Hi end accessories
5) Catered only to gamers – Teenage boys to
professional gamers
6) Addictive and had lot of side effects – Too much
violence, addiction, Lack of exercise, not mind
stimulating
7) Parents usually do not recommend / Buy
Zynga
Zynga’s Farm Ville
1) Zynga did not compete in any of the
segment or market player dominance
2) Zynga’s (Farm Ville) did not get affected
by the industry factors
3) Zynga built its brand reputation by
sharing and word of mouth connect
4) Zynga caterered to all – children,
parents, professionals …
5) Zynga created a new genre of
education / simulation games
Created and captured a new market
demand

34. 4 Actions Framework - Zynga
Eliminate
Raise
• Game consoles
• High cost of playing games – free
• Violence in games
• Genere based games
• Winner – loser syndrome
Reduce
• Graphics
• Hi-end technology – leveraging facebook
• Effort & time involved in playing games
• Entry barriers for users
•Marketing costs
• Community & sharing qualities in games
• Interactivity with friends
• Creativity, education & learning quotient
Create
• New revenue models
• no console or title based revenue
• Partnerships & advertising based
revenue
• Games that makes friends

35. The Strategy Canvas- Zynga (Farm Ville)
High
Medium
Relevance Scale
Low
Consoles
&
Hardware
Cost
Time &
Effort
Violence
Winner/
Loser
Graphi
cs
Traditional Gaming Industry
Attributes of Industry & Competitors
Game
Genere
Marketin
g
Commun
ity
Educati
on
Sharing
Zynga
Creativity

36. The Three Tiers of Non Customers
Tier 3 Non
Customers
Tier 3 non customers: “unexplored” non customers who are in markets
distant from yours.
Tier 2 Non
Customers
Tier 2 non customers: refusing noncustomers who consciously choose against your market
Tier 1 – Non
Customers
Tier 1 non customers : “soon-to-be” noncustomers who are on the edge of
your market, waiting to jump ship
Non Customers
Managing the three tiers of Non customers
Tier 1 non customers :
Investigate un satisfaction
Key commonalities across needs & desires
E.G. PRET A MANGER- british fast food chain
Tier 2 non customers:
Eliminate access barriers
Economic, functional, education, geographical
Tier 3 non customers:
Remove long held assumption on customer needs & behavior

37. How Did Zynga Attract Non Customers?
Tier 1 Non-Customers
Audience
Non Regular players – young
boys & girls bored out of
traditional games
Tier 2 Non-Customers
Casual Players - working
men/ women not enough
time to play
Change 1
Changed genres completely –
from shooting, arcade, racing,
to simulation
Cost of acquisition – free
Change 2
Made social networking fun
and more exciting
Eliminated hassles of consoles,
game titles, accessories,
hardware & setups
Fun lasts longer, with reduced
time and effort
Non serious casual play to relax
/ unwind
Results
Tier 3 Non –Customers
Non Player Parents- women/
housewives
Removed violence
Play with friends and family –
not necessarily together / real
time
No winner – no loser
• Zynga looked across non customers and attracted new buyer groups to
create an industry that did not exist earlier
• Zynga also capitalized on the ongoing trends of Social media to mount its
games offering to provide an unprecedented customer utility

38. Case Study - 4
• Introduction to PMS maps

39. The Story of Khan Academy
•
•
The Khan academy is a non-profit educational organization created in 2006 by
salman khan- A MIT & harvard business school alumni
Free online collection of more than 3,300 micro lectures
•
•
– Think out loud video tutorials in mathematics, sciences, engineering & medicine,
economics, finance, arts, history, civics and even computer science
– Automated exercises with continuous assessment
– Content delivered offline in community colleges, charter schools and other schools
across US
– Providing a high quality education to anyone, anywhere
Mission : to accelerate learning for students of all ages
Khan academy has eclipsed mit’s open courseware ( OCW) in terms of videos viewed
–
–
–
–
–
–
Its youtube channel has more than 172 million total views, compared to mit's 38 million.
It also has twice as many subscribers, at more than 369,000
Over 177 million lessons delivered till date
Close to quarter billion dollars in donation
Team size of just 20 people
Amongst the 100 most influential people of the world

40. Creating the Blue Ocean
Traditional Learning
1) Industry divided into 2 segments
• Brick & mortar Learning – Schools/ Colleges
• Online learning
2) Learning was centered around students
3) The factors the industry was competing on:
• Student teacher ratio
• Class room Interaction
• Cost of learning / Education
• Interactive Learning
Khanacademy + Schools
1)
Khanacademy filled the gaps existing in
traditional brick & mortar school learning
•
Videos & Exercises to be used as a teaching aid
and not replacement for teacher
Use analytics and technology to figure out the
Strengths & weakness of students
•
2) Learning is centered around students,
teachers and parents
4) Smart kids get more attention than other kids
4) Everybody gets equal opportunity /
attention/ Learning
5) Focused pedagogy – Teacher talks – Students listen
– Therefore Students learn
5) Unique Pedagogy • Stop, rewind, understand and then play
6) Teachers Judge student’s strength / weakness
6) Analytics drive the understanding of each
students strengths & Weakness

41. 4 Actions Framework – Khan Academy
Eliminate
Raise
• Quality of Learning
• Equality of Learning
• Simplicity in learning
• Progress & Tracking management
•Sharing and mentoring
• Emotional Connect
• Need of classrooms for learning
• Boring teachers and lectures
• Cost of education
Reduce
• Difficulty level /s in Learning
• Entry barriers for quality education
students across the world)
• Pedagogy based learning
Create
( for
• Enriched and vibrant class rooms
•Interactivity and fun while learning
• More involvement from parents,
teachers & kids

42. The Strategy Canvas- Khan Academy
High
Medium
Relevance Scale
Low
Classroo
ms
Cost of
Learning/
Teaching
Teacher
student
ratio
Learning
pedagogy
Learning
Quality
Student
Tracking
Traditional Education/ Schooling Industry
Attributes of Industry & Competitors
Simplici
ty
Learnin
g
equality
Involve
ment
Levels
Sharing
Emotiona
l Appeal
Enriched
Classroom
s
KhanAcademy.org

43. Khan Academy + Classroom Learning = Blended Learning
Audience
Regular students–
Students
Teachers
Parents
Change 1
Pairing classmates with each
other facilitated easier learning
Deep analytics and data to
understand the student
learning behaviors and interests
Change 3
Classroom is enriched – with
higher level discussions and
problem solving
Equality of learning
Understanding their
aspirations better
Change 4
Mentoring and coaching by
students – to students across
the world – Empowered
learning
More quality time with
students
More quality time with
parents
Started re learning and
refreshing their concepts
Understand their child’s
strengths and talents better
Clubbed the best of both worlds – More constructive and enriched classroom based learning
Teachers have more quality time with students
–
–
•
•
Forced the teachers to view
videos and exercises
Change 2
•
•
Classroom teaching now done
at home
Teacher provides more time to students who need them
If a student gets stuck in a subject / topic – he / she is paired with other student - to facilitate easy
learning
Students can coach and mentor other students ( to anyone -across the world)
Parents really know what their kids are doing and what they are good at – with analytics

44. Introduction to Pioneer, Migrator and Settler Maps
Pioneer
Blended Learning
(Online + Classroom)
Khan Academy
•Online teaching aids / Supplements
classroom teaching
( Value Innovation)
Migrator
Online Learning
( Value Improvement)
(Online, mobile, ipad, Social)
Settlers
Traditional brick &
mortar learning
(Schooling System)
( Value Imitation)
Today
•
•
•
Tomorrow
Settlers are defined as me-too businesses, Migrators are business offerings better than most in the
marketplace, and a pioneers is the businesses that offer unprecedented value.
Every thriving market place has high no of Settlers, moderate migrators and low / medium pioneers. The
classification is also directly proportional to the growth potentials
This framework can be used to help a company align its internal product portfolios
–
–
–
–
Today's market share is a reflection of how well a business has performed historically.
Thereby help in determining which businesses experience the highest and lowest growth and cash flow.
Clearly, what companies should be doing is shifting the balance of their future portfolio toward pioneers
If current portfolio and the planned offerings consist mainly of settlers then the company has low growth trajectory

45. Challenging The Boundaries

46. What Did They Do Differently?
NETJETS
Looking
beyond the
current
Industry
Private jet industry
Indochino.com
Looked at
unique
Strategic
groups within
the industry
Audience who wanted a good
fitting suit at a nominal price
Most
profitable
strategic group
Private Jet
Convenience +
Marginal
increase in
cost +
Fractional
Ownership
Corporate and business
class travelers
Leveraged the
Scope of
product/
Service offering
Reduced the consumer’s effort by eliminating
the need to choose store, Tailors, Customization
costs etc
Customized ,
No Hassles
affordable suit

47. What Did They Do Differently?
Zynga
Looking
beyond
the
current
Industry
Made a Niche
Industry
to a mass
industry.
Khan Academy
Improved
the
scope of
Product
Offerings
Eliminated the pain
points in a
conventional
system
through a
complementary
service offering
Newer
Buyer
Groups
Looked at Non Buyer
Groups
by eliminating their
pain points
Newer
Buyer
Groups
Expanded the
horizon by
involving
teachers &
parents
Looked
across
time to
leverage
social
networkin
g
Increased
scope of
product/
games
Made games
more
Social &
Educational
Gaming
with
Friends
Looked at the audience
trends and
Provided unprecedented
value
Reduced
Functional
&
Increased
emotional
orientatio
n
• No frills service – just
click, play, watch, learn
& practice utility
• Commitment to
quality education –
increased emotional
appeal
Looked
across
time to
leverage
trends
Looked at the
audience needs
and
Used his learning
medium to blend
with Conventional
learning
Empower
ed &
Enriched
classroom
s

48. Summary Of The Webinar
• Blue ocean strategy is about creating value innovation to the
buyers
• Its about questioning and challenging the current industry
boundaries and breaking out of them
• We also learnt through case studies
– How a B2C industry was made into B2B Industry – Net Jets
– How a new niche industry was created by providing buyer utility and
convenience values - IndoChino.com
– How a Niche industry was made into a mass industry – Zynga
– How two industries could work together to create unprecedented
value & utility to the audience – Khan academy

49. Blue Ocean Strategy Principles
Strategy Execution
Strategy Formulation
Search Risks
Planning Risks
Scale Risks
Business Model
Risks
Organizational
Risks
Management
Risks
6 Paths Approach
Strategic
Planning
Market Sizing
Business
Model
Mobilization
Management
Risks
Reconstruct
Market
Boundaries
Focus on Big
Picture – Not
Numbers
Reach Beyond
Existing
Demand
Getting the
strategic
Sequence
Right
Overcoming
Organization
al hurdles
Building
Execution
into Strategy
•Alternative
Industries
•Strategic groups
•Buyer Groups
•Complementary
Product offerings
•Functional
Emotional
Orientation
•Time
Plan beyond
incremental
improvements using
a visualization
approach
•Visual Awakening
• Visual Exploitation
• Strategy Fair
• Visual
Communication
•Use PMS map to
identify current &
future orientation of
business
•Sequence the
business Model to
capture newly
created value
•Buyer Utility
Mapping
•Pricing & corridors
of Masses
• Cost Targets
based on margins
desired
• Potential
Adoption obstacles
Tipping Point
leadership to
Tackle
• Cognitive hurdles
•Resource Hurdles
•Motivational
Hurdles
• Political Hurdles
Execution
through:
Engagement
•Explanation
•Clarity of
expectations
•Challenge
Conventional
practices
•Consolidate
demand by
focusing on Non
Customers
• Three tiers of
Non Customers
To be Continued in next Webinar

50. Questions ?
50