blue ocean strategy rbn v1

Author: R.Nepomuceno Blue Ocean Strategy_RBN_v1

Blue Ocean Strategy Blue Ocean Strategy

ImplementationImplementation

Presented by:

Reyland B. Nepomuceno, MBA

General Manager – International Business Division

Netpia Phils, Inc.


The Path to Blue OceanThe Path to Blue Ocean

• “Imagination will often carry us to worlds that never were. But without it we

go nowhere.”

- Carl Sagan

• “All men who have achieved great things have been great dreamers.”

-Orison Swett Marden


What is Blue Ocean Strategy?What is Blue Ocean Strategy?

• Creating New Markets

• Shift in Paradigm

• Value Innovation: The cornerstone of BOS

• Hybrid of Differentiation and Low-Cost Strategy

• Traditional Marketing Focuses on serving “Customers”

• BOS focuses on serving “Non-Customers”

• Defense against thinning profit margins in Red Ocean

• Red Ocean = Marketing is War!

• Blue Ocean = Reinventing the Market

Create Uncontested Market SpaceCompete in Existing Market

Make Competition IrrelevantBeat the Competition

Create and Capture New DemandExploit Existing Demand

Differentiation and Low-Cost StrategyDifferentiation or Low-Cost Strategy

Break the Value-Cost Trade OffValue-Cost Trade Off

Blue OceanBlue OceanRed OceanRed Ocean


Value InnovationValue Innovation

• Value Innovation is created in the region where a company’s actions entail:

– Cost Savings: elimination and reduction of factors where industry

competes on

– Buyer Value: raised through creation of elements the industry has never

offered

ValueInnovation

Costs

Buyer Value


Blue Ocean FrameworksBlue Ocean Frameworks

• 6 Principles of Blue Ocean Strategy

• Strategy Canvass

• 4 Actions Framework

• PMS Map

• 3 Tiers of Non-Customers

• Blue Ocean Strategy Sequence

• Buyer Experience Cycle

• Price Corridor of the Mass

• Blue Ocean Index


6 Principles of Blue Ocean Strategy6 Principles of Blue Ocean Strategy

• Formulation Principles

– Reconstruct Market Boundaries

• Look Across Alternative Industries (different form but same purpose)

• Look Across Strategic Groups w/in Industries (pursue similar strategy)

• Look Across Chain of Buyers (not just the end-user but the influencer)

• Look Across Complementary Products & Service Offerings

• Look Across Functional or Emotional Appeal to Buyer

• Look Across Time (Proactive not Reactive)

– Focus on the Big Picture, Not the Numbers

– Reach Beyond Existing Demand

– Get the Strategic Sequence Right

• Evaluation Principles

– Overcome Key Organizational Hurdles

– Build Execution into Strategy


Strategy CanvassStrategy Canvass

• Diagnostic and an Action Framework

• Reveals where the Competition is Investing

• Dissects the factors where the Industry currently competes in Product, Service and Delivery

• Reveals “Gaps” in the current market offerings

• Looking to “Alternative Industries” for Differentiation Focus

Price Meals Lounge Seating

Classes

Friendly

ServiceSpeed Frequent

Departures

Ave. Airline

Car Transport

Cebu Pacific

X-Factor


4 Actions Framework4 Actions Framework

• Customers may be “Over-served in Areas which are not critical” and “Underserved” in areas that matter to a specific market

• Core of the Blue Ocean = Enables the Fusion of Differentiation and Low-Cost Strategy

• ELIMINATE – Factors that Industry Takes for Granted

• REDUCE – Factors that should be reduced below industry Standard

• RAISE – Value Factors above industry standard

• CREATE – New Factors that Industry has not offered

CREATERAISE

REDUCEELIMINATE


4 Actions Framework: 4 Actions Framework: SisigSisig Hooray!Hooray!

-Time of Availability

(Any time of the day)

-Place of Availability

-Taste

-Convenience

(Disposable Styro)

CREATERAISE

-wait time (They actually raised the bar

as it is served quicker)

-cost = plastic spoon

and fork

-price = P50

-Above the Line

Advertising

(They use Blogs)

-Beer that is usually

partnered w/Sisig

-Bar Music / Entertainment

-comfortable seats

-Sizzling Plate

REDUCEELIMINATE


PMS MapPMS Map

• Defines a Roadmap to your Target Market

Pioneer, Pioneer, MigratorMigrator and Settersand Setters

“The SoulNever ThinksWithout anImage”-Aristotle


3 Tiers of Non3 Tiers of Non--Customers (Targeting)Customers (Targeting)

Tier 3: Non-Customers

That have never thought of your market’s offerings as an option

(Their Needs have been Assumed to Belong to other Markets)

Tier 2: Non-Customers

That refuse to buy your Industry’s Offerings

(Either they find it Unacceptable or Beyond Their Means)

Tier 1: Mainly Buy

Industry offering Out of necessity

“Soon-to-be” Non-Customers


Blue Ocean Strategy SequenceBlue Ocean Strategy Sequence

Exceptional Buyer Utility?

A Commercially Viable Blue Ocean

Affordable to Masses?

Buyer Utility

Price

Can you Attain Cost Target to ProfitAt Strategic Price?

Cost

Adoption Hurdles Being Addressed?

Adoption

YES

YES

YES

YES

No, Rethink

No, Rethink

No, Rethink

No, Rethink


Buyer Experience CycleBuyer Experience Cycle


Price Corridor of the MassPrice Corridor of the Mass


Blue Ocean Idea Index (BOI Index)Blue Ocean Idea Index (BOI Index)

NintendoWii

SonyPS3

MicrosoftXbox-360

-

-

-

-

+

-

-,+

-

+

+

+

+


Case Study: CrocsCase Study: Crocs

• Innovation in the shoe industry

• unique lightweight clogs that

combine comfort and fashion and

low price point.

• Crocs branded shoes have broad

appeal because they are a funalternative to traditional sandals

and casual shoes and come in a

wide range of funky bright colors.

• Customer Value: ergonomic

comfort, lightweight, anti-skid,

waterproof, and anti-microbial.

-Fun (emotional)

-New Type of

Fashionable,

Functional Casual

Footwear

-Comfort (Lightweight

and loose fitting)

-Ease of Use

-Durability

-Safety (Skid resistant)

-Purchase

Accessibility

CREATERAISE

-Labor Manufacturing

Costs

-Material Costs

-Advertising Costs

-Shoe Box and

packaging

REDUCEELIMINATE


Case Study: BlackberryCase Study: Blackberry

• Blackberry was a breakthrough in

mobile communication

• Was ideal for Corporate People

“On-the-Go” and must be reached

anywhere (airports, etc.)

• Rapid Response Time to Emails

• Eliminated need for Laptop and wifi

connection to check email /

Browse / Chat-Security

-”Push Technology”

-Redundancy of Email

/ Synchronization

-QWERT Keyboard

-Real Time Chat

Capability

-Battery Life

-Durability (Bulletproof

Material)

-Reliability

-Speed of

send/receive email

-Browsing Capability

-integration of voice,

PDA, Tools, Email

CREATERAISE

-implementation time

-training time

-support time

-response time to

emails (Global)

-Need for computer to

check email

-Need for wifi to

connect

-remote client software

instalation

REDUCEELIMINATE


Case Study: Case Study: InfinitInfinit

• Infinit is a RTD, non-carbonated

cocktail with 5% Alcohol

• Comes in 6 flavors using GSMI’sGran Matador Brandy, Tondena Rum 8 Years,

Antonov Vodka, GSM Blue, Don Enrique, St. George

Premium Whisky

• Shifted Customers from 4 F’s:

Farmers,Fishermen,Foremen,Factor

y Workers to 20-30 age Club Goers

• Battle Cries: “Bilog ang Mundo”

“Tapangan Mo Pa!”, “Blue Ocean”-Variety of Flavors

-Fun and Emotional

Appeal

-Reinvented Itself

-New Markets

-”Refreshing” drink

-sleek bottle shape

(same as SML &

Strong Ice)

-Alcohol

-Availability

(Bars, Groceries,

Convenience Stores)

CREATERAISE

-Price vs. Imported

RTD Alcopops (Vodka

Ice, Vodka Cruiser)

=Only P30 in bars

-Advertising Cost

(mostly Point of

Purchase Collaterals)

-Hassle of Mixing

-Strong Alcohol Taste

(Masked by Fruit)

-4 F’s image

REDUCEELIMINATE


Case Study: NETPIACase Study: NETPIA

• NETPIA tapped a new market,

enabling higher internet access to

a wider strata

• Eliminated the Digital Divide

between English / Non-English

Speaking Countries

• Created 3rd Generation Internet

(being implemented now in

various countries)

-A new demand for

Multi-Lingual

-Multi-Lingual Key

Word Address System

-3rd Generation

Internet

-A new venue for E-

Commerce (Look-up

Services)

-Accessibility to the

internet

-Protection of

Trademark and IP

-Ease of Use

-Comfort

-Nationalism

CREATERAISE

-Hassle of complicated

Domain addresses

-Pricing for registration

-Digital Divide

-Need to Learn

English

REDUCEELIMINATE


IP Address

Ex) http://211.106.67.202

English Domain Name

ASCII.ASCII format

Ex) http://www.netpia.com

Internationalized Domain Name (IDN)

IDN.ASCII format

Ex) www. .com

1st Generation

2nd Generation

2.5 Generation

3rd Generation

Next Generation

Internet address

Simplicity

Convenience

2.7 GenerationInternationalized TLD -2009

IDN.IDN format

Ex) www. .

Native Language Internet Name

Ex) (((( , DEFGHIس , , , , トヨタトヨタトヨタトヨタ))))

Evolution of the Internet NameEvolution of the Internet Name


What if the World Could Communicate Better?...What if the World Could Communicate Better?...

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Questions?

Email: [email protected]

blue ocean strategy rbn v1

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