BLUE OCEAN STRATEGY SIMULATION ASSIGNMENT (PART 1)

SUBMITTED BY: CHARU CHOPRA (2009-015-A)

TEAM: IABET

ROUND ANALYZED: BLUE ROUND 3

Blue ocean strategy can be created in 2 ways

By creating a differentiated product or a product for a new market

By creating service and delivery offerings that add such value to the product which doesn’t already exist

My key learning from the Blue ocean strategy simulation has been that it is necessary to rotate and innovate in all the 3 categories i.e.

product features and characteristics,

service offerings

distribution strategy,

so that even if a competitor tries to imitate you, he cannot copy and re-build your offerings completely. However, while doing this, it is necessary to make one of these three as your core strength and leverage on it extensively, like Dell banks on its distribution strategy.

In Blue Ocean Round 3 there were 2 visual exploration paths:

Path 4: Looking Across Complementary Product and Service Offering: In this path, there were multiple service offerings given to be chosen from. These were from various different arenas like pre-sales, after-sales support, product maintenance and promotional characteristics like offers, discounts and bundles etc.

Path 5: Looking Across the Functional and Emotional Appeal for Buyers: there were options like online stores, franchisees and dedicated stores to choose from apart from unconventional delivery channels like game parlours where demonstrations were easy.

Instead of choosing one of the two paths, we decided to incorporate the features of both that were relevant to our TG. However, as specified in the strategy above, we focused on service (i.e. Path 4) as our core strength and we prioritised the features to be ‘created’ and ‘enhanced’ as well as the projects to be commissioned based on this.

According to our product offering created in Blue Round 1 and honed in the subsequent round, our target group was

36+ years olds (primary)

22-35 years olds (secondary)

We consciously decided to not target the 6-21 years old as the product features they demanded were significantly different from the other two groups.

As was mentioned in the handbook, the Shopping Preferences of each segment were as follows:

Figure - Shopping preference by age band

Based on the above figure we decided to concentrate our distribution in specialized electronic stores, video game parlours and through online retailing.

This is how our final service and delivery offerings looked like

YEAR 2014

Services and delivery factors raised all created in 2013 were more or less a combination of Path 4 (services) and Path 5 (delivery).

In the initial strategy canvas, these were the features we incorporated:

Online

quality of online support ability to buy from a catalogue

Specialized Electronic stores dedicated stores informed salespersons

Service (offers) deals and price promotions speed of providing patches number and complexity of bundles

Service (after sales) warranty offer corrections to games ease of repair after sales help and advice

To put into action the Four Actions framework and to filter the insights according to the requirements identified, we did the following:

Eliminate (as these features either created a negative impact on our selected non-onsumer group or were only required or asked for by the TG that we were not targetting)

o Ability to swap gameso Extended warrantyo Loyalty cards and rewardso Manufacturer’s insuranceo Ability to buy from an online catalogueo Trial and return

Reduce

o Online gaming o Warrantly offero Deals and promotions

Raise

o Speed of repair

o Speed of providing patcheso After sales help and supporto Informed and friendly salespersonso Direct sales

Createo Dedicated storeso Gaming parlourso Online buying option

In this period, two projects were initiated

Hiring Expert Trainers To Train Distributors’ Salespeople: return expected was likely to be large and the project would be vital for the new delivery strategy to succeed

Hiring The Talk Team From A Region Is Specialist Luxury Goods Retailer: was important because we were looking at creating a specialist dedicated store.

Post 2014, the quality of online support and other offerings for online distribution did not do too well. The demand exceeded production by 1240 thousand units and we had to pay an inventory adjustment cost which affected our marketing budget in the subsequent period.

YEAR 2015

In the years 2015, our services appealed a lot to the non-customers while the delivery part was not very satisfactory though both of them gave us good margins and boosted our sales incredibly. The product along with delivery and service characteristics lived up to the new value factors necessary to unlock the markets. In this year, our online delivery channel gained well, dedicated Stores added a lot of value due to the project commissioned in the previous year being implemented. The after sales service was sought after and gave us excellent returns.

However, again despite increasing our production two-folds, the production plan was insufficient by 2749 thousand units

Projects implemented in this period were:

Hiring Expert Trainers: helped the organization’s capabilities in delivery to significantly improve

Hiring A Team Experienced In Developing And Managing A Fast Food Franchise: vital for our new delivery strategy to succeed

Projects commissioned in this period were:

Radically Upgrading Leadership And Service In The Customer Contact Centre: vital for our new service strategy is to improvement in the contact centre could revitalise many other service functions within the organization

YEAR 2016

2016 projects implemented

radically upgrading leadership and service in the customer contact centre: significantly improve capabilities in services

By this period we had expanded our geographical target to 100% in both the markets and implemented all the projects available to us. However, the demand was still not met instead of our increasing the production manifolds. This is one flaw in the simulation i.e. it has no tool yet that lets you visualize or forecast the demand accurately. It is still hugely and solely based on intuition.

BLUE OCEAN STRATEGY SIMULATION ASSIGNMENT

(PART 2)AIRCEL BUSINESS SOLUTIONS

Aircel Business Solutions is the enterprise arm of the telecom company Aircel. It caters to the ICT (information and telecommunication) needs of enterprises. It creates and manages services and products for other organizations. When I joined ABS, it was in its inception stage. They were identifying the markets to be targeted and were conceptualizing the products and services to be offered in that market.

They decided to let go off the cluttered Large-Enterprise segment and focused their service offerings and limited them to small and medium scale enterprises (SMEs). It was a perfect ground for applying and testing a blue ocean strategy.

For ABS the following could be a Blue ocean offering. As they were catering to SMEs, who had limited capital, low manpower and usually low ICT expertise and infrastructure, there seem to be a good opportunity if they could:

Provide solutions with a good return on investment (ROI). Take part in long-term projects that helped the SMEs manage complex

infrastructure and applications (methodology and scalability); Provide transparency on processes, as well as a define clearly business cases

showing the company’s capabilities in long and complex projects.

PRODUCT FEATURE

Connectivity – most of the small businesses and enterprises are still using broadband connections provided for homes. There is a scope for migrating them to specialized connectivity solutions

Value-added services – many small businesses make do with consumer services, but recognize that as businesses they ought to be looking for more than just connectivity. According to a report, only 25% of SMEs in India have a Firewall.

Growing role of the Web – less than half the SMEs we talked to have a website, even fewer have an Intranet, and yet these are the first steps towards enhancing productivity both within a company and between its customers and suppliers

Convergence –emerging convergence of voice, data and content, the internet and telephony, as well as FMC can stimulate demand within the SME segment for more comprehensive and less disconnected standalone solutions

Mobility – the workforce in most companies is far more mobile than it has been in the past, with connectivity required from phone, fax, mobile, desktop, laptop, Smartphone to and from the office, home, hotel, or on-the-move. This increased mobility leads to a greater mix of communications, needing a trusted partner to manage it

ERP and Equivalents: Everyone needs an organization wide solution broader portfolio/incremental ICT sales: give them a complete portfolio and

tell them stages in which they can install/implement

SERVICE SPECIFICATIONS

The SME market is highly competitive with limited difference in performance of various organizations. They demand a host of service characteristics in the services that ABS would provide. The service features are outlined below:

Overall, our Path would include the following 5 features that are indispensible for ABS if it has to enter and reign as a leader in the SME market:

BLUE OCEAN STRATEGY SIMULATION ASSIGNMENT

(PART 3)INDUSTRY SELECTED: VIRTUAL EDUCATION

TARGET NON-CONSUMER: ADULTS (35+ YEARS OLDS)

TARGET GEOGRAPHY: URBAN INDIA

WHAT IS VIRTUAL EDUCATION

Virtual education is a system wherein the student and teacher do not necessarily have to be in the same geographical location for imparting knowledge and delivering course curriculum.

Currently, in India, no virtual education system allows for teacher and student to be available on the virtual system at different times. Hence, for my strategy I look at a system that would allow for recorded lectures, and teachings from various time-zones.

Moreover, based on artificial intelligence, the system will not be limited by a single pedagogy or curriculum, the student, based on his or her profile and interests will be able to choose the combination of lectures he wants to take and the methodology of his study. The examination will also not be binding on date and time.

In India, the internet infrastructure is not too advanced, therefore to make the service offering available to a larger segment, it is necessary to provide low bandwidth and offline classroom teaching. As and when 3G makes in-roads, the model can be evolved and made more multimedia and technology heavy.

CURRENT SCENARIO

Mistakes made in virtual education

Thinking that virtual education=mass education Complexity and mystery are associated with virtual education to make it an

elitist offering Teachers are dictated by technology rather than being in a commanding

position The content is too multimedia heavy and therefore requires huge bandwidths Real-time classes also need a high bandwidth

SUGGESTED BLUE OCEAN OFFERING

Virtual education in India currently looks at correspondence students, and looks at centre where students can gather, use a PC provided by the centre and connect to an online tutor.

My blue ocean offering in the field of virtual education for adults in India, provides the following differentiation:

REDUCE AND ELIMINATE

Recordings of lectures that can be watched at ease. These will help working adults as well as housewives who wish to pursue education while at home. This will reduce the time constraint and in-flexibility of the online system.

These lectures, mentioned above, can be left on streaming, while the student completes his or her other work and can then we watched at leisure. This prevents band-width suction and saves time and inconvenience.

Both the above points also eliminate the necessity for a centre and hence reduce infrastructure and capital costs

The system eliminates the need for a college building, staff and on-roll teachers.

The inflexibility of taking examination on a single date and time will be eliminated and replaced with a window in which a student can take a particular assessment.

CREATE AND RAISE:

SERVICE OFFERINGS Human – computer interface: A lot of investment has to be put into

creating easy to understand user interface and navigations as the adults may not be very tech-savvy and too much of technology expertise requirement would irk them away from the system

Access, delivery, scheduling and recording: as it is an online system where the administration or guidance of a mentor is not available on-site of consumption of educational content, the scheduling, recording and other processes need to be of very high quality and should be as error-free as possible

Interactivity of the system has to be increased in terms of student-teacher interaction beyond classrooms, and also in the form of peer-to-peer interaction and socialization.

As the system talk about recorded lectures and options for interactivity and interfacing, therefore it has all the grounds to enroll world-class faculty, industry speakers and pioneers to record lectures and sermons thereby creating additional value.

As the system is being designed for working professionals as a target group, there can be a peer-to-peer discussion or sharing forum that

enables these people to share their experiences and expertise in their fields of work. This could be a value add for people from their field as well as people who are inquisitive about that particular field.

There is a need to create a good standardization of processes so that repeat customers and new customers do not have to face unnecessary hassles in the absence of on-site help.

A robust feedback system has to be created where the profile and progress of a student will be maintained. It has to be supplemented with a period-to-period one-to-one feedback from faculty and system architects on the in-roads that the student has made

There has to be incentive for a student, specially a house-wife, to come back to the education platform the next day. Therefore based on the profile of the student created above, the system should have great artificial intelligence capabilities to suggest stuff to the student for the next lecture that interests him.

All the above has been depicted in the form of an ERRC grid below:

BENEFITS

The system is a low cost solution for education as compared to other virtual education models that involve a study centre. Secondly, it creates humongous value for working professionals and housewives who could otherwise not think of pursuing further education due to stigma of going out and studying at their age or due to lack of time.