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Blue ocean strategy
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The Blue Ocean StrategyA Case Study Analysis of 14 agencies in Malaysia
Outline: Introduction Objectives of study Literature Review Six Principals of BOS Framework and Tools of
BOS Methodology Data Collection Findings Conclusion Critical Review
WHAT IS BLUE OCEAN STRATEGY?
8 KEY POINTS OF BLUE OCEAN STRATEGY
Introduction: Introduced in
2004 by W.C. Kim & R Mauborgne
Operationalization and implementation yet to be synchronized
Research Target Groups
OBJECTIVES OF STUDY
Effectiveness
Analysis
Experiences
Gathered information from companies that implemented BOS
Importance of Kim’s book in explanation of BOS principles
LITERATURE REVIEW
Strategic Models: Ultimate aim of
most strategic Models: To make the company better than competitors
Most common variables: External & Internal
Examples: SWOT, SPACE
• Strengths• Weaknesses• Opportunities• Threats
• Financial Strength
• Competitive Advantage
• Industry• Environment
LITERATURE REVIEWPortfolio Models:
Various portfolios can be viewed in one chart and strategies would depend on portfolios in their respective quadrants
Just one external and one internal factor are chosen e.g. BCG
LITERATURE REVIEW
Other Models:
Models based on different levels of strategic decisions e.g. corporate, business, operative levels
Porter’s Models, Break-even chart, Product life cycle and experience curve
LITERATURE REVIEW
In BOS, first time a model was introduced without pairing of any external and internal variables i.e. Strategy Canvas
Always a comparison between company’s actual and expected scores against other players
SIX PRINCIPLES OF BOS
BOS FRAMEWORK & TOOLS
Strategy Canvas Value Innovations
analysis Eliminate-Reduce-
Raise-Create Grid Six Paths
Framework Four steps visual
strategies 3 Tier of non-
customers BOS sequences Blue Ocean Idea
Index
METHODOLOGY
Exploratory and Case Study approach
Group A: Six companies participated who were already applying BOS principles
Group B: 20 companies agreed to participate in discussion in workshop
Detail analysis of 14 companies only
DATA COLLECTION
Data Gathered
Only utility principles were analysed:
Utilities that are eliminated
Reduced Raised Created
Data Analysis
Domain Analysis methodology
“Eliminate” and “Reduce” utilities & the “Raise” and “Create” components were grouped together to get a bigger mass
FINDINGS
ELIMINATE REDUCE RAISE CREATE
1 60 Programmes 9 Operating costs 8 Quality 4 Customer
satisfaction
2 6 Product variations 10 Tangibles
12 Improving customer service
10 New activities
3 3 Costly activities9
Overheads and indirect
12 More customer
satisfaction
5 Closer to customer
4 3 Internal processes 3 Processes 4 New activities
6 Governance
5 4 Operational activities
3 Reduce time taken
10 Long duration
effect
6 5 Investments
FINDINGSEliminate & Reduce Grid
Chart
Cost component was main focus
Utilities that were not giving good returns
Low score in Internal processes
Time consuming activities
Raise & Create Grid Chart
Main component: Customer satisfaction scores
Utilities providing new products & services to the customers
Utilities with Long duration effect
High quality utilities
FINDINGS
ELIMINATE
Meals, Seating class choices, Printed Tickets, Lounges, Need to see a
travel agent
RAISE
Affordability, Accessibility
REDUCE
Perception of air travel, Excess
conveniences, Cost of air travel
CREATE
Cheap air travel, Ticketless travel, Online booking, Family travelling
Air Asia Company
CONCLUSION
All the companies had completely understood and implemented BOS principles
BUTnobody has got any recognised BOS certified recognition
THEREFORE
Their level of understanding needs to be verified
CRITICAL REVIEW During Discussion in
workshop there were differences in the understandings of principles of BOS.
Time Consuming data collection method: Action Research
Each company is uniquely different and need to be approached differently
References: Allen,M.,(1979), Diagramming GE’s Planning for What’s
WATT in book edited by Allio et al, Corporate Planning: Techniques and Applications, AMACOM New York
Drucker P, (1992), Managing the Non Profit Organisation, Harper Business
Mintzberg,H et al, (2003), The Strategy Process, Pearson.
Porter, M.E. (2008) The five competitive forces that shape strategy, Harvard Business Review.
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