Blu Ocean Strategy

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Blu Ocean StrategyBlu Ocean Strategy

A.A.Connection between Connection between competitive arena and competitive arena and Strategic frameworkStrategic framework

B.B.How to maximize the Blu How to maximize the Blu OceanOcean

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“ “ How could we align and How could we align and planning strategic planning strategic

processes focusing on the processes focusing on the competitive arena and apply competitive arena and apply

these concepts into our these concepts into our companycompany?” ?”

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““Confronto tra i Confronto tra i processi di processi di

pianificazione”pianificazione”Classic VisionClassic Vision

• Actual condition in Actual condition in the existing marketthe existing market

• Expand the share Expand the share marketmarket

• Design an action Design an action planplan

• Market researchMarket research

• Data analysisData analysis

Alternative VisionAlternative Vision

• Focus on general Focus on general frameworkframework

• Design a strategic Design a strategic action planaction plan

• Implementation of Implementation of the strategy into the strategy into your companyyour company

• How to overcome How to overcome limits in strategic limits in strategic planplan

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Critics on Classic Critics on Classic visionvision

1.1.Does not allow to get out Does not allow to get out the Red Oceanthe Red Ocean

2.2.Bad communication between Bad communication between management and operational management and operational levelslevels

3.3.Lack in long term planningLack in long term planning

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Focus on general Focus on general frameworkframeworkEffectsEffects• Shows the sector situationShows the sector situation• Shows players strategiesShows players strategies• Shows company’s strategiesShows company’s strategies

If the company does not have a strategic If the company does not have a strategic profile:profile:

• Confused operationsConfused operations• Not well defined strategiesNot well defined strategies• Lack in communicationLack in communication

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4. Visual communication

3. List of visual strategies

2. Visual exploration

1. Visual awakening

The 4 moment in visual strategy

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1. Visual awakening


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1. Visual awakening1. Visual awakening

Make a comparison between your Make a comparison between your business and your competitors business and your competitors drawing a value curve of your drawing a value curve of your strategic plan.strategic plan.

Identify where your strategy Identify where your strategy need to be modify and where need to be modify and where need inprovementsneed inprovements..

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1. Visual awekening

Comments:

•Who and how do we get the visual awekening?

•Focus only on competitive factors

•Do not consider the company structure

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1. Visual awakening


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2. Visual exploration2. Visual exploration

Market exploration to research a blu Market exploration to research a blu oceanocean

Create a value curve for product’s Create a value curve for product’s featuresfeatures

Identify which factors need to be Identify which factors need to be changed, modified of eliminated.changed, modified of eliminated.

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6. Analyze theEnvironmental

changes

5. Analyze the Emotional and

Functional appeal

4. Analyze complementary

products or services

3. Analyze who are Your target-buyers

2. Analyze startegic groups into each sector

1. Analyze alternative

secors

6 Tracks to discover the blue ocean

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Comments:

•Truthfulness of datas•Too large analysis•Too far from real market

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1. Visual awakening


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3. Visual strategies 3. Visual strategies surveysurveyDesign a strategic framework most Design a strategic framework most desiderable for the company, from desiderable for the company, from market observationmarket observation

Ask for a feedback for each Ask for a feedback for each alternative scenario to clients, alternative scenario to clients, non-clients, competitorsnon-clients, competitors

Use feedback to design a better Use feedback to design a better strategystrategy

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1. Visual awakening


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4. Visual Communication4. Visual Communication

Promote only projects and Promote only projects and operations that fill up gap and operations that fill up gap and make the new strategy applible.make the new strategy applible.

Put all ‘before and after’ Put all ‘before and after’ scenario in one together to scenario in one together to have a global visionhave a global vision

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CASE ASUS: The bonsai CASE ASUS: The bonsai laptoplaptop

Asus Eee pcAsus Eee pcInitial conditions:• Saturated market• Demanding buyers and design oriented• Mature serctor• Difficoulties to apply differentiation

Asus strategy:• Launch low cost product• Less technical features• Allow the use of common softweres

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CASE ASUS: The bonsai CASE ASUS: The bonsai laptop laptop (continue)(continue)

Analysis of this new market space through the 4 visual strategy’s steps

Phase 1:

• High competition in laptop market (small margins)

• Clients segmentation changed

• New sensible areas in laptop produces

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Phase 2:

• advantage compared with the growing price

• .Asus reasearch and define who are laptop users

• 5 forces analysis

• Asus make a value chart to define which are the key features for clients

• After the phase 1, now we are more focused on what is important for clients

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Phase 3: • Asus evaluate which are the features to mantain and which shoud be taken off.

• On these considerations Asus hypothesizes more alternatives to find out which one is more compatible with customers needs (clients, non clients)

Through feedback approach they ordered the options.

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Before

• Strong competition

• Low differentiation

• Strong imitation

• Static demand

After• New market area• Less competitors• First mover advantages

• Less technical features

• New clients

Phase 4•Comparison between before and after.

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REMOVE

•Cd-Rom•Less pheriferical doors

INCREASE

•Autonomy•Wireless connectivity

•VersatilityRIDUCE

•Weight•Dimensions•Performance•Display•Video processor

CREATE

•Coloured Case•Integreted Card Reader

•Anti-shock system

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Internet Staeistic Share

5.5%

3.1%

2.7%

2.1%

1.6%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

HP Pavillon dust

Acer Aspire One

Dell Inspiron 1525

Asus EEE PC

Dell Inspiron Mini

TOP 5 MOST POPULAR LAPTOP

Share Market

Fonte: www.notebookreview.com


Notebook PCMark05 Score

Acer Aspire One (1.60GHz Intel Atom, Intel GMA 950)

1,555 PCMarks

ASUS Eee PC 901 (1.60GHz Intel Atom) 746 PCMarks

ASUS Eee PC 900 (900MHz Intel Celeron M ULV) 1,172 PCMarks

HP 2133 Mini-Note (1.6GHz VIA C7-M ULV) 801 PCMarks

HTC Shift (800MHz Intel A110) 891 PCMarks

ASUS Eee PC 4G (630MHz Intel Celeron M ULV) 908 PCMarks

ASUS Eee PC 4G (900MHz Intel Celeron M ULV) 1,132 PCMarks

Everex CloudBook (1.2GHz VIA C7-M ULV) 612 PCMarks

Sony VAIO TZ (1.20GHz Intel Core 2 Duo U7600) 2,446 PCMarks

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PCMARK05 is a softwere that allow the selection of your preferences to define which laptop fit more with clients needs.

Fonte: www.pcworld.it


Horizontal axis: Price Dimension Performance (Mgh) Weight (Kg) RAM/HD (Gb) Cd-rom (reader) Display (inchs) Design Wi-fi/ Versatility Usefulness (common

softwere) Anti-shock system

Vertical axis: High Low

*Value from 0 to 5, where 0 is the mimimum and 5 maximum

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Fonts:- www.asus.com- www.netbook.ccom- www.tom’shardware.com- www.pcworld.it- www.youtube.it/asuseeepc

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Alto

Basso

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Shared Knowledge into Shared Knowledge into the Strategic Frameworkthe Strategic Framework

Through the Strategic Framework:Through the Strategic Framework:•We want optimize interaction and We want optimize interaction and shared information between shared information between business unit and Top Management business unit and Top Management

•Increase strategic best Increase strategic best practices transfer from a practices transfer from a business unit to another onebusiness unit to another one

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Strategic Framework inStrategic Framework inSamsung CaseSamsung Case

• Starting problemStarting problem

• ApproachApproach

• ResultsResults

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Starting problem:Starting problem: Manager authonomy has been weakened by Manager authonomy has been weakened by business unit interactionbusiness unit interaction

Approach:Approach:• Strategic framework Strategic framework institutionalization at corporate institutionalization at corporate levellevel

• Opportunities analysis into new Opportunities analysis into new businessbusiness

• Value Innovation Program (VIP) projectValue Innovation Program (VIP) project

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Results: Results: • New knowledge and development in Value New knowledge and development in Value innnovationinnnovation

• Better communication between units, 80 Better communication between units, 80 new projects developpednew projects developped

• 10 new offices to support growing 10 new offices to support growing demanddemand

• High relults in hypercompetitive High relults in hypercompetitive sectors (Flat screen, mobile phone SGH sectors (Flat screen, mobile phone SGH T-100)T-100)

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InnovationsInnovations: :

• Annual meeting to share corporate culture Annual meeting to share corporate culture and achieved results and achieved results

• Internal competition to:Internal competition to:– Push in better performancePush in better performance– Make the company culture strongerMake the company culture stronger

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Strategy inside the Strategy inside the companycompany

Today Tomorrow

Pioneers

Migrators

Settlers

Map Pioneers-Migrators-Settlers

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Business Portfolio Business Portfolio ManagementManagement

and P-M-S Mapand P-M-S Map• PMS Map is an efficient way to organize PMS Map is an efficient way to organize value innovation value innovation

• Comparison between current performance and Comparison between current performance and tomorrow performancetomorrow performance

• ““Pioneers”: Pioneers”: – Need higher investmentsNeed higher investments– Reppresent slower growing performance Reppresent slower growing performance – Gave to possibility to go far from Gave to possibility to go far from hypercompetitive market creating blu oceanshypercompetitive market creating blu oceans

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Growing potentialGrowing potentialin Business Portfolioin Business Portfolio

Segmentation in current and future business Segmentation in current and future business figure out through:figure out through:

• SETTLERSSETTLERS

• MIGRATORSMIGRATORS

• PIONEERSPIONEERS

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• SETTLERS:SETTLERS:– Are businesses already known and Are businesses already known and they present a value curve they present a value curve corrisponding with other business corrisponding with other business into the marketinto the market

– Businesses that do not have large Businesses that do not have large marging due to high competitive marging due to high competitive environment environment

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• MIGRATORS: MIGRATORS: – Represent the connection point Represent the connection point between other two classes of between other two classes of competitorscompetitors

– These businesses are in an other These businesses are in an other level in comparison with the level in comparison with the standard competitors but do not standard competitors but do not represent large differences in the represent large differences in the most important factorsmost important factors

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• PIONEERS: PIONEERS: – Look for new markets, new Look for new markets, new competitive spacescompetitive spaces

– Create value innnovationCreate value innnovation– The high effort in this kind of The high effort in this kind of research corrispond with the high research corrispond with the high marging of Blue Ocean marketsmarging of Blue Ocean markets

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Over the strategic Over the strategic planning limitsplanning limits

Management:Management:• Develop the idea that:Develop the idea that:

– Strategic planning should be based on collective Strategic planning should be based on collective implementationimplementation

Highlight the importance of more human Highlight the importance of more human contact and less documents.contact and less documents.

Propose to draw a global view instead of Propose to draw a global view instead of focus on data.focus on data.

Not valid alternative to Strategic Not valid alternative to Strategic PlanningPlanning

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Current demand Current demand maximizationmaximization

Red OceanRed Ocean

• Focus on current Focus on current customerscustomers

• HypersegmentationHypersegmentation

Blu oceanBlu ocean

• Take in Take in consideration also consideration also Non-clientsNon-clients

• Find out connection Find out connection points between points between current clients and current clients and non-clientsnon-clients

• Consider value Consider value factorsfactors

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Critics on current Critics on current demand maximizationdemand maximization

Red Ocean Red Ocean

• Creating too small Creating too small targets could targets could limits number of limits number of possible interested possible interested customerscustomers

Blu OceanBlu Ocean

• Focus on Non-Focus on Non-clients could clients could remove you from remove you from your current your current targets.targets.

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The 3 NON-CLIENTS The 3 NON-CLIENTS levelslevels

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First level

Market

Second levelThird level

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CASE ASUS: The bonsai CASE ASUS: The bonsai laptop laptop The 3 NON-CLIENTS

levels

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First level

Market

Secondlevel

Third level

ASUS involved Non-clients from first and second levels

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First level NON-CLIENTSFirst level NON-CLIENTS

Are:Are:

• Who use only a small part of what Who use only a small part of what is available in the market or less is available in the market or less that what they could effortthat what they could effort

How to reach them:How to reach them:

•Find out what makes Non-clients Find out what makes Non-clients dissatisfied in current market dissatisfied in current market offer offer

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Pret-a-Manger case

Context :

• Who works in city centre or do not have enough time for lunch has three choice:– Restaurant– To Bring food from home– Does not have lunch

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Pret-a-Manger caseKey factors on Pret-a-Manger strategy:

– Less time for lunch– Whelty food – Affordable price– Nutritional values for each products– Menu on line– Delivery service– Recipe printed on take-away bags– Wide variety of products

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Pret-a-Manger case• Horizontal axis:

Price Food quality Waiting minutes Shops strategic locations

Wide products offer Wide services offer

Vertical axis: High Law

*In a scale from 0 to 5, where ) is the minimum and 5 is the maximum.

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Sources:- www.pret.com- Http://muvara.blogspot.com- www.london-luton.co.uk- www.ciao.it/PretA_manger

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Pret-a-Manger case

CURVA DEL VALORE

Prezzo Qualità cibo Rapidità Dislocazionestrategica

punti vendita

Varietà offerta Ambiente

Pret-aManger

Ristorante

Cibo da casa

Alto

Basso

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Second level Non-Second level Non-clientsclients

Are:Are:• Who does not want to use of cannot afford Who does not want to use of cannot afford to use what is offered in the marketto use what is offered in the market

• Who satisfy the offer in other way or Who satisfy the offer in other way or simply do not give importance to itsimply do not give importance to it

• e.g. JCD (french advertisement agency)e.g. JCD (french advertisement agency)

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CASO JCDecauxCASO JCDecauxJCD is an advertisement agency that rend JCD is an advertisement agency that rend external spacesexternal spaces

At the beginning:At the beginning:– Dinamics billboardsDinamics billboards– Billborads on high frequence streetsBillborads on high frequence streets

Low value perception on offered services because Low value perception on offered services because clients were used to find those from every clients were used to find those from every agency.agency.

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CASO JCDecauxCASO JCDecaux

Innovation:Innovation:

• JCD revolution the offer JCD revolution the offer proposing street furniture (Long-proposing street furniture (Long-term agreement with public term agreement with public institutions to exclusive rights institutions to exclusive rights on advertisement campaign an on advertisement campaign an investing in urban furniture) investing in urban furniture)

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CASO JCDecauxCASO JCDecaux

• Horizontal axis: Roll-out Operative margines Visibility Invasive environmental

Restatement estatement (%) Maintenance costsMaintenance costs

Vertical axis: High low

**Value from 0 to 5, where ) is the minimum and 5 is the maximum

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Sources:- http://www.igpdecaux.it/site/ricerche/home.htm-www.jcdecaux.fr

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Value curve JCDValue curve JCD

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High

Low

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Third level NON-CLIENTSThird level NON-CLIENTS

Are:Are:• The more distant clients from a The more distant clients from a current sectorcurrent sector

• No competitors looked at them, they No competitors looked at them, they are unexplored because their needs are unexplored because their needs and their business opportunities are and their business opportunities are considered market prerogativeconsidered market prerogative

• e.g. JSF (Joint Strike Fighter)e.g. JSF (Joint Strike Fighter)

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CASE JSF (Joint Strike CASE JSF (Joint Strike Fighter)Fighter)

Past context:Past context:

•Marines, Navy and US air force Marines, Navy and US air force was used to design and realize was used to design and realize different place with different different place with different features; that was the cause features; that was the cause for high cost at Pentagon.for high cost at Pentagon.

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CASE JSF (Joint Strike CASE JSF (Joint Strike Fighter)Fighter)

Innovation:Innovation:

•JSF resume in one airplane all JSF resume in one airplane all the common features for three the common features for three military corps reducing military corps reducing drastically costs and drastically costs and satisfying the entire military satisfying the entire military demand.demand.

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Air forceAir force Navy Navy Marines Marines

Leggerezza Leggerezza Due motori Due motori STOVL STOVL PersonalizzaziPersonalizzazione del designone del design

Avioelettronica integrata Avioelettronica integrata Due sedili Due sedili Leggerezza Leggerezza

Tecnologia stealthTecnologia stealth Ali larghe Ali larghe Ali corte Ali corte

Motore supercruise Motore supercruise Lunga durata Lunga durata Contromisure Contromisure

Lungo raggio Lungo raggio Lungo raggio Lungo raggio

Agilità Agilità Facilità di Facilità di manutenzione manutenzione

Armamenti aria-aria Armamenti aria-aria Armamenti aria-aria e Armamenti aria-aria e aria-terra aria-terra

Armamenti aria-terra Armamenti aria-terra PersonalizzaziPersonalizzazione degli one degli armamentiarmamenti

Carico interno fisso di Carico interno fisso di armamenti armamenti

Carico di armamenti Carico di armamenti ampio/flessibili ampio/flessibili

Carico di armamenti Carico di armamenti ampio/flessibile ampio/flessibile

Armi elettroniche Armi elettroniche

Un aereo adatto ad ogni Un aereo adatto ad ogni missione missione

Un aereo adatto ad ogni Un aereo adatto ad ogni missione missione

Un aereo adatto ad ogni Un aereo adatto ad ogni missionemissione

PersonalizzaziPersonalizzazione delle one delle missionimissioni

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CASE JSF CASE JSF (continue)(continue)

CURVA DEL VALORE

Prezzo

Pers.DesignPers.Arm.

Pers.Missioni

Agilità

Tecnologia Stealth

Manutenzione

Durata

Contromisure

STOVL

F-35 JSFF-22

Alto

Basso

5858

Fonte: “Strategia Oceano Blu”

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CASE JSF CASE JSF (continue)(continue)

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