Visual Tools for Comprehensively Assessing, Predicting, Designing, and Managing Blue Ocean Success (… and Red Ocean Failure?) Dr. Rod King Thought Leader

Visual Tools for Comprehensively Assessing, Predicting, Designing, and Managing Blue Ocean Success(… and Red Ocean Failure?)

Dr. Rod KingThought Leader on Blue Ocean Success

BLUE OCEAN SUCCESS MANAGEMENT

Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing

PERSONAL SUCCESS TOLLGATESWhat is (Multi-level) Personal Success? What is the Potential of Each Personal Tollgate for Blue Ocean Success?

UNIVERSAL Success

World (International) Success

Society (National) Success

Community (Local) Success

Family Success

Individual Success

Note: Blue Ocean = ‘Above Best-in-class’ = ‘Virtually Ideal’

mailto:[email protected]

http://businessmodels.ning.com/

http://twitter.com/RodKuhnKing


BLUE OCEAN SUCCESS IN BUSINESS




BUSINESS STRATEGY MATRIX

• How to more specifically get to desired business success?

TOOLS OF BLUE OCEAN SUCCESS

MANAGEMENT

SCALABLE MARKETS & SCENARIOS

• What is the main customer job, activity, and/or value proposition?• What tools/ecosystem do customers currently use to complete customer job?• What is ideal tool for completing job?

BLUE OCEAN RADAR

• Where is current business success?• Where is desired business success?• How to generally get to desired business success?• What is customer value proposition?

BUS. SUCCESS VOICE/SCOREBOARD

• What is the current business success?• What is the goal or desired/potential business success?• How to track or monitor performance?

BLUE OCEAN MAP

• Where is current business success?• Where is desired business success?• How to generally get to desired business success?

BLUE OCEAN COMPASS

• Where exactly is business success now?• Where exactly is desired success?• How to more specifically get to desired business success?• What is customer value proposition?

BUSINESS SUCCESS GOALS/TOLLGATES

• What are (multi-level) business goals/success?• What is the potential of each business goal/tollgate for Blue Ocean Success?

BUSINESS SUCCESS RADAR

• How to generally get to the desired business success?


TOOLS OF BLUE OCEAN SUCCESS MANAGEMENT




11


SIMPLE PROCESS FOR BLUE OCEAN SUCCESS MANAGEMENT

1. For each business success tollgate, • describe the existing and desired degree of success (positives and negatives).• quantify the existing and desired degree of success (positives and negatives).

2. Identify the most critical or “weakest” business tollgate, that is, the tollgate with the least degree of success.

3. For the weakest business tollgate, use resources within and across the business network to increase the degree of success to the level required for Blue Ocean Success.

4. GO TO STEP 2.

5. OTHERWISE, prepare, execute, and monitor plan of each business tollgate so that desired Blue Ocean Success is comprehensively achieved.

Note: There is a hierarchy of 6 business tollgates (goals, portals, or constraints) in business:Employees (Team); Product/Service Design; Customer; Business Investor; Value Chain (Business Model); Ecosystem. Interfaces include Distribution/Channels; Processes; Information Exchange.





HIERARCHY OF BUSINESS SUCCESS GOALSWhat are the Goals for Blue Ocean Success?

ECOSYSTEM (Industry) Success

Value Chain (Bus. Model) Success

Business Investor Success

Customer Success

Product or Service Design Success

Employees (Team) Success






BUSINESS SUCCESS TOLLGATESWhat is (Multi-level) Business Success? What is the Potential of Each Business Tollgate for Blue Ocean Success?

ECOSYSTEM (Industry) Success = Delight/Pain = Advantages/Disadvantages = 1/Degree of Trade-Off(Ideal Success involves Zero Trade-Off)

Value Chain (Bus. Model) Success = Strengths/Weaknesses = Opportunities/Threats(Ideal Success involves Zero Trade-Off)

Business Investor Success = Revenue/Cost = Reward/Risk(Ideal Success involves Zero Trade-Off)

Customer Success = Delightful Immersive Experience/Painful Experience

(Ideal Success involves Zero Trade-Off)

Product or Service Design Success = Useful Features/Harmful Features


Employees (Team) Success = Strengths/Weaknesses






ECOSYSTEM (Industry) SUCCESS

BLUE OCEAN SUCCESS IN A BUSINESS NETWORK:

BUSINESS MODEL/INVESTOR SUCCESS

DISTRIBUTION/CHANNELS SUCCESS

EMPLOYEES (TEAM) SUCCESS

CUSTOMER SUCCESS PRODUCT/SERVICE DESIGN SUCCESS

SUPPLIER SUCCESS MACHINERY/FACILITY SUCCESS


ELEMENTS OF BLUE OCEAN SUCCESS IN A SCALABLE BUSINESS NETWORK





Template for BUSINESS SUCCESS TOOLS(Strategic Questions)

SPACE/TIME/PROCESS BUSINESS GOALS

BLUE OCEAN(GOALS) SUCCESS

IDEAL (PERFECT) SUCCESS

ECOSYSTEM (Industry)Success (+/-)

10

VALUE CHAIN (BUS. MODEL) Success (+/-)

10

BUSINESS INVESTORSuccess (+/-)

10

CUSTOMERSuccess (+/-)

10

PRODUCT/SERVICE DESIGN Success (+/-)

10

EMPLOYEES (TEAM)Success (+/-)

10

Business/Sector/Ecosystem/Industry: …………………………………………….……………………………………….…………………

Note: Success = Delight (+)/Pain (-)For a quick evaluation, Success for each tollgate can be rated on an ordinal scale: from 1 (low) to 10 (high)

(Logo)





BUSINESS SUCCESS VOICEWhat is the Current Business Success? What is the Goal or Desired/Potential Business Success?

TRADE-OFFS BUSINESS GOALS

PAIN (-) DELIGHT (+) BLUE OCEAN(GOALS) SUCCESS

IDEAL (PERFECT) SUCCESSPresent:

WEAKNESSESFuture:THREATS

Present:STRENGTHS

Future:OPPORTUNITIES


10


10


10


10


10


10

Business: …………………………………………………………………………….…………………………………………………….…………………


(Logo)





BUSINESS SUCCESS SCOREBOARD What is the Current Business Success? What is the Desired/Potential Business Success?

SPACE/ TIME TOLLGATE

Business 1

Business 2

RED OCEANBUSINESS

BEST-IN- CLASS BUSINESS

BLUEOCEAN SUCCESS


ECOSYSTEMSuccess (+/-)

Slow/saturated/declining sectorHighly competitive

Fast growing/emerging/‘uncontested’ sector or industry

10


Low costUndifferentiatedConventional

Low cost/Free/Freemium/PremiumNovel/Differentiated

10


Average/declining/ low profit & ROIImitable IP

Extraordinary profit & ROIDefensible IP

10


Average or small share of existing market (demand)

Extraordinary share of larger, emerging market (demand)

10


Commoditized/ same experienceLarge trade-off

Unique/immersive/ social experienceLittle or no trade-off

10


Average compe-tence/experienceIn-the-box thinking

Highly competent/ experiencedInnovative/Creative

10

Sector/Ecosystem/Industry: …………………………………………….…………………………………………………….…………………


(Logo)





Customer Job/Value Proposition: ……………………………………………………………………………………….…………………

BUSINESS SUCCESS RADARHow to Generally Get to the Desired Business Success?

Name of Business: ………………………………………………………………………………………………………………………………………

Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………

Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

ECOSYSTEM Success


Product/Service Design Success

Customer Success


Value Chain (Business Model) Success

0

5

10

Business Success Radar for ………………………………………..

Ideal (Blue Ocean) Business Worst (Red Ocean) Business

ELEMENTS OF BUSINESS SUCCESS RADAR:

Competitive Advantage Strategies• Employees (Team) Strategy

• Product/Service Design Strategy

• Customer Strategy

• Business Investor Strategy

• Value Chain (Business Model) Strategy

• ECOSYSTEM (Industry) Strategy

Value Proposition

Targeted Customer Segments (Niches)

(Logo)

(Logo)





OBJECTIVES/ ACTIVITIES BUSINESS STRATEGIES

ELIMINATE REDUCE INCREASE CREATE BLUE OCEAN (TARGET)SUCCESS

IDEAL SUCCESS(IMPACT)

ECOSYSTEM (Industry)STRATEGIES

10

VALUE CHAIN (BUS. MODEL) STRATEGIES

10

BUSINESS INVESTOR STRATEGIES

10

CUSTOMER STRATEGIES

10

PRODUCT/SERVICE DESIGN STRATEGIES

10

EMPLOYEES (TEAM) STRATEGIES

10


BUSINESS STRATEGY MATRIXHow to More Specifically Get to the Desired Business Success?

Name of Business: ………………………………………………………………………………………………………………………………………


Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

(Logo)






ELIMINATE- Discard- Transfer- Outsource

REDUCE- Trim/Subtract- Segment- Nest/Merge

INCREASE- Add/Combine- Multiply/Separate- Expand

CREATE- Integrate- Reverse- (A)symmetric

BLUE OCEAN TARGET



CompetitionSubsidiesDisadvantages

SubstitutesPainEntry barriers

CollaborationBus. IntelligenceBarriers to exit

PlatformNetwork effectsBarriers to entry

10


Waste; PollutionInefficienciesDefects

IntermediariesWeaknesses Threats

Integration/MergerStrengthsOpportunities

PartnershipsDistribution Scalability/Niches

10


InventoryBarriersConstraints

Cost (Fixed)DebtRisk

Revenue; ROIMarket shareDigitalization; IP

BrandingAlignmentProcesses

10

CUSTOMER STRATEGIES

Trade-offsComplaintsDefects

PriceDelivery timeResponse time

Quality; Co-creationConvenienceDifferentiation

PersonalizationDiscountsLoyalty

10


Harmful features ComplexityTrade-offs

Trade-offsSize; RigidityInaccessibility

Useful features Efficiency; SimplicityConvenience

Novel designSocial/fun ‘tool’Feedback

10


AbsenteeismLatenessApathy

TurnoverHazardsProject delay

ProductivityInnovation/SharingTraining/Learning

Core values Culture; TrustLeadership

10


BUSINESS STRATEGY MATRIXHow to Get to the Desired Business Success? (Checklist of Generic Strategies)

Name of Business: ………………………………………………………………………………………………………………………………………


Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

(Logo)





SCENARIO

MARKET/TOOL

Business/Ecosystem: 1

Business/Ecosystem: 2

RED OCEANBUSINESS

BEST-IN-CLASS BUSINESS

BLUE OCEAN TARGET

IDEAL TOOL(IMPACT)

UNIVERSAL (Industry)TOOL (PRODUCT & PARTS)

10

WORLD/INTERNATIONALTOOL (PRODUCT & PARTS)

10

SOCIETY/NATIONALTOOL (PRODUCT & PARTS)

10

COMMUNITY/LOCALTOOL (PRODUCT & PARTS)

10

FAMILY/GROUP/BUSINESSTOOL (PRODUCT & PARTS)

10

PERSONAL/PORTABLETOOL (PRODUCT & PARTS)

10

Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

SCALABLE MARKETS & SCENARIOSWhat are Alternative Markets, Opportunities, and Tools for Blue Ocean Success?

Name of Business: ………………….…………….…………..…………..……………………………………………………………………………

Sector/Ecosystem/Industry: ………………………….……………………………………………………………………………………………

Main Customer Job/Activity/Value Proposition: …………………………….……………………………………….…………………

(Logo)





TIMELINE BUSINESS STRATEGIES

Month 1 Month 2 Month … CHAMPION(OWNER/ TEAM)

BLUE 0CEAN (TARGET)SUCCESS



10


10


10

CUSTOMER STRATEGIES

10


10


10


PROGRAM CHART FOR BLUE OCEAN SUCCESS MANAGEMENTHow to Execute Strategies and Monitor Progress Towards the Desired Business Success?

Name of Business: ………………………………………………………………………………………………………………………………………


Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

(Logo)





CASE STUDY ON BLUE OCEAN SUCCESS MANAGEMENT

CIRQUE DU SOLEIL (Entertainment Sector)





BUSINESS SUCCESS SCOREBOARD FOR CIRQUE DU SOLEILWhat is the Current Business Success? What is the Desired/Potential Business Success?

SPACE/ TIME BUSINESS GOALS

Ringling Bros & Barnum Circus

Smaller Regional Circuses

Live Theater(Non-circus)


CIRQUEDU SOLEIL TARGET



Circus entertainmentDeclining demand

Live theater entertainmentGrowing demand

Circus-Theater entertainment High demand (6.5)

10


Low costCommoditized/undifferentiated

High price/brand Premium priceNovel/unique/ differentiated (7)

10


Average/declining profitCircus goer

High/growing profitTheater goer

Extraordinary profit & ROI/ircus-Theater goer (8)

10


Fun & HumorThrill & DangerLow ticket price Animal cruelty

Theater/Artistic sophisticationHigh ticket priceRich experience

Circus/Theater sophisticationPremium priceRich experience (8)

10


Circus showMultiple arenasAisle sales

Theatrical acts Single stageMusic/Dance

Circus-theater themes/stageMusic/Dance (8)

10


Star circus performersAnimal (shows)

ActorsDancersSingers

ActorsOrdinary circus performers (7)

10

Sector/Ecosystem/Industry: Live Acts/Entertainment

Note: Success = Delight (+)/Pain (-)For a quick evaluation, Success at each level can be rated on an ordinal scale: from 1 (low) to 10 (high)





Customer Job/Value Proposition: “High quality artistic entertainment”


Name of Business: Cirque du Soleil


Mission: “To invoke the imagination, provoke the senses and evoke the emotions of people around the world”

ECOSYSTEM Success



CUSTOMER Success



0

5

10

Business Success Radar for CIRQUE DU SOLEIL

Ideal (Blue Ocean) Business Ringling Bros & Barnum Circus Cirque du Soleil


Competitive Advantage Strategies• Employees (Team) Strategy Increase Employees Success to Level 7• Product/Service Design Strategy Increase Product/Service Success to Level 8• CUSTOMER Strategy Increase Customer Success to Level 8• Business Investor Strategy Increase Business Investor Success to Level 8• Value Chain (Business Model) Strategy Increase Value Chain Success to Level 7• ECOSYSTEM (Industry) Strategy Increase ECOSYSTEM Success to Level 6.5

Value PropositionHigh quality artistic entertainment

Targeted Customer Segments (Niches)• Circus-goers• Theater/Live Act-goers







ELIMINATE REDUCE INCREASE CREATE CIRQUEDU SOLEIL TARGET



Direct (head-to-head) competition

Waste Market size Hybrid of Circus-Theater Entertainment

6.5 10


InefficienciesEnvironmental pollution

Cost DifferentiationMarket shareValue added

Uncontested market space

7 10


WasteComplexityDefects

CostExcessesRedundancies

RevenueProfit; ROIValue

New prospects and customers

8 10

CUSTOMER STRATEGIES

Aisle (ticket) concessions

Fun & HumorThrill & Danger

Quality of artistic enter-tainment;

Themed act Music/DancePremium price

8 10


Arenas Circus props/ equipment

Unique venueTicket price to premium

Theatrical themes and plots

8 10


Star performersAnimal (shows)

Actors 7 10

Customer Job/Value Proposition: “High quality artistic entertainment”

Name of Business: Cirque du Soleil


Mission: “To invoke the imagination, provoke the senses and evoke the emotions of people around the world”





CASE STUDY ONBLUE OCEAN SUCCESS MANAGEMENT

YOUTUBE (Technology Sector)




http://videomaker.com/community/blogs/videonews/files/2009/01/youtube_logo.jpg


BUSINESS SUCCESS SCOREBOARD FOR YOUTUBEWhat is the Current Business Success? What is the Desired/Potential Business Success?

SPACE/ TOOL BUSINESS GOALS

Web-storage/ hosting

E-mail(Hard disk)

Manual/DVD-R/Cassettes


YOUTUBE(TARGET)SUCCESS



Video Experience-sharingGrowing demand

Video Experience-sharingDeclining demand

Video Experience-sharingGrowing demand

10


FreemiumUndifferentiated


FreeNovel/unique/ differentiated (7)

10


Low profit & ROIInternet user/ owner of content

Non-commercialHobbyists/Owners of video content

High number of registered usersInternet user

10


Global accessibi-lity of videosFast accessHigh storage cost

Long hours of playHigh quality of videoSlow delivery timeCost of DVD-R

Global accessibility of videos/Free & instant accessSocial networking

10


Viewed onlineLimited free spaceSlow loading time

Viewed on TV/VCR/ CamcorderDVD-R/Cassettes

Easy to use/OnlineLarge free spaceFast loading time

10


Professionals Hobbyists Experienced/ innovative professionals

10

Sector/Ecosystem/Industry: Video Experience-sharing/Online Social Network/Computing







Customer Job/Value Proposition: “Broadcast Yourself”


Name of Business: YouTube


Mission: To easily and quickly share videos on the Internet and online communities

ECOSYSTEM Success



CUSTOMER Success



0

5

10

Business Success Radar for YOUTUBE

Ideal (Blue Ocean) Business Web-storage/Hosting YouTube


Competitive Advantage Strategies• Employees (Team) Strategy Increase Employees Success to Level 8• Product/Service Design Strategy Increase Product/Service Success to Level 8• CUSTOMER Strategy Increase Customer Success to Level 8• Business Investor Strategy Increase Business Investor Success to Level 8• Value Chain (Business Model) Strategy Increase Value Chain Success to Level 8• ECOSYSTEM (Industry) Strategy Maintain ECOSYSTEM Success to Level 8

Value Proposition“Broadcast Yourself”

Targeted Customer Segments (Niches)• Hobbyists/Amateur owners of video content• Internet users









ELIMINATE REDUCE INCREASE CREATE YOU TUBE (TARGET)SUCCESS




Waste Market sizePotential for acquisition

Platform and social network for video-sharing

8 10


Inefficiencies Cost DifferentiationMarket shareValue added


8 10




Number of registered users

New prospects and customers

8 10

CUSTOMER STRATEGIES

Fees for storing videos

Inconvenience of uploading and sharing videos

Storage spaceSpeed of video up/download

Social networkWeb pages for video sharing

8 10


Need for users to write scripts or html code

Time for upload-ing and down-loading videos

Storage spaceTags for video‘Findability’

Feedback/rating systemEmbed code

8 10


Word-of-mouth marketingViral videos

8 10

Customer Job/Value Proposition: “Broadcast Yourself”

Name of Business: YouTube


Mission: To easily and quickly share videos on the Internet and online communities






CASE STUDY ON BLUE OCEAN SUCCESS MANAGEMENT

SOUTHWEST AIRLINES (Transportation Sector)





BUSINESS SUCCESS SCOREBOARD FOR SOUTHWEST AIRLINESWhat is the Current Business Success? What is the Desired/Potential Business Success?

SPACE/ TIME BUSINESS GOALS

Average Airline

Car Transport


SOUTHWEST AIRLINES TARGET



Short-haul transportationGrowing demand

Short-haul transportationGrowing demand

Short-haul transportationGrowing demand (7)

10




Low cost/’No frills’Novel/unique/Differentiated (7)

10


Average profitIntercity traveler

Low profitIntracity traveler

High profitFrequent low-cost traveler (8)

10


Fast travelTiered seatingLow ticket price

Slow travelDelaysLow fare

Faster travel at lower cost/Friendly service/On time (8)

10


Lounges/MealsHub-and-spoke departures

No lounge/mealFrequent point-to-point departures

Small lounge/mealFrequent point-to-point departures (8)

10


PilotsCrewGround staff

Driver PilotsCrewGround staff (8)

10

Sector/Ecosystem/Industry: Short-haul Airlines/Transportation






Customer Job/Value Proposition: “The Speed of a Plane at the Price of a Car …”


Name of Business: Southwest Airlines


Mission: “Dedication to the Highest Quality of Customer Service …”

ECOSYSTEM Success



CUSTOMER Success



0

5

10

Business Success Radar for SOUTHWEST AIRLINES

Ideal (Blue Ocean) Business Average Airline Southwest Airlines


Competitive Advantage Strategies• Employees (Team) Strategy Increase Employees Success to Level 8• Product/Service Design Strategy Increase Product/Service Success to Level 8• CUSTOMER Strategy Increase Customer Success to Level 8• Business Investor Strategy Increase Business Investor Success to Level 8• Value Chain (Business Model) Strategy Increase Value Chain Success to Level 7• ECOSYSTEM (Industry) Strategy Maintain ECOSYSTEM Success to Level 7

Value Proposition“The Speed of a Plane at the Price of a Car …”

Targeted Customer Segments (Niches)• Frequent, low-cost traveler






OBJECTIVES/ ACTIVITIES BUSINESS NETWORK

ELIMINATE REDUCE INCREASE CREATE CIRQUEDU SOLEIL TARGET




Waste Market size Hybrid of inter-city and intra-city travelers

7 10


InefficienciesEnvironmental pollution

CostTravel agents

DifferentiationMarket shareValue added


7 10




RevenueProfit; ROIValue

New prospects and customersFuel hedging

8 10

CUSTOMER STRATEGIES

Tier of seating Size of meals/lounges

Speed/flexibility of travel/No. of free luggage

Friendly serviceHumor

8 10


In-flight entertainment

Landing fees by not using main airports

Standardization of aircraftsUsage of aircraft

Frequent point-to-point departures

8 10


Turnaround timeUnion member-ship

Friendly and fun service/Profit-sharing plan

8 10

Customer Job/Value Proposition: “The Speed of a Plane at the Price of a Car …”

Name of Business: Southwest Airlines


Mission: “Dedication to the Highest Quality of Customer Service …”




1. Kaplan, R.S.; Norton, D.P. (1996) The Balanced Scorecard. Boston: Harvard Business School (HBS) Press.

2. Kaplan, R.S.; Norton, D.P. (2008) The Execution Premium. Boston: Harvard Business School (HBS) Press.

3. Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press.

4. King, R. (2009) The Zoomable Radial Grid: A Simple Visual Tool for Managing and GeneratingIdeas in Multi-disciplinary Teams. Fresno, California: Value Quotient Management.

Dr. Rod King

Thought Leader, Consultant, and Trainer on Blue Ocean Success Management

[email protected] & http://businessmodels.ning.comhttp://twitter.com/RodKuhnKing

REFERENCES




Documents

Visual Tools for Comprehensively Assessing, Predicting, Designing, and Managing Blue Ocean Success (… and Red Ocean Failure?) Dr. Rod King Thought Leader