BLUE OCEAN STRATEGY vs. BLUE OCEAN‐BUSINESS MODEL Instantly Learn and Apply Best Practice Tools for Exponential Business Growth Dr. Rod King Consultant & Trainer on Business Model Analysis, Design, and Innovation [email protected]& http://businessmodels.ning.com
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Blue Ocean Strategy Book vs Blue Ocean Business Model_Dr Rod King
During tough competitive situations and rough economic times, businesses desperately need tools for maintaining and exponentially increasing business growth. However, the best tools in business appear complex and can hardly be applied by lone entrepreneurs and small businesses.
The purpose of this publication is to present the methodology of Blue Ocean-Business Model (BOBM) as a powerful but simple toolset for growing a business. The methodology of BOBM simplifies and seamlessly integrates best practice tools in business management. With BOBM and especially using its templates, you'll be able to simply design, execute, and monitor a Blue Ocean Strategy as well Blue Ocean-Business Model.
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BLUE OCEAN STRATEGY vs. BLUE OCEAN‐BUSINESS MODEL
Instantly Learn and Apply Best Practice Tools for Exponential Business Growth
Dr. Rod King
Consultant & Trainer on Business Model Analysis, Design, and Innovation
1. WHERE ARE YOU AT THE MOMENT (IN THE INDUSTRY)? ‐ Current Revenue: ……………………….…………………. ‐ Current No. of Direct Competitors: ……………………….………………….
2. WHERE WOULD YOU LIKE TO BE (IN 1/2/3 YEARS)?
‐ Future (Desired) Revenue: ……………………….…………………. ‐ Future No. of Direct Competitors: ……………………….…………………. ‐ Uncontested Customer Experience: ……………………….………………………………….
3. HOW WILL YOU GET TO THE BLUE OCEAN? ‐ Design, Test, and Validate Blue Ocean Strategy ‐ Design, Test, and Validate Blue Ocean‐Business Model ‐ Implement and Monitor Blue Ocean Strategy as well as Blue Ocean‐Business Model
‐ Adapt Blue Ocean Strategy and Blue Ocean‐Business Model, as Necessary
BOBM1.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
BLUE OCEAN VOICE FOR “BLUE OCEAN STRATEGY BOOK” vs. “BLUE OCEAN‐BUSINESS MODEL”
A) QUESTIONS FOR DETERMINING CUSTOMER DELIGHT AND NEEDS No. 1 Date: March 16, 2009
Name of Product/Service/Facility: “Blue Ocean Strategy” book Functionality: To present tools for creating a Blue Ocean Strategy
Customer’s Intent: To develop a Blue Ocean‐Business Model Business/Industry: Publishing/Business Education (Consulting)
Focus of Customer Experience: Product/Service/Facility; Purchase/Delivery/Usage/Supplements/Maintenance/Disposal
A1) What do you like regarding the object (product/service/facility)?
• Compelling storytelling and presentation of cases illustrating use of the Blue Ocean Strategy.
• Metaphor that distinguishes Red and Blue Ocean companies as well as their market spaces.
• Blue Ocean Strategy move as more critical than static historical factors in explaining extraordinary success in business.
• Methodology for Blue Ocean Strategy that integrates tools for strategic marketing, branding, Value Innovation, and strategy execution.
• Focus of Blue Ocean Strategy on non‐customers and reconstruction of existing market boundaries.
A2) What would you need regarding the object (product/service/facility)?
• A Software Application/Manual for systematically using methodology or process for Blue Ocean Strategy.
• A Software Application/Manual for systematically developing Blue Ocean‐Business Models.
• Instructions for systematically developing tactics, action plans, and projects with a view to implementing Blue Ocean Strategy.
• Workflow for translating, executing, and monitoring a Blue Ocean Strategy as in the case of using the Balanced Scorecard.
• Applications/Examples of using the Blue Ocean Strategy in public sector and NGO projects such as in urban planning and social business.
B) QUESTIONS FOR DETERMINING CUSTOMER PAIN AND DISSATISFACTION BOBM2.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
B1) What DON’T you like regarding the object (product/service/facility)?
• The Blue Ocean Strategy book is not easy to fully understand. A Blue Ocean Strategy cannot immediately be developed. No procedure is described for recognizing, selecting, and ‘weighing’ the importance of factors or dimensions on the Strategy Canvas. There is no distinction between factors of customer delight and factors of customer pain. Also, there is no systematic procedure or tactics for eliminating emerging trade‐offs on the Strategy Canvas. Further, the Four Actions Framework (Eliminate‐Reduce‐Raise‐Create) is not linked to a process such as brainstorming for generating and evaluating more specific ideas, initiatives, and targets/success criteria.
• Reading the whole book of 216 pages takes an inordinate amount of time.
• The Blue Ocean Strategy is targeted at the private sector. The framework in the book does not facilitate application of Blue Ocean Strategy to public sector projects. In particular, Blue Ocean Strategy is not presented as a methodology for creative problem solving and innovation.
• The book largely consists of text; very little graphics.
• The Blue Ocean Strategy book is not ubiquitously available.
• The book costs US$27.95 (rather expensive!).
B2) What DON’T you need regarding the object (product/service/facility)?
4 PERSPECTIVES AND QUESTIONS FOR BALANCING A BLUE OCEAN DASHBOARD
1. INVESTOR PERSPECTIVE ‐ HOW WILL THE BUSINESS MAKE MORE MONEY (EXTRAORDINARY PROFIT)?
2. CUSTOMER PERSPECTIVE
‐ HOW WILL CUSTOMERS EXPERIENCE THE GREATEST DELIGHT AND LEAST PAIN?
3. PROCESS PERSPECTIVE ‐ WHAT PROCESSES AND STRATEGIES WILL GENERATE EXTRAORDINARY PROFIT AS WELL AS DELIVER ITS VALUE PROPOSITION TO CUSTOMERS/CONSUMERS?
4. EMPLOYEE PERSPECTIVE ‐ WHAT ATTRIBUTES, SKILLS, COMPETENCES, RESOURCES, AND OUTPUTS SHOULD EMPLOYEES HAVE IN ORDER TO SUSTAIN A WORKFLOW AND CULTURE THAT DELIVER EXTRAORDINARY VALUE TO CUSTOMERS AND INVESTORS?
BOBM5.31. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Evolution of Business Management Concepts and Tools That Explain Extraordinary Growth and Profitability of Businesses
INITIAL IDEA (“SEED”)
BUSINESS MANAGEMENT CONCEPTS, THEORIES, AND TOOLS
TIME
Past Present Future
Elements
System (Product)
Environment (Supersystem)
SPACE
“BLUE OCEAN STRATEGY”
BOBM8.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
“BLUE OCEAN‐BUSINESS MODELS” ?
Concepts, tools, and strategic moves for explaining extra‐ordinary business success as well as executing a Blue Ocean Strategy
“BUILT TO LAST”
“IN SEARCH OF EXCELLENCE”
“BLUE OCEAN‐BUSINESS MODELS”
Highly successful habits or factorsof companies that display extra‐ordinary growth, profitability, and longevity
Visual concepts and tools for mapping, designing, executing, and monitoring the performance of Blue Ocean Strategy as well as Blue Ocean‐Business Models
BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM8.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
1. WHERE ARE YOU AT THE MOMENT (IN THE INDUSTRY)? ‐ Current Revenue: ……………………….…………………. ‐ Current No. of Direct Competitors: ………………………………………….
2. WHERE WOULD YOU LIKE TO BE (IN 1/2/3 YEARS)?
‐ Future (Desired) Revenue: …………………….……………………. ‐ Future No. of Direct Competitors: …………………………………………. ‐ Uncontested Customer Experience: ……………………….………………………………….
3. HOW WILL YOU GET TO THE BLUE OCEAN? ‐ Design, Test, and Validate Blue Ocean Strategy ‐ Design, Test, and Validate Blue Ocean‐Business Model ‐ Implement and Monitor Blue Ocean Strategy as well as Blue Ocean‐Business Model
‐ Adapt Blue Ocean Strategy and Blue Ocean‐Business Model, as Necessary
BOBM1.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
B) QUESTIONS FOR DETERMINING CUSTOMER PAIN AND DISSATISFACTION BOBM2.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
BUSINESS MODEL: (How does the organization work to deliver its value proposition to customers & investos?)
Business Experience Quotient
IDEAL BLUE OCEAN STRATEGY (How to create an uncon‐tested customer experience and uncontested business model as well as make the competition irrelevant?)
Blue Ocean Program
ROI (%):
BOBM5.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Performance Objectives: 20…… IMPACTS: Strengths, Opportunities, Weaknesses, and Threats
Cost: ‐ ($)
Revenue: + ($)
Other Criteria
S: Strengths (+)
O: Opportunities (+)
W: Weaknesses (‐)
T: Threats (‐)
S: Suppliers/Materials
E: Employees/Know‐ledge Assets/Culture
M: Machinery/ Equipment/Facility
P: Processes/ Activities
O: Outputs ‐ Product
‐ Service
R: Retailers/ Distributors/Channels
C: Customers/ Consumers
E: Environment
‐ Competitors
‐ Non‐customers
‐ Partners
‐ Investors
‐ Community/Gov.
BUSINESS MODEL: (How does the organization work to deliver its value proposition to customers & investors?)
Business Experience Quotient ROI (%):
BOBM5.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
4 PERSPECTIVES AND QUESTIONS FOR BALANCING A BLUE OCEAN DASHBOARD
1. INVESTOR PERSPECTIVE ‐ HOW WILL THE BUSINESS MAKE MORE MONEY (EXTRAORDINARY PROFIT)?
2. CUSTOMER PERSPECTIVE
‐ HOW WILL CUSTOMERS EXPERIENCE THE GREATEST DELIGHT AND LEAST PAIN?
3. PROCESS PERSPECTIVE ‐ WHAT PROCESSES AND STRATEGIES WILL GENERATE EXTRAORDINARY PROFIT AS WELL AS DELIVER ITS VALUE PROPOSITION TO CUSTOMERS/CONSUMERS?
4. EMPLOYEE PERSPECTIVE ‐ WHAT ATTRIBUTES, SKILLS, COMPETENCES, RESOURCES, AND OUTPUTS SHOULD EMPLOYEES HAVE IN ORDER TO SUSTAIN A WORKFLOW AND CULTURE THAT DELIVER EXTRAORDINARY VALUE TO CUSTOMERS AND INVESTORS?
BOBM5.31. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
Template for 4 Perspectives and Questions for Balancing a Blue Ocean Dashboard
INVESTOR PERSPECTIVE
• How will the business make more money (extraordinary profit)?
EMPLOYEE PERSPECTIVE
• What attributes, skills, resources, and outputs should employees have in order to sustain a workflow and culture that deliver extraordinary value to customers and investors?
4 PERSPECTIVES AND
QUESTIONS FOR BALANCING A BLUE OCEAN DASHBOARD
CUSTOMER PERSPECTIVE PROCESS PERSPECTIVE
• What processes and strategies will generate extraordinary profit as well as deliver its value proposition to customers/consumers?
• How will customers experience the greatest delight and least pain?
BOBM6.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM8.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.32. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
[Uncontested Customer Experience/ Customer Value Proposition/Business Goal (“BHAG”)/Strategic Intent/Vision/Ideal Solution/Revenue, Cost, Profit, and ROI]:
C: CUSTOMERS/CONSUMERS
R: RETAILERS/DISTRIBUTORS/ CHANNELS/INTERFACE
O: OUTPUTS/PRODUCT/SERVICE
BOBM6.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM8.2. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM5.3. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM6.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com BOBM6.1. Blue Ocean‐Business Models. Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com
TOMCAT (Trade‐Off Matrix of Customer Aspirations And Troubles): How to Quickly Organize and Document Blue Ocean‐Business Models as well as Determine (Non‐)Customer Trade‐offs, Value Propositions, Business Opportunities, Strategies, and Design/Brainstorming Objectives
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.
Consultant & Trainer on Business Model Analysis, Design, and Innovation
3. Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press.
4. King, R. (2009) The Infinitely Zoomable Page: The Ideal Tool for Business Model Thinking, Design, and Innovation. Fresno: Ideal‐Solution Management.