Blue Ocean Group12

8/8/2019 Blue Ocean Group12

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BLUE OCEAN STRATEGY


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8-bit Era90% -1989

Sega-13 million

Nintendo-69 million

1985-1989


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8-bit Era90% -1989

64% -199216-bit Era

Sega super genisis-40 million

Nintendo-49 million

1985-1989

1989-1992


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8-bit Era90% -1989

64% -1992

37% -1997

16-bit Era

32-bit Era

Play station-102.49 million

Sega Dreamcoit-9.5 million

Nintendo-32.93 million

1993-2001

1985-1989

1989-1992


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8-bit Era90% -1989

64% -1992

37% -1997

17% -2005

16-bit Era

32-bit Era

128-bit Era

90% -1989

64% -1992

37% -1997 1993-2001

1985-1989

1989-1992

2001-2005

Play station-56%

Microsoft Xbox-27%

Nintendo-17%


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8-bit Era90% -1989

64% -1992

37% -1997

17% -2005

16-bit Era

32-bit Era

128-bit Era

90% -1989

64% -1992

37% -1997 1993-2001

1985-1989

1989-1992

2001-2005

Xbox360- ? Play station-? Nintendo-?


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Age- 16-24

Sophisticated gamerSpends more than 1-2 hours per day

Looking for hard core graphics


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More features

leading to

complex joysticks

Higher graphic

performance

Target group

restrictedto16-24

Increased cost

Higher entry

barriers


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No market growthFewernew

games

Less game time

More editions of

existing games

oung ustomer

started areer

Exitfrom the

market

Other market Trends


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Decidedto caterto 24 age group

Nintendos Strategy

simple

More

engaging

wireless

Motion sensitive controller

Low power chip


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Competitionloosing money onthe sale ofconsoles

Wii profitfrom the word go


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Age group 16-

24,sophisticated

gamer

Sony Microsoft

RED OCEAN

STRATEGY

Competing in existing market space

Fighting for more market share

Reduced profit and growth


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Sony Microsoft Nintendo

Age group 16-

24,sophisticated

gamer

Age group 24

Blue cean strategy

Creating new market space andmaking competitionirrelevant


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BUYER VALUE

COSTS

VALUE INNOVATION


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Eliminate

(skill sets

required)

Raise

(Ease of use)

Reduce

(Graphic

capabilities)

Create

(Gamer

engagement)

A new

value

curve


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0

5

10

15

20

25

30

35

40

price graphic capability features ease ofuse engagment motion sensitivecontroller

xbox

sony

Strategy Canvas

RaiseReduce CreateEliminate

Four framework model


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0

5

10

15

20

25

30

35

40

price graphic capability features ease ofuse engagment motion sensitivecontroller

xbox

sony

nintendo

RaiseReduce CreateEliminate

Four framework model


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Step1-Reconstruct Market Boundaries


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Commercial Airlines

Private JetCorporate travel

Low

HighAdvantages:

High speed, Ver

eas totravel

Disadvantages:

High Price, High

aintenance

Advantages:

Low price, No

maintenance

Disadvantages:

Less speed of

travel, Noflexibility

Private

Jets

Commercial

Airlines


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Strategy used by NetJet

Joint ownership

Assured flight time

Reduction in average flight time

Flexibility in route


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Disadvantages:High

Price, High Maintenance

Advantages: High

speed, ery easy to

travel

Advantages: Lowprice, No maintenance

Disadvantages: Less

speedoftravel, No

flexibility

Private

Jets

CommercialAirlines

New market

space

Jointownership

Assuredflighttime

Reductionin average flighttime

Flexibility in route

Combining

features of

alternatemarkets

Strategy used by NetJet


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Low

High

Commercial Airlines

NetJet's alue Curve

Private Jet Corporatetravel


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Market

first

tier

Second

tier

Step 2-Reach BeyondExisting DemandThree tiers ofnon customers

Thirdtier

Firsttier-Soontobenoncustomers

Secondtier-Refusingnoncustomer

Third Tier-Unexplorednoncustomer


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BUYER UTILITY

PRICE

COST

ADOPTION

COMMERCIALLY

IABLE BOI

YES

YES

YES

YES

Step 3-Getting the strategic sequence

right


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BUYER UTILITY

PRICE

COST

ADOPTION

COMMERCIALLY

IABLE BOI

YES

YES

YES

YES

Exceptional Utility

MaintenanceUse

Purchase Delivery


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PRICE

COST

ADOPTION

COMMERCIALLY

IABLE BOI

YES

YES

YES

YES

Same

form

Same

Function

Different

form

Same

Objective

Different

Form and

function

BUYER UTILITY


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PRICE

COST

ADOPTION

COMMERCIALLY

IABLE BOI

YES

YES

YES

YES

Pricing innovation

partneringCost

innovation

Strategic

price

Target cost

Target profit

BUYER UTILITY


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PRICE

COST

ADOPTION

COMMERCIALLY

IABLE BOI

YES

YES

YES

YES

BUYER UTILITY

Employees

Business partners

General public


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COGNITIVE

HURDLE

RESOURCE

HURDLE

MOTIVATIONAL

HURDLE

POLITICAL

HURDLE

Blue ocean strategy represents a significant departure fromStatus quo so organizational resistance to change is high

Step4-Overcoming organizational hurdles


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Howtoovercome these hurdles using Tipping

pointleadership

COGNITIVE

HURDLE

RESOURCE

HURDLE

MOTIVATIONAL

HURDLE

POLITICAL

HURDLE

Conventional method

Tipping point principle


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pointleadership

COGNITIVE

HURDLE

RESOURCE

HURDLE

MOTIVATIONAL

HURDLE

POLITICAL

HURDLE

Conventional method


resource

Resource allocation

Cold spot Hot spot


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pointleadership

COGNITIVE

HURDLE

RESOURCE

HURDLE

MOTIVATIONAL

HURDLE

POLITICAL

HURDLE

Conventional method



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pointleadership

COGNITIVE

HURDLE

RESOURCE

HURDLE

MOTIVATIONAL

HURDLE

POLITICAL

HURDLE

Conventional method


Nodifferentiation

Angels Devils


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39% 61%

38%62%

14%86%

PROFIT IMPACT

REVENUE IMPACT

BUSINESS LAUNCH

Launches within red ocean launches for creating blue oceans


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Questions???

Blue Ocean Group12

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