g conderacci blue ocean gbtc
DESCRIPTION
Blue Ocean Strategy Session presented by Greg Conderacci and the GBTCTRANSCRIPT
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Objective: Discovery!
Discover the Blue Ocean Strategy* and how it can help you explore profitable, innovative ideas
Learn some Blue Ocean tools, tips and tricks that might stand you in good stead in tough times
Have fun!
* Based on Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne
Harvard Business School Press (2 million copies sold in 41 languages)
How Bad Can It Get?How Bad Can It Get?
“Turn SCE to Aux”
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What’s “Blue”? Sailing Boldly Into The Unknown
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Innovate in the Face of Challenges
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Blue vs Red Oceans
Red: known market space – demand is fought over
Blue: unknown today – demand is created From something old: Cirque From something new: eBay For example: mutual funds, cell phones,
express package delivery, home videos, biotechnology, discount retailing
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Nothing New
• Pricing: 1908 -- $850; 1909 -- $609; 1924 -- $290 (vs carriages $400)
• Market share: 1908 – 9%; 1921 – 61%• Production time: 4 days (vs industry 21)
Not Just Products
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David Faces Goliath
Then Saul clothed David in his own tunic, putting a bronze helmet on his head and arming him with a coat of mail.
David also girded himself with Saul's sword over the tunic. He walked with difficulty, however, since he had never tried armor before. He said to Saul, "I cannot go in these, because I have never tried them before." So he took them off.
Then, staff in hand, David selected five smooth stones from the wadi and put them in the pocket of his shepherd's bag. With his sling also ready to hand, he approached the Philistine.
--1 Samuel 17:38-40
How “Davids” Win
In battle, “Goliaths” (10x stronger) win 71.5% of the time – when the fighting is “conventional”
When underdogs choose unconventional strategies they win 63.6% of the time – “even when everything we think we know about power says they shouldn’t”
– Ivan Arreguin-Toft, political scientist
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Source: “How David Beats Goliath” by Malcolm Gladwell, The New Yorker 5/11/09; study of wars fought over the last 200 years between strong and weak combatants.
T. E. Lawrence
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Why You Want to Be Blue
Kim and Mauborgne: 108 business launches:
86% of new ventures line extensions = 39% of total profits
14% new industries/markets= 61% of profits
The trap of “military,” competition-focused strategy
It’s the Strategic Move that Matters
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Blue vs Red
RED Compete in existing
space Beat the competition Exploit existing demand Make value/cost trade-
off Differentiation vs low
cost
BLUE Create uncontested
space Make competition
irrelevant Create new demand Break value/cost trade-
off Differentiation AND low
cost
Cornerstone: Value Innovation
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Costs
Buyer Value
ValueInnovation
Exercise: Finding Blue Around You
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“Blue Holes”: Are You Ready for Blue?
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Reduce
Eliminate Create
Raise
New ValueCurve
Into The Wild Blue: The Strategy Canvas
18 Factors of Competition
Three Characteristics of Good Strategy
Focus – Concentrate your investment on a few key factors (e.g., Southwest: friendly service, speed, point to point departures)
Divergence – Differentiate from your industry’s average profile (e.g., Southwest vs other airlines)
Compelling tagline – A clear, simple, truthful message (e.g. – “Cheaper than driving”)
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The Idea Box: A New Car Wash
Method Washed Equipment Products
1 Full Cars Sprays Related
2 Self Trucks Conveyors Novelties
3 Hand Houses Stalls Books
4 Mobile Clothes Dryers Food
5 Combination Dogs Brushes Cigarettes
6 Other Cats Brooms Toys
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Source: Thinkertoys by Michael Michalko
Test: How Do You Know You’re Blue?
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BuyerUtility
Price Cost AdoptionBlue
OceanIdea
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
• How long does it take to find the product?How long does it take to find the product?• Is the purchase place attractive and accessible?Is the purchase place attractive and accessible?• How secure is the transaction environment?How secure is the transaction environment?• How rapidly can the purchase be made?How rapidly can the purchase be made?
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
• How long does it take to get the product?How long does it take to get the product?• How easy to unpack and install?How easy to unpack and install?• Do buyers have to arrange delivery themselves?Do buyers have to arrange delivery themselves?• How costly and difficult is this? How costly and difficult is this?
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
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ntenan
ce
• Does the product require training or assistance?Does the product require training or assistance?• Is it easy to store when not in use?Is it easy to store when not in use?• How effective are the features and functions?How effective are the features and functions?• Does it deliver more power or options than needed?Does it deliver more power or options than needed?• Is it overcharged with bells and whistles?Is it overcharged with bells and whistles?
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
• Does it need other products to make it work?Does it need other products to make it work?• How costly are they?How costly are they?• How much time do they take?How much time do they take?• How much pain do they cause?How much pain do they cause?• How easy are they to obtain? How easy are they to obtain?
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
• Does the product require external maintenance?Does the product require external maintenance?• How easy is it to maintain and upgrade?How easy is it to maintain and upgrade?• How costly is the maintenance?How costly is the maintenance?
The Buyer Experience Cycle
Purchase Delivery Use
Supplements
Disposal
Mai
ntenan
ce
• Does the use of the product create waste?Does the use of the product create waste?• How easy is it to dispose of product/waste?How easy is it to dispose of product/waste?• Are their legal or environmental issues?Are their legal or environmental issues?• How costly is disposal? How costly is disposal?
What Stands in the Way of True Blue?:
Hurdles to Strategy Execution
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CognitiveWedded to
the status quo
LimitedResources
PoliticalOpposition from vested
interests
Unmotivated Staff
Fair Process Impacts Behavior
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Fair ProcessEngagementExplanationExpectation
ExceedsExpectations
Self-initiated
Trust/Commitment
“My opinion counts”
Voluntary Cooperation“I’ll go beyond
the call of duty”
AttitudesAttitudes
StrategyStrategyFormulationFormulation
ProcessProcess
BehaviorBehavior
StrategyStrategyExecutionExecution
Tipping Point Leadership
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Mass of EmployeesMass of Employees
ExtremesExtremes ExtremesExtremes
