INTRODUCTION

TO ROUND BLUE-3
BREAKING AWAY FROM THE
COMPETITION AGAIN
 YOUR BLUE OCEAN IS TURNING RED

n Round Blue-3 starts in Year 47 and is 3 year long

n Your offering is beginning to be imitated by new entrants to your Blue Ocean

n Your competitors will experience the same adoption curve for their products:
n Their initial sales are likely to be low but will be increasing over time

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 BREAKING AWAY FROM THE COMPETITION AGAIN

n The Executive team goes back to the field to explore the 6 Paths to see how
they could extend their strategic profile

n This time, they are concentrating on Service and Delivery

n The focus was on the product during Rounds Blue-1 and Blue-2
n Mike and his team believe that further demand could be created by investigating
Delivery and/or Service

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 MORE BACKGROUND ON SERVICES CURRENTLY
OFFERED BY BLUE BUDDIES AND ITS COMPETITORS
n Warranty Offer
n Warranties of 1 to 2 years are standard in the industry

n Extended Warranty & Manufacturer's Insurance Offer

n Customers may purchase an extended warranty and/or an accidental damage
insurance

n Loyalty Card and Rewards

n Manufacturers have a loyalty card system; quite expensive and complex to
administer

n Ease of Repair
n Faulty equipment are usually returned to the manufacturer
n Consoles are normally repaired in 3 to 6 weeks, sometimes longer
n A repair fee may be charged

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 MORE BACKGROUND ON DELIVERY CURRENTLY
OFFERED BY BLUE BUDDIES AND ITS COMPETITORS
n All competitors distribute through the same distributors.
n No flagship stores and no direct supply on internet (resistance from distributors)

n Informed Salespersons
n Manufacturers play an active role in training salespeople, but not every distributor
does a good job of educating their salespeople
n Demonstration consoles are seldom used and poorly maintained

n Deals and Price Promotions

n Agreement between distributors and manufacturers to offer special deals
n Main mechanisms for moving products

n Number and Complexity of Bundles

n A combination of a console, controllers, games and accessories
n Manufacturers offer different bundles to serve the needs of different sub-segments

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SERVICE AND DELIVERY MINI CASES
Many successful Blue Ocean strategies have been created
by investigating Delivery and/or Service
 DELL COMPUTERS

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 THE ERRC GRID FOR DELL COMPUTER

Eliminate Raise
Sales intermediaries Vendor integration
Customer services
COSTS

VALUE
Reduce Create
R&D Mass PC customization
Product range Factory direct delivery
Factory inventory

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 BUYER UTILITY MAP FOR PC INDUSTRY

Other hardware
manufacturers Dell
Dell
VIRGIN ATLANTIC

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 THE ERRC GRID FOR VIRGIN ATLANTIC

Eliminate Raise
First class category Business class comfort
(longer, wider seats)
Capital asset
management In-flight and clubhouse
COSTS

services

VALUE
Reduce Create
Number of routes Ground transportation
Traditional TV services
advertising
 NTT DOCOMO I-MODE

1-touch
i-mode
access

1-touch
email
access

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 THE ERRC GRID FOR I-MODE

Eliminate Raise
Complex WAP Ease of mobile email
technology
Popular games and
news content
COSTS

VALUE
Reduce Create
Voice-based technology Easy one-billing services
Extraneous internet e-wallet services
functionality
Handset features
 BUYER UTILITY MAP FOR
MOBILE COMMUNICATIONS INDUSTRY

Other cell phone

makers/operators

NTT
DoCoMo
NTT DoCoMo i-mode
i-mode
YOUR ROLE OVER THE NEXT YEARS
 YOUR ROLE IS TO ASSIST THE EXECUTIVE TEAM TO
EXTEND YOUR BLUE OCEAN OFFERING
n Read and debate the 2nd Visual Exploration conducted by the Executive Team

n Extend your Strategy Canvas along Service and/or Delivery dimensions

n Decide on how to allocate your total budget across:

n Your Red Ocean product
n Your Blue Ocean offering
n Any Corporate Projects you decide may be vital in making your new
Service/Delivery strategy succeed

n Make decisions to market Blue Box for three more years

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 SECOND VISUAL EXPLORATION

n Read the conversation that took place when the Executive Team met
after having conducted the second Visual Exploration
n Take sufficient time to debate and understand what the Visual
Exploration is telling you in terms of how you can create further demand
by investigating Service and Delivery

n Two Paths offer the most insight on how you can break away from the
competition again and extend your strategic profile.
n Path 4: Looking Across Complementary Product and Service Offerings
which yielded new insights regarding Services
n Path 5: Looking Across the Functional and Emotional Appeal for Buyers
which yielded new insights regarding Delivery.
n The Executive Team has done the estimation below regarding noncustomer ages

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 A LIST OF POTENTIAL SERVICE AND DELIVERY COMPETING
FACTORS IS OFFERED FROM WHICH YOU CAN CHOOSE

SERVICE DELIVERY
Ability to Swap Games Ability to buy from a catalogue
Ability to Trade-in Console Deals and Price Promotions
After Sales Help and Advice Dedicated Stores
Ease of Repair Direct Sales on the Internet
Extended Warranty Distribution Matching my Lifestyle
Loyalty Card and Rewards Easy Guide to Online Services
Manufacturer's Insurance Offer Entertainment Assistant
Speed of Providing Patches Friendly Salespersons
Warranty Offer Gaming Cafes
Informed Salespersons
Local Sales and Service
Number and Complexity of Bundles
Trial and Return

Existing competing factors (Eliminate, Reduce, Raise)

Potential new value factors (Create)
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 STEP 1 – SERVICE / DELIVERY ERRC GRID

n Use the Strategy Canvas wizard to extend your Strategy Canvas

n It will only show the Service (S) and Delivery (D) competing factors

n You can no longer upgrade your Blue Ocean offering along Product factors

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 STEP 2 – DRAWING THE SERVICE / DELIVERY STRATEGY
CANVAS

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 MAKING DECISIONS

n Once you have decided how to extend your offering with Service and/or
Delivery factors, you will have to make the same decisions as during Rounds
Blue-1 and Blue-2.

n Each of these decisions is explained in details in Introduction to Round Blue-1

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 FOUR NEW CORPORATE PROJECTS
ARE AVAILABLE IN ROUND BLUE-3
n Radically upgrading Leadership and Service in the Customer Contact Centre
n Project aimed at creating a dramatic change in Contact Centre performance
through attending to both the processes, the motivation of the staff and the quality
of leadership – all of which, when improved, are mutually reinforcing.
n Full impact expected to be achieved within two Rounds.
n Project considered vital for the execution of the Blue Ocean Service Strategy.

n Hiring Expert Trainers to Train Distributors’ Salespeople

n Blue Buddies’ trainers to train Distributor employees on the shop floor so that they
are able to answer in depth questions about the concerns and worries of potential
customers, especially those who would normally not be shopping for a game
console.
n Full impact expected to be achieved within two Rounds.
n Project considered vital for the execution of the Blue Ocean Delivery Strategy.

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 FOUR NEW CORPORATE PROJECTS ARE AVAILABLE IN
ROUND BLUE-3 (CONT’D)
n Hiring the Top Team from a Regional Specialist Luxury Goods Retailer
n Blue Buddies does not have the expertise within the organization to create their
own specialist stores.
n This project involves searching for and attracting a team who know each other well
and who have been successful in creating high traffic through specialist stores.
n Full impact expected to be achieved within two Rounds.
n Project considered vital for the development of dedicated stores.

n Hiring a Team Experienced in Developing and Managing a Fast Food Franchise

n Blue Buddies does not have the expertise within the organization to create Gaming
Cafes
n This project involves searching for and attracting a team who know each other well
and who have been successful in developing and managing a fast food franchise.
n Full impact expected to be achieved within two Rounds.
n Project considered vital for the development of Gaming Cafes.

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