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The Blue Ocean Strategy

A Case Study Analysis of 14 agencies in Malaysia

Outline:

Introduction

Objectives of study

Literature Review

Six Principals of BOS

Framework and Tools of


BOS

Methodology

Data Collection

Findings

Conclusion

Critical Review

WHAT IS BLUE OCEAN


STRATEGY?
8 KEY POINTS OF BLUE
OCEAN STRATEGY

Introduction:
Introduced

in
2004 by W.C. Kim
& R Mauborgne

Operationalizatio

n and
implementation
yet to be
synchronized
Research

Target

OBJECTIVES OF STUDY

Gathered
information from
companies that
implemented BOS

Importance of
Kims book in
explanation of BOS
principles

Analysi
s

Effectivene
ss

LITERATURE REVIEW
Strategic
Models:

Ultimate aim of
most strategic
Models: To make
the company better
than competitors

Most common
variables: External
& Internal

Examples: SWOT,

Strengths
Weaknesses
Opportunitie
s
Threats

Financial
Strength
Competitive
Advantage
Industry
Environment

LITERATURE REVIEW
Portfolio
Models:

Various portfolios can


be viewed in one chart
and strategies would
depend on portfolios in
their respective
quadrants

Just one external and


one internal factor are
chosen e.g. BCG

LITERATURE REVIEW
Other Models:

Models based on
different levels of
strategic decisions e.g.
corporate, business,
operative levels

Porters Models, Breakeven chart, Product life


cycle and experience
curve

LITERATURE REVIEW

In BOS, first time a


model was
introduced without
pairing of any
external and internal
variables i.e.
Strategy Canvas

Always a comparison
between companys
actual and expected
scores against other
players

SIX PRINCIPLES OF
BOS

BOS FRAMEWORK &


TOOLS

Strategy Canvas

Value Innovations
analysis

Eliminate-ReduceRaise-Create Grid

Six Paths
Framework

Four steps visual


strategies

3 Tier of noncustomers

BOS sequences

METHODOLOGY

Exploratory and Case


Study approach

Group A: Six companies


participated who were
already applying BOS
principles

Group B: 20 companies
agreed to participate in
discussion in workshop

Detail analysis of 14
companies only

DATA COLLECTION
Data Gathered
Only utility
principles were
analysed:

Utilities that are


eliminated

Reduced

Raised

Created

Data Analysis

Domain Analysis
methodology

Eliminate and
Reduce utilities &
the Raise and
Create
components were
grouped together to
get a bigger mass

FINDINGS
ELIMINATE

REDUCE

RAISE

CREATE

60 Programmes

9 Operating
costs

8 Quality

4 Customer
satisfaction

6 Product variations 10 Tangibles

12
Improving
customer
service

10 New
activities

3 Costly activities

9
Overheads
and indirect

12 More
customer
satisfaction

5 Closer to
customer

3 Internal processes

3 Processes

4 New
activities

6
Governance

4 Operational
activities

3 Reduce
time taken

10 Long
duration
effect
5
Investments

FINDINGS
Eliminate &
Reduce Grid
Chart

Customer satisfaction
scores

Cost component was


main focus

Utilities that were not


giving good returns

Low score in Internal


processes

Time consuming
activities

Raise & Create


MainGrid
component:
Chart

Utilities providing new


products & services to
the customers

Utilities with Long


duration effect

High quality utilities

FINDINGS
RAISE

ELIMINATE
Meals, Seating class
choices, Printed Tickets,
Lounges, Need to see a
travel agent

Affordability,
Accessibility

Air Asia
Company

REDUCE

CREATE

Perception of air
travel, Excess
conveniences, Cost
of air travel

Cheap air travel,


Ticketless travel,
Online booking,
Family travelling

CONCLUSION
All the companies had
completely understood and
implemented BOS principles

BUT
nobody has got any
recognised BOS certified
recognition

THEREFORE
Their level of
understanding needs to
be verified

CRITICAL REVIEW

During Discussion in
workshop there were
differences in the
understandings of
principles of BOS.

Time Consuming
data collection
method: Action
Research

Each company is
uniquely different
and need to be
approached
differently

References:

Allen,M.,(1979), Diagramming GEs Planning for Whats


WATT in book edited by Allio et al, Corporate Planning:
Techniques and Applications, AMACOM New York

Drucker P, (1992), Managing the Non Profit Organisation,


Harper Business

Mintzberg,H et al, (2003), The Strategy Process, Pearson.

Porter, M.E. (2008) The five competitive forces that


shape strategy, Harvard Business Review.