The Blue Ocean StrategyA 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

Operationalization and implementation yet to be synchronized

Research Target Groups

OBJECTIVES OF STUDY

Effectiveness

Analysis

Experiences

Gathered information from companies that implemented BOS

Importance of Kim’s book in explanation of BOS principles

LITERATURE REVIEW

Strategic Models: Ultimate aim of

most strategic Models: To make the company better than competitors

Most common variables: External & Internal

Examples: SWOT, SPACE

• Strengths• Weaknesses• Opportunities• Threats

• Financial Strength

• Competitive Advantage

• Industry• Environment

LITERATURE REVIEWPortfolio 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

Porter’s Models, Break-even 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 company’s actual and expected scores against other players

SIX PRINCIPLES OF BOS

BOS FRAMEWORK & TOOLS

Strategy Canvas Value Innovations

analysis Eliminate-Reduce-

Raise-Create Grid Six Paths

Framework Four steps visual

strategies 3 Tier of non-

customers BOS sequences Blue Ocean Idea

Index

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

1 60 Programmes 9 Operating costs 8 Quality 4 Customer

satisfaction

2 6 Product variations 10 Tangibles

12 Improving customer service

10 New activities

3 3 Costly activities9

Overheads and indirect

12 More customer

satisfaction

5 Closer to customer

4 3 Internal processes 3 Processes 4 New activities

6 Governance

5 4 Operational activities

3 Reduce time taken

10 Long duration

effect

6 5 Investments

FINDINGSEliminate & Reduce Grid

Chart

Cost component was main focus

Utilities that were not giving good returns

Low score in Internal processes

Time consuming activities

Raise & Create Grid Chart

Main component: Customer satisfaction scores

Utilities providing new products & services to the customers

Utilities with Long duration effect

High quality utilities

FINDINGS

ELIMINATE

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

travel agent

RAISE

Affordability, Accessibility

REDUCE

Perception of air travel, Excess

conveniences, Cost of air travel

CREATE

Cheap air travel, Ticketless travel, Online booking, Family travelling

Air Asia Company

CONCLUSION

All the companies had completely understood and implemented BOS principles

BUTnobody 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 GE’s Planning for What’s

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.