Presentation on theme: "Blue Ocean Strategy Chapter 4: Focus On The Big Picture, Not The Numbers Group 1 Tara Ferguson Jt Lehotsky Taylor Skidmore Sunny To."— Presentation transcript:
1Blue Ocean Strategy Chapter 4: Focus On The Big Picture, Not The Numbers Group 1Tara FergusonJt LehotskyTaylor SkidmoreSunny To
2Next Question After knowing the paths to creating blue oceans “How do you align your strategic planning process to focus on the big picture and apply these ideas in drawing your company’s strategy canvas to arrive at a blue ocean strategy?”Most companies’ strategic planning process back to red ocean = compete within existing market space
3Why so serious? Typical strategic plan. Current industry conditions & competitive situationsHow to increase market share, capture new segments, cut loss goals & initiativesAttached budget, graphes, ect…Data provided by people various parts of organization w/ conflicting agendas & poor communicationManagers do what?Result: Oh so… not good! – managers paralyzed, employees no ideaCloser look no plan? Tactics w/ no direction
4Focus on the Big Picture, Not the Numbers!!! Drawing a strategy canvas, build strategic planning process around it:Visualize a company’s current strategic positionChart future strategyManagers and employees focus on the big picture > numbers and jargon and detailsHow?Shows the strategic profile of an industry by depicting very clearly the factors that affect competition among industry playersShows the strategic profile of current and potential competitors, indentifying which factors they invest in strategicallyShows the company’s strategic profile (value curve): how it invests in the factors of competition and how it might invest (w/ all 3 qualities: focus, divergence, and a compelling tagline)
5Drawing strategy Canvas Assessing to what extent your company and its competitors offer the various competitive factors = challengingw/in own responsibilty = okThe whole industry = hardEx: catering manager of an airline & refreshment vs. customers & the complete offeringEx: CIO & the company’s IT infrastructure for its data- mining capacity vs. customers & speed, ease of useDrawing strategy canvas is awfully hard
6So what to do?Last ten years, a structured process for drawing and discussing a strategy canvas blue ocean150-year-old financial services group- European Financial Services adopted this process to develop a strategy that breaks away from the competition 30% revenue boost in its initial yearProcess builds on the 6 paths of creating blue oceans & has a lot of visual stimulation to unlock people’s creativity = 4 major steps
8Step 1: Visual Awakening Common mistakesDiscussing changes in strategy before resolving differences of opinion about the current state of playReluctance to the need of changeThen how do you get around to making changes?
9European Financial Services Poorly communicated strategyDeeply divided among regional subsidiaries and corporate executivesAsked to chart their company’s strategy – but found that they must first reach a common understanding of their current position20 + senior managersTeam 1 – Produce a value curve for EFS’s current strategic profile in traditional corporate foreign exchange business relative to competitorsTeam 2 – Produce the same but for EFS’s emerging online foreign exchange business
10What constituted a competitive factor and what are those factors? Both teams dealt with heated debated because of different opinionsEuropeans – EFS had to offer consulting services on risk managementAmericans – Stressed the value of speed and ease of useOther – Customers would be drawn in by the promise of instant confirmation of their transactionsPresented their work – Revealed defectsLack of focusInvesting in diverse and numerous factors in both businessesBoth were very similar to competitorsNeither team could create a tagline to match their value curveContradictions
13“How Google Grows..and Grows..and Grows” by Keith Hammonds 2007 “Instead, we went into the ranks and talked with the project managers and engineers who make Google tick. Here's what we learned...”Rule 1: The User is in Charge“Google tracks the outcome of a huge sample of the queries that we throw at it. What percentage of users click on the first result that Google delivers? How many users click on something from the first page?If you can do something that will improve the user's experience, do it…. It obsesses over search-traffic figures, and it reads its .In fact, 10 full-time employees do nothing but read s from users, distributing them to the appropriate colleagues or responding to them themselves.”“How Google Grows..and Grows..and Grows” by Keith Hammonds 2007
14Step 2: Visual Exploration Go into the field to explore the 6 paths to creating blue oceansLook across alternative industriesLook across strategic groups within industriesLook across the chain of buyersLook across complementary product and service offeringsLook across functional or emotional appeal to buyersLook across timeSee what managers must make sense of – How people use or don’t use their products or services
15Never outsource your eyes! Talk to and watch Customers, Noncustomers, UsersLook at how they might find alternative ways of fulfilling the need that your product/service satisfiesEx: Driving vs. flyingGoogle vs. local library or newspaperGoogle vs. Yellow pages
16EFS mangers in the field for 4 weeks Observe 10 people in corporate foreign exchangeLost customersNew customersCustomers of EFS’s competitors and alternativesCompanies who did not yet use corporate foreign exchange servicesEnd users of corporate and foreign exchange services – the accounting and treasury departmentsAncillary products and services also used – pricing simulations
17Results Sent back to the drawing boards Each team had to create 6 value curves using the 6 path frameworkEach had to depict a strategy that would make EFS stand out in its market and a taglineHopes to push the managers to break the boundaries of conventional thinking
18Step 3: Visual Strategy Fair Draw your “to be” strategy canvas based on insights from field observations.The EFS teams presented their strategy canvases at the visual strategy fair to senior executives and external constituencies.Get feedback on alternative strategy canvases from customers, competitors’ customers, and noncustomers.
19Step 3: ContinuedEFS realized that one-third of what they had thought were key competitive factors were marginal to customers.Used feedback to build the best “to be” future strategy.EFS was able to draw a value curve that was truer to the existing strategic profile.
21Eliminate-Reduce-Raise-Create The Case of EFSEliminateRelationship managementRaiseEase of useSecurityAccuracySpeedMarket commentaryReduceAccount executivesCorporate dealersCreateConfirmationTracking
22Step 4: Visual Communication Distribute your before and after strategic profiles to all employees for easy comparison.Support only those projects and operational moves that allow your company to close the gaps to actualize the new strategy.
24Using the Strategy Canvas Blue Ocean companies have to communicate and not just worry about the numbers
25Samsung Electronics Value Innovation Program (VIP) At the conference projects are shared through presentations and exhibitions and awards are given to the best.World’s leading 40” LCD TV in 2002SGH T-100 worlds bestselling mobile phone
27Pioneer- the businesses that offer unprecedented value. (RSS Feed) Settlers- businesses whose value curves conform to the basic shape of the industry’s. (Google Images)Migrators- lie somewhere in between Pioneers and Settlers. (Google Maps)
28Strategic planning should be more about collective wisdom building than top-down or bottom-up planning.It should be more conversational than solely documentation driven.