Blue Ocean Shift - Summary By Db k5t1p

Summary by: Dedy Budiman M.Pd www.dedybudiman.com | Jan 2018

Blue Ocean Shift adalah proses sistematis untuk memindahkan organisasi Anda dari pasar ramai dengan persaingan ketat yang ibarat samudera merah penuh hiu ke samudera biru yang terbuka lebar, atau pasar baru yang tanpa persaingan.

Blue Ocean Shift is a five-step process that allows any organization to make the transition from an existing, crowded market into a clear new market space.

There are three overall components to a successful Blue Ocean Shift

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Adopting a blue ocean perspective:

Having practical tools that guide the process:

Embracing the concept of humanness:

Looking to the far horizon, recognizing that different questions have to be asked, and pondering what could be

These will translate a blue ocean perspective into a whole new offering

Inspire people and build their confidence, so that they drive the process forward and can successfully implement the shift to a blue ocean.

Based on the three components above, we will look at three key notions that underpin a successful Blue Ocean Shift

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Understanding the concept of market creation

Developing a Blue Ocean mindset

Developing “Humanness.”

Sebelum melakukan pergeseran samudera biru, bagaimana memindahkan organisasi dari bersaing di pasar menjadi menciptakan pasar, pertama-tama Anda harus memahami Strategi Penciptaan Pasar (Market Creating Strategy) dan bagaimana cara kerjanya.

DISRUPTION IS A POWERFUL WAY TO CREATE GROWTH. BUT THINKING ONLY ABOUT DISRUPTION LEAVES A LOT OF OPPORTUNITIES OFF THE TABLE.

Nondisruptive creation is where one’s gain doesn’t have to come at the expense of others. Nondisruptive creation generate growth and employment without necessarily replacing existing businesses or industries

Market-creating strategies take one of three forms: A breakthrough answer to an existing problem which usually takes the form of disruptive creation. For example, boats and airplanes allowed for a new marketplace of transportation that did not exist beforehand. Identifying an entirely new opportunity or solving a new problem a wholly non- disruptive form of growth and creation. For example, Cirque Du Soleil created a new form of circus for both adults and children; they extended the market for circus goers. Redefining the problem and offering a new solution which has elements of both disruptive and non-disruptive market creation. For example the smartphone disrupted less sophisticated cellular phones, but also expanded the market by enabling new mobile experiences.

Model Pertumbuhan Market Creating Strategy GROWTH NONDISRUPTIVE CREATION DISRUPTIVE CREATION

A breakthrough answer to an existing problem

Identifying an entirely new opportunity or solving a new problem

Redefining the problem and offering a new solution

Tiga Cara Melakukan Market Creating Strategy

• It is important to understand that a Blue Ocean Shift does not merely mean “Innovation.” • A blue ocean is created when a new value-cost frontier is opened, and a Blue Ocean Shift occurs when an organization successfully “shifts” into the newly created frontier.

Para Inovator teknologi boleh jadi menelurkan ciptaan menakjubkan, namun mereka jarang menjadi yang menetaskannya. Yang menciptakan Personal Computer adalah MITS, tetapi yang mendominasi (menetaskannya) adalah Apple dan IBM.

Pusatkan Perhatian ke Inovasi Nilai, Bukan Inovasi Teknologi

THE BLUE OCEAN MINDSET

Seeing new opportunities instead of nothing but competitive red oceans requires adopting a different mindset, one based on four fundamental principles. • Do not take the conditions and boundaries in your industry as a given: instead, think in of changing those boundaries to work in your favor. Unleash your imagination. • Make the competition irrelevant: do not focus on gaining an advantage over the competition; that is backward looking and keeps you focused on what the organization has achieved to date. Instead, unleash your forward-looking creativity. • Rather than fighting over existing customers, focus on how to create and capture new ones: in most industries, existing customers are just a tiny sliver of the world of non- customers waiting out there. Create new demand by finding these noncustomers. • Go beyond the value-cost trade-off: instead of choosing between differentiation and low cost, actively pursue both at the same time.

FROM LIMITATIONS

TO NEW OPPORTUNITIES

Humanness • Adopting a blue ocean mindset also includes embracing the concept of “humanness.” • Building this concept into the process of a blue ocean shift inspires your people, gives them confidence, and allows them to drive the process of change.

Humanness brings out people’s emotional engagement so that they have the confidence to act. Once they have that confidence, they can then start to use the tools and processes that will unleash a blue ocean shift

There are three elements to the blue ocean process that build the attitude of humanness.

Atomization

Firsthand Discovery

Fair Process

Atomization

The whole process of a blue ocean shift is daunting to contemplate. Instead, break the challenge into small, concrete steps that can be easily grasped, acted on, and ‘won.’

Firsthand Discovery

• When people are told that change must happen, they do not commit to the process and will be resistant and even resentful. Instead, create the conditions that allow people to make discoveries for themselves. • Not only will this prevent people from feeling manipulated, the very act of discovery helps people to develop a more open and forward-looking mindset. They will see things they had never thought of before.

Fair Process • This requires three fundamentals: • Engagement, so that people are actively involved in driving the process • Explanation, so that people are reassured that they understand the thinking behind each stage • Clear expectations, so that no-one is surprised. • This contributes to an atmosphere of trust, helping to ensure everyone’s voluntary cooperation.

The Five Steps of a Blue Ocean Shift

Step One: Get Started

• Traditional organizational assessments focus on market share and industry attractiveness; but, market share is a lagging indicator that shows where the industry has been, and attractiveness only gives a snapshot of where the industry stands right now. • Instead, the first step should be based around the concepts of value and innovation.

To see how vulnerable or healthy your portfolio really is, use the concepts of Pioneer, Settler, and Migrator to assess how much value the product or service offers.

Pioneer Value Innovation

Migrator Value Improvement

Settler Value Imitation

• Pioneers: products that break away from the competition. Pioneers are value innovations, the key to renewing the portfolio and opening up new frontiers. • Settlers: the other end of the spectrum, Settlers offer only value imitation, converging with the rest of the industry and offering little prospect of growth. • Migrators: somewhere between the two, migrators offer some improvement over the competition, but they do not represent innovative value.

To plot the PioneerSettler-Migrator map, first identify your key businesses, products or services. Choose the heads of each of your organization’s main units to participate and have each manager identify where the products fall on the map

• Working as a group both ensures a sense of fair process and gives everyone a perspective on what others in the company are thinking • The “whole group” includes all decision makers

To define the scope of your Blue Ocean Shift, look for a business, product or offering that has most or all of the following characteristics: • A settler or low migrator • Is headed by a manager who is eager to break into a blue ocean • Has no other major initiatives underway • Clearly has very limited options for growth.

BLUE OCEAN SHIFT: Exercise Template

The Pioneer-Migrator-Settler Map

Pioneer Value Innovation

Migrator Value Improvement

Settler Value Imitation

Key for plotting: Large revenues © Chan Kim & Renée Mauborgne. Blue Ocean Shift. All Rights Reserved.

Small revenues

BLUE OCEAN SHIFT: Exercise Template

The Pioneer-Migrator-Settler Map Current Portfolio

Pioneer Value Innovation

Migrator Value Improvement

Settler Value Imitation

© Chan Kim & Renée Mauborgne. Blue Ocean Shift. All Rights Reserved.

Planned Portfolio

Step Two: Understand Where You Are Now

• The next step is to build a clear, shared picture of the current strategic landscape by creating a Strategy Canvas. This not only helps to build your strategy, it also makes sure that everyone is working from the same overall picture. • The Strategy Canvas is a one-page visual that tells a story in the form of a graph.

The horizontal axis shows the key factors that the industry competes on, while the vertical shows the offering level that buyers receive or experience for each of these factors.

• The blue ocean team first identifies between five and twelve key competing factors for the “As-Is” Strategy Canvas. • Factors can relate to an offering’s product, service, or delivery platforms, but all should describe a key aspect of the offering from the buyer’s point of view. • For example, a charity’s list of factors for the fund-raising industry might include pity pleas, soliciting grants, year-round events, recognition of donors, and so on.

BLUE OCEAN SHIFT: Exercise Template

As-Is Strategy Canvas

Offering Level

High

Low

Price

Key Competing Factors

© Chan Kim & Renée Mauborgne. Blue Ocean Shift. All Rights Reserved.

• Once the team has decided on the key factors list, pick a best player against which to plot the offering as a reference; either the industry leader or your strongest competitor. • Then, using a five-point scale from very low to average to very high, have the team rate the offering level of each factor for your product and then for the reference company.

BLUE OCEAN SHIFT: Exercise Template

Key Competing Factors

Key Competing Factors

Your Company’s Offering Level

Your Competitor’s Offering Level

List the key factors the industry currently competes on

Rate on a 1-5 Likert- type scale

Rate on a 1-5 Likert- type scale

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© Chan Kim & Renée Mauborgne. Blue Ocean Shift. All Rights Reserved.

• Selagi mengidentifikasi faktor-faktor persaingan utama yang akan muncul di sumbu horizontal, pastikan untuk menjabarkan dari sudut pandang pembeli, bukan organisasi • Orang – orang baik atau teknologi canggih adalah contoh faktor organisasi yang orang sering keliru anggap sebagai faktor persaingan utama. • Orang – orang baik, di mata pembeli bisa menjadi kecepatan layanan terhadap konsumen. Teknologi Canggih bisa diterjemahkan menjadi kemudahan penggunaan.

Step Three : Imagine Where You Could Be

• Now that the team has a strategic overview of the current state of play, the next step is to help them envisage how they might shift from the current red ocean into a new blue ocean. • This means charting the hidden constraints in the industry and identifying the new demand that could be unlocked.

• Develop an overview of all the underlying assumptions and boundaries that make up the ‘pain points’ that limit the industry.

Draw up a Buyer Utility Map

• These are not just constraints, they are opportunities to change the picture. • The Buyer Utility Map will help the team to see not only that every industry has pain points, but also that these are problems that can be solved. • The Map lists the six stages of the buyer experience, and the six utility levers that the organization can ‘pull’ to affect that experience.

Starting with the buyer experience cycle, the team should put themselves in the place of a buyer and imagine the total experience offering, from purchase through to disposal, identifying the specific activities that fall within each stage of the cycle

Buyer Experience Cycle At each stage, managers can ask a set of questions to gauge the quality of buyer’s experience. Purchase

Delivery

How long does it take to find the product you need?

How long does it take to get the product delivered?

Is the place of purchase attractive and accessible?

How difficult is it to unpack and install the new product?

How secure is the transaction environment?

Do buyers have to arrange delivery themselves? If yes, how costly and difficult is this?

How rapidly can you make a purchase?

Use Does the product require training or expert assistance? Is the product easy to store when not in use? How effective are the product’s features and functions? Does the product or service deliver far more power or options than required by the average ? Is in overcharged with bells and whistles?

Supplements Do you need other products and services to make this product work? If so, how costly are they? How much time do they take? How easy are they to obtain?

Maintenance

Disposal

Does the product require external maintenance?

Does use of the product create waste items?

How easy is it to maintain and upgrade the product?

How easy is it to dispose of the product?

How costly is maintenance?

Are there legal or environmental issues in disposing of the product safely? How costly is disposal?

Uncovering Blocks to Buyer Utility Uncovering blocks to buyer utility can identify the most compelling hot spots to unlock exceptional utility. Purchase

Delivery

Use

Supplements

Maintenance

Disposal

Customer Productivity:

In which stage are the biggest blocks to customer productivity?

Simplicity:

In which stages are the biggest blocks to simplicity?

Convenience:

In which stage are the biggest blocks to convenience?

Risk:

In which stage are the biggest blocks to reducing risks?

Fun and Image:

In which stage are the biggest blocks to fun and image?

Environmental Friendliness:

In which stage are the biggest blocks to environmental friendliness?

▪ A Blue Ocean Shift means creating new demand and growing the industry. To do that, the team has to understand who the non-customers are and why they are not buying your product or service.

▪ There are three tiers of non-customers. ▪ In the First Tier are those who patronize the industry

Identify the total demand landscape

because they have to, not because they want to; if they find a better alternative they will quickly move to it.

▪ The Second Tier are the refusing non-customers, people who have consciously rejected the industry offering perhaps in favor of an alternative or because it is too expensive.

▪ The Third Tier are all those who could benefit from your offering, but have never considered themselves as potential customers.

Step Four : Find How To Get There

• The next step in a Blue Ocean Shift involves systematically reconstructing market boundaries. • In order to identify new opportunities where others see only red oceans, the team will systematically work through the Six Paths Framework, with each Path revealing key insights into the existing constraints and hidden opportunities in the industry.

Four Actions Framework

Eliminate/Reduce/Raise/Create Grid Eliminate

Raise

Reduce

Create

Key Factors Key Competing Factors

List the key factors the industry currently competes on plus those that your ERRC grid shows as a "CREATE"

Your Company’s Offering Your Competitor’s Offering Level Level

Rate on a 1-5 Likert type scale

Rate on a 1-5 Likert type scale

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Step Five : Make Your Move

• The final step in launching the Blue Ocean Shift involves holding a Blue Ocean Fair and creating the Business Model. • To decide which strategic offering to pursue, hold a Blue Ocean Fair that brings all of the team together with the organization’s key decision makers, along with some customers and noncustomers, over the course of a few hours

▪ Give an overview of the current red ocean reality in the industry and make the case for a Blue Ocean Shift.

▪ The team presents each of the strategic options they created, summarizing the benefits for buyers or s and outlining the economic benefits to the organization.

The Fair should be structured as follows:

▪ Attendees move around the room, visiting a display station for each option with poster-sized versions of the to-be Canvas from Step Four and the Eliminate-Reduce- Raise-Create grid.

▪ The attendees vote for the options they consider most compelling. One this is complete, ask attendees for the rationale behind their votes.

▪ The executive team decides which Blue Ocean option to pursue.

Finally, it is time to roll out your Blue Ocean Shift. For the smartest Rollout Strategy, start small – to iron out any lastminute bugs and hiccups – then go fast and wide.