BLUE OCEAN STRATEGY

SIMULATION ASSIGNMENT (PART

1)
SUBMITTED BY: CHARU CHOPRA (2009-015-A)

TEAM: IABET

ROUND ANALYZED: BLUE ROUND 3

Blue ocean strategy can be created in 2 ways

• By creating a differentiated product or a product for a new market

• By creating service and delivery offerings that add such value to the product
which doesn’t already exist

My key learning from the Blue ocean strategy simulation has been that it is necessary
to rotate and innovate in all the 3 categories i.e.

• product features and characteristics,

• service offerings

• distribution strategy,

so that even if a competitor tries to imitate you, he cannot copy and re-build your
offerings completely. However, while doing this, it is necessary to make one of these
three as your core strength and leverage on it extensively, like Dell banks on its
distribution strategy.

In Blue Ocean Round 3 there were 2 visual exploration paths:

• Path 4: Looking Across Complementary Product and Service Offering: In

this path, there were multiple service offerings given to be chosen from. These
were from various different arenas like pre-sales, after-sales support, product
maintenance and promotional characteristics like offers, discounts and bundles
etc.

• Path 5: Looking Across the Functional and Emotional Appeal for Buyers:
there were options like online stores, franchisees and dedicated stores to choose
from apart from unconventional delivery channels like game parlours where
demonstrations were easy.

Instead of choosing one of the two paths, we decided to incorporate the features of
both that were relevant to our TG. However, as specified in the strategy above, we
focused on service (i.e. Path 4) as our core strength and we prioritised the features to
be ‘created’ and ‘enhanced’ as well as the projects to be commissioned based on this.

According to our product offering created in Blue Round 1 and honed in the subsequent
round, our target group was

• 36+ years olds (primary)

• 22-35 years olds (secondary)

We consciously decided to not target the 6-21 years old as the product features they
demanded were significantly different from the other two groups.

As was mentioned in the handbook, the Shopping Preferences of each segment were as
follows:

Figure - Shopping preference by age band

Based on the above figure we decided to concentrate our distribution in specialized

electronic stores, video game parlours and through online retailing.

This is how our final service and delivery offerings looked like
YEAR 2014

Services and delivery factors raised all created in 2013 were more or less a combination
of Path 4 (services) and Path 5 (delivery).

In the initial strategy canvas, these were the features we incorporated:

Online

• quality of online support

• ability to buy from a catalogue

Specialized Electronic stores

• dedicated stores

• informed salespersons

Service (offers)

• deals and price promotions

• speed of providing patches

• number and complexity of bundles

Service (after sales)

• warranty offer

• corrections to games

• ease of repair

• after sales help and advice

To put into action the Four Actions framework and to filter the
insights according to the requirements identified, we did the
following:

• Eliminate (as these features either created a negative impact

on our selected non-onsumer group or were only required or
asked for by the TG that we were not targetting)
o Ability to swap games
o Extended warranty
o Loyalty cards and rewards
 o Manufacturer’s insurance
o Ability to buy from an online catalogue
o Trial and return

• Reduce

o Online gaming
o Warrantly offer
o Deals and promotions

• Raise

o Speed of repair
o Speed of providing patches
o After sales help and support
o Informed and friendly salespersons
o Direct sales
• Create
o Dedicated stores
o Gaming parlours
o Online buying option
In this period, two projects were initiated

• Hiring Expert Trainers To Train Distributors’

Salespeople: return expected was likely to be large and the
project would be vital for the new delivery strategy to succeed

• Hiring The Talk Team From A Region Is Specialist

Luxury Goods Retailer: was important because we were
looking at creating a specialist dedicated store.

Post 2014, the quality of online support and other offerings for online
distribution did not do too well. The demand exceeded production by
1240 thousand units and we had to pay an inventory adjustment cost
which affected our marketing budget in the subsequent period.

YEAR 2015

In the years 2015, our services appealed a lot to the non-customers

while the delivery part was not very satisfactory though both of them
gave us good margins and boosted our sales incredibly. The product
along with delivery and service characteristics lived up to the new
value factors necessary to unlock the markets. In this year, our online
delivery channel gained well, dedicated Stores added a lot of value
due to the project commissioned in the previous year being
implemented. The after sales service was sought after and gave us
excellent returns.

However, again despite increasing our production two-folds, the

production plan was insufficient by 2749 thousand units

Projects implemented in this period were:

• Hiring Expert Trainers: helped the organization’s

capabilities in delivery to significantly improve

• Hiring A Team Experienced In Developing And

Managing A Fast Food Franchise: vital for our new delivery
strategy to succeed

Projects commissioned in this period were:

• Radically Upgrading Leadership And Service In The

Customer Contact Centre: vital for our new service strategy
is to improvement in the contact centre could revitalise many
other service functions within the organization

YEAR 2016

2016 projects implemented

• radically upgrading leadership and service in the

customer contact centre: significantly improve capabilities
in services

By this period we had expanded our geographical target to 100% in

both the markets and implemented all the projects available to us.
However, the demand was still not met instead of our increasing the
production manifolds. This is one flaw in the simulation i.e. it has no
tool yet that lets you visualize or forecast the demand accurately. It is
still hugely and solely based on intuition.
 BLUE OCEAN STRATEGY
SIMULATION ASSIGNMENT
(PART 2)
AIRCEL BUSINESS SOLUTIONS

Aircel Business Solutions is the enterprise arm of the telecom

company Aircel. It caters to the ICT (information and
telecommunication) needs of enterprises. It creates and manages
services and products for other organizations. When I joined ABS, it
was in its inception stage. They were identifying the markets to be
targeted and were conceptualizing the products and services to be
offered in that market.

They decided to let go off the cluttered Large-Enterprise segment and

focused their service offerings and limited them to small and medium
scale enterprises (SMEs). It was a perfect ground for applying and
testing a blue ocean strategy.

For ABS the following could be a Blue ocean offering. As they were
catering to SMEs, who had limited capital, low manpower and usually
low ICT expertise and infrastructure, there seem to be a good
opportunity if they could:

• Provide solutions with a good return on investment (ROI).

• Take part in long-term projects that helped the SMEs manage
complex infrastructure and applications (methodology and
scalability);
• Provide transparency on processes, as well as a define clearly
business cases showing the company’s capabilities in long and
complex projects.

PRODUCT FEATURE

• Connectivity – most of the small businesses and enterprises

are still using broadband connections provided for homes.
There is a scope for migrating them to specialized connectivity
solutions
• Value-added services – many small businesses make do
with consumer services, but recognize that as businesses they
ought to be looking for more than just connectivity. According
to a report, only 25% of SMEs in India have a Firewall.
• Growing role of the Web – less than half the SMEs we
talked to have a website, even fewer have an Intranet, and yet
 these are the first steps towards enhancing productivity both
within a company and between its customers and suppliers
• Convergence –emerging convergence of voice, data and
content, the internet and telephony, as well as FMC can
stimulate demand within the SME segment for more
comprehensive and less disconnected standalone solutions
• Mobility – the workforce in most companies is far more
mobile than it has been in the past, with connectivity required
from phone, fax, mobile, desktop, laptop, Smartphone to and
from the office, home, hotel, or on-the-move. This increased
mobility leads to a greater mix of communications, needing a
trusted partner to manage it
• ERP and Equivalents: Everyone needs an organization wide
solution
• broader portfolio/incremental ICT sales: give them a
complete portfolio and tell them stages in which they can
install/implement

SERVICE SPECIFICATIONS

The SME market is highly competitive with limited difference in

performance of various organizations. They demand a host of service
characteristics in the services that ABS would provide. The service
features are outlined below:

Overall, our Path would include the following 5 features that are
indispensible for ABS if it has to enter and reign as a leader in the
SME market:
 BLUE OCEAN STRATEGY
SIMULATION ASSIGNMENT
(PART 3)
INDUSTRY SELECTED: VIRTUAL EDUCATION

TARGET NON-CONSUMER: ADULTS (35+ YEARS

OLDS)

TARGET GEOGRAPHY: URBAN INDIA

WHAT IS VIRTUAL EDUCATION

Virtual education is a system wherein the student and teacher do not
necessarily have to be in the same geographical location for
imparting knowledge and delivering course curriculum.

Currently, in India, no virtual education system allows for teacher and

student to be available on the virtual system at different times.
Hence, for my strategy I look at a system that would allow for
recorded lectures, and teachings from various time-zones.

Moreover, based on artificial intelligence, the system will not be

limited by a single pedagogy or curriculum, the student, based on his
or her profile and interests will be able to choose the combination of
lectures he wants to take and the methodology of his study. The
examination will also not be binding on date and time.

In India, the internet infrastructure is not too advanced, therefore to

make the service offering available to a larger segment, it is
necessary to provide low bandwidth and offline classroom teaching.
As and when 3G makes in-roads, the model can be evolved and made
more multimedia and technology heavy.

CURRENT SCENARIO

Mistakes made in virtual education

• Thinking that virtual education=mass education

 • Complexity and mystery are associated with virtual education
to make it an elitist offering

• Teachers are dictated by technology rather than being in a

commanding position

• The content is too multimedia heavy and therefore requires

huge bandwidths

• Real-time classes also need a high bandwidth

SUGGESTED BLUE OCEAN OFFERING

Virtual education in India currently looks at correspondence students,

and looks at centre where students can gather, use a PC provided by
the centre and connect to an online tutor.

My blue ocean offering in the field of virtual education for adults in

India, provides the following differentiation:

REDUCE AND ELIMINATE

• Recordings of lectures that can be watched at ease. These will

help working adults as well as housewives who wish to pursue
education while at home. This will reduce the time constraint
and in-flexibility of the online system.

• These lectures, mentioned above, can be left on streaming,

while the student completes his or her other work and can
then we watched at leisure. This prevents band-width suction
and saves time and inconvenience.

• Both the above points also eliminate the necessity for a centre
and hence reduce infrastructure and capital costs

• The system eliminates the need for a college building, staff

and on-roll teachers.

• The inflexibility of taking examination on a single date and

time will be eliminated and replaced with a window in which a
student can take a particular assessment.

CREATE AND RAISE:

SERVICE OFFERINGS
• Human – computer interface: A lot of investment has to be
put into creating easy to understand user interface and
navigations as the adults may not be very tech-savvy and
too much of technology expertise requirement would irk
them away from the system
• Access, delivery, scheduling and recording: as it is an
online system where the administration or guidance of a
mentor is not available on-site of consumption of
 educational content, the scheduling, recording and other
processes need to be of very high quality and should be as
error-free as possible
• Interactivity of the system has to be increased in terms of
student-teacher interaction beyond classrooms, and also in
the form of peer-to-peer interaction and socialization.
• As the system talk about recorded lectures and options for
interactivity and interfacing, therefore it has all the grounds
to enroll world-class faculty, industry speakers and pioneers
to record lectures and sermons thereby creating additional
value.
• As the system is being designed for working professionals
as a target group, there can be a peer-to-peer discussion or
sharing forum that enables these people to share their
experiences and expertise in their fields of work. This could
be a value add for people from their field as well as people
who are inquisitive about that particular field.
• There is a need to create a good standardization of
processes so that repeat customers and new customers do
not have to face unnecessary hassles in the absence of on-
site help.
• A robust feedback system has to be created where the
profile and progress of a student will be maintained. It has
to be supplemented with a period-to-period one-to-one
feedback from faculty and system architects on the in-
roads that the student has made
• There has to be incentive for a student, specially a house-
wife, to come back to the education platform the next day.
Therefore based on the profile of the student created
above, the system should have great artificial intelligence
capabilities to suggest stuff to the student for the next
lecture that interests him.

All the above has been depicted in the form of an ERRC grid below:
BENEFITS

The system is a low cost solution for education as compared to other

virtual education models that involve a study centre. Secondly, it
creates humongous value for working professionals and housewives
who could otherwise not think of pursuing further education due to
stigma of going out and studying at their age or due to lack of time.