BLUE OCEAN STRATEGY SIMULATION WORKSHOP 11 – 12 AUGUST 2014 HOTEL EASTIN RM2,000 / RM1,900 (MEF members) Objectives The main objectives are to learn BOS process & methodology, test drive the tools on business simulation cases and develop strategic thinking.  To learn about new ways of thinking and doing business.  To stimulate creativity with the objective of structuring the ideas into viable future business propositions.  To systematically pursue high value – low cost strategic solutions without compromising profitability and sustainability.

What is Blue Ocean Strategy? Blue Ocean Strategy, developed by INSEAD, suggests that an organization should create new demand in an uncontested market space, or a "Blue Ocean", rather than compete head-tohead with other players in an existing industry.

We anrepresent international network of today trained BOS Red are oceans all the industries in existence – the and known certified market space. In the practitioners withboundaries extensive knowledge, experience and strategic red oceans, industry are defined and accepted, and the competitive rules of the alliances around thecompanies world to the learning andapractice of of game are known. Here try promote to outperform their rivals to grab greater share Blue Ocean Strategy. product or service demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or niche, and cutthroat competition turns the ocean bloody.

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Blue oceans, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.

Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that tomorrow’s leading companies will succeed not by battling competitors, but rather by creating “blue oceans” of uncontested market space ripe for growth. Such strategic moves—termed “value innovations”—create powerful leaps in value for the firm and its customer, rendering rivals obsolete and capturing new demand.

Blue

Strategy

provides

a

systematic

approach

to

making

the

irrelevant.

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Ocean

competition

Why is Blue Ocean Strategy important? To quantify the impact of creating blue oceans on a company’s growth in both revenue and profits, a study on business launches of 108 companies was conducted. The findings are: 86 percent of the launches were line extensions, that is, incremental improvements within the red ocean of existing market space. Yet they only accounted for 62% of total revenues and 39% of total profits. While the remaining 14 percent created Blue Ocean and generated 38% of total revenues and 61% of total profits (figure 1).

Figure 1: The strategic benefits of Blue Ocean Strategy

Now it is imperative to create blue oceans due to several driving forces. Accelerated technological advances have substantially improved industrial productivity and have allowed suppliers to produce an unprecedented array of products and services. The result is that in increasing numbers of industries, supply exceeds demand. With supply exceeding demand in more industries, competing for share of contracting markets will not be sufficient to sustain high performance. Moreover, the trend towards globalization compounds the situation. The result has been accelerated commoditization of products and services, increasing price wars, and shrinking profit margins.

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How does it differ from other strategies? Competition based strategies assume that an industry’s structural conditions are given and that firms are forced to compete within them, an assumption based on what academics call the structuralist view, or environmental determinism. To sustain themselves in the marketplace, practitioners of red ocean strategy focus on building advantages over

the

competition,

usually

by

assessing what competitors do and striving to do it better. Here, grabbing a bigger share of the market is seen as a zero-sum game in which one company’s gain is achieved at another company’s loss. Hence, competition, the supply side of the equation, becomes the defining variable of strategy. Here, cost and value are seen as trade-offs and a firm chooses a distinctive cost or differentiation position. Because the total profit level of the industry is also determined exogenously by structural factors, firms principally seek to capture and redistribute wealth instead of creating wealth. They focus on dividing up the red ocean, where growth is increasingly limited. Blue ocean strategy, on the other hand, is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players. This is called “reconstructionist view”. Assuming that structure and market

boundaries

exist

only

in

managers’ minds, practitioners who hold this view do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to demand, from a focus on competing to a focus on value innovation – that is, the

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creation of innovative value to unlock new demand. This is achieved via the simultaneous pursuit of differentiation and low-cost. As market structure is changed by breaking the value/cost trade-off, so are the rules of the game. Competition in the old game is therefore rendered irrelevant. By expanding the demand side of the economy new wealth is created. Such a strategy therefore allows firms to largely play a non–zero-sum game, with high payoff possibilities Blue Ocean Strategy uses the strategic move as the basic unit of analysis, and not the company or the industry, in explaining the creation of blue oceans and sustained high performance. A strategic move is the set of managerial actions and decisions involved in making a

major

market-creating

business offering. Examining a wide range of strategic moves across a host of industries, Blue Ocean Strategy highlights the six principles that every company can use to successfully formulate and execute blue ocean strategies. The six principles show how to reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy. In this game-changing book, Kim and Mauborgne present a proven analytical framework and the tools for successfully creating and capturing blue oceans.

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Program overview 2-Day Blue Ocean Strategy Simulation Workshop A 2-Day BOS Simulation Workshop is a program focused on “action learning” (directly experience and learn) whereby team of participants work through the entire BOS process using real business cases. Objectives The main objectives are to learn BOS process & methodology, test drive the tools on business simulation cases and develop strategic thinking.   

To learn about new ways of thinking and doing business. To stimulate creativity with the objective of structuring the ideas into viable future business propositions. To systematically pursue high value – low cost strategic solutions without compromising profitability and sustainability.

Approach Participants will be divided into small groups in order to create a highly interactive and dynamic environment. During the entire workshop participants will work through the systematic & dynamic process of creating BOS. In order to clearly transfer the learning points, BOS tools and frameworks will be applied on business simulation cases developed by UCSI BOSRC Consultants. They will also be given a participant workbook, which includes key slides, figures and charts, tools defined and explained for easy reference.   

Basic introduction to the concepts, tools and methodologies of creating and capturing Blue Oceans. Case studies (including video cases) from different industries. Hands-on exercises using the BOS tools in interactive group exercises.

Outcome Participants will learn techniques to generate fresh, big and bold ideas and develop critical thinking and enhance problem solving skills.

 Learn techniques to generate fresh, big and bold ideas.  Get a new perspective on business strategy (Blue Ocean Strategy Thinking).  Develop critical thinking and enhance problem solving skills. Who should attend? This workshop is designed by UCSI BOSRC Consultants and is suitable for innovative leaders such as Senior/junior executives who directly or indirectly influence the process of strategy formulation and decision making.

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Workshop Agenda Time 9:00 am – 10:30 am

Day#1

Day#2

Introduction

Visual Exploration (Cont’d)

What is BOS? Why BOS? How do you create BOS? Introduce the simulation cases

Six Paths Framework Part 1 Business Simulation

Tea Break 10:45 am – 1:00 pm

Tea Break

Visual Awakening

Visual Exploration (Cont’d)

As Is Strategy Canvas Business Simulation

Six Paths Framework Part 2 Business Simulation

Lunch Break 2:00 pm – 3:15 pm

Field Trip/Lunch Break

Visual Awakening (Cont.)

Visual Strategy Creation

Buyer Experience Cycle/Buyer Utility Map Business Simulation

Four Actions Framework To Be Strategy Canvas

Tea Break 3:30 pm – 5:00 pm

Tea Break

Visual Exploration

Visual Strategy Fair

Three Tiers of Noncustomers Business Simulation

Presentation/Prize/Learning Points Wrap up/Evaluation

Note: This is an indoor workshop exercise with no field exploration activities

Key Contents (Day-1): Session 1 - Interactive lecture Theme: Introduction  What is strategy? What is BOS?  Importance of proposition alignment  Interesting strategic moves (Case studies)  Introduce Simulation Case Session 2 - Interactive Lecture/Practical Exercise Theme: Get a wakeup call - Visual Awakening  Understanding the current strategic profile of the simulation case using the “As Is” Strategy Canvas tool  Presentation and discussion with consultant

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Session-3: Interactive Lecture/Practical Exercise Theme: Understanding pain points associated with customers – Visual Awakening (Cont’d)  Understanding customer pain points using the Buyer Utility Map (tool)  Presentation and discussion with consultant

Session-4: Interactive Lecture/Practical Exercise Theme: Discovering new potential customers also known as noncustomers – Visual Exploration  Systematically identifying new customers using the 3 Tiers of Noncustomers tool for the simulation case  Presentation and discussion with consultant

Key Contents (Day-2): Session-5: Interactive Lecture/Practical Exercise Theme: Systematically thinking out of the box (Part 1) – Visual Exploration (Cont’d)  Using the 6 Paths Framework tool with interesting Case illustrations  Exploring actively the 6-path framework tool for the simulation case (Path 1, 2,3)  Presentation and discussion with consultant Session-6: Interactive Lecture/Practical Exercise Theme: Systematically thinking out of the box (Part 2) – Visual Exploration (Cont’d)  Using the 6 Paths Framework tool with interesting Case illustrations  Exploring actively the 6-path framework tool for the simulation case (Path 4,5,6)  Presentation and discussion with consultant Session-7: Interactive Lecture/Practical Exercise Theme: Creating a Blue Ocean – Visual Strategy Creation  Increasing buyer value and reducing cost by applying the 4-Action framework & ERRC Grid tool  Drawing the new strategic profile using the “To Be” Strategy Canvas for the simulation case  Presentation and discussion with consultant Session-8: Presentation/Practical Exercise Theme: Presenting BOS via Visual Strategy Fair  Presenting the new strategy and compelling story to the rest of the group  Debrief and feedback gathering to strengthen the learning outcome  Wrap up

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Trainer Profile David G. Noon Senior Manager David Noon has spent much of the past 20 years in senior managerial roles from finance to property and information technology. After a successful business turnaround engagement in Australia between 1992 and 1994, David spent over 5 years in finance role at a billion dollar real estate Developer Company, playing a pivotal role in finance planning and project execution of the Vietnam based project. Having been part of the finance team which secured an early financing round of US$190 million, David finance skills were further utilized in managing US$100 million trade and operation credit facilities and later in marketing a US$250 million dollar fund. Having been involved in a number of businesses from furniture manufacturing to technology to investment fund management and real-estate development, David has gained a wealth of experience in management from strategic planning to operations. Furthermore, his experiences were been gained in a variety of cultural and market settings from Australia to Vietnam. David has worked with multinational corporations such as HSBC, Hunter Douglas, Sherwin Williams Inc. (USA), IKEA Trading, Carrefour and Metro Group as well as smaller privately held companies. He has worked in Australia, Taiwan, Vietnam and the USA prior to joining the Malaysia UCSI Blue Ocean Strategy office. Drawing from his rich reservoirs of accumulated business acumen, as a Senior Consultant, David now focuses on deploying Blue Ocean Strategy to help organizations to value innovate and create new market space with highly profitable growth.

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Azizbek Dusbaev Business Analyst Azizbek Dusbaev graduated MBA from UCSI University in Malaysia and Bachelor of Finance from Tashkent Financial Institute in Uzbekistan. He joined UCSI Blue Ocean Strategy Regional Centre in August 2012 as a Business Analyst. Azizbek has started his carrier in the Government sector as a Leading Specialist of the Centre for Coordination and Control over Functioning of Securities Market of Uzbekistan, from 2008 to 2009. He contributed in controlling the players of the Securities Market based on the Government regulations. From 2008-2010, Azizbek was also appointed as an Economist of Outdoor Advertising Company in Uzbekistan. His work with various sectors during his Bachelor degree helped him to have an in-depth understanding of the Advertisement industry and its stakeholders. His main focus has been bringing the various national companies to global arena. Azizbek has written numerous articles in academic journals (Uzbekistan) regarding trends to access the World Market. From 2011, Azizbek started his Internship Programme in UCSI Blue Ocean Strategy Regional Centre and was involved in BOS Projects to create Value Innovations. Currently, Azizbek focuses on Small and Medium Enterprises to identify the key growth areas and game changer ideas using Blue Ocean Strategy systematic Tools and Methodologies.

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