Blue ocean Strategy
The science of making competition
irrelevant
© 2012 Regalix Inc. Confidential, All Rights Reserved

What is blue ocean strategy about?
• Based on the best selling books HBR press – translated
in over 41 languages
• It’s a culmination of a decade long study by Renee
Mauborgne and Chan Kim , who studied over 150
strategic moves spanning more than 30 industries over
100 years (1880-2000)
• BOS focuses on making competition irrelevant by
creating uncontested marketspaces.
• BOS covers both strategy formulation and strategy
execution.
• BOS offers a set of methodologies, tools and
frameworks that makes it a structured, learnable
system.
© 2012 Regalix Inc. Confidential, All Rights Reserved

Blue Ocean Strategy
In Today’s webinar In the concluding part
Search Risk
Planning
Risk
Strategy
Formula Scale Risk
BOS - tion
Tools &
Framew Business
orks Model Risk
Organizatio
Strategy nal Risk
Executio
n
Manageme
nt Risk
© 2012 Regalix Inc. Confidential, All Rights Reserved

The color - Red and Blue
© 2012 Regalix Inc. Confidential, All Rights Reserved

A quick reality check of how red or blue your
company is?
Does your company feel that Is your company increasing
Does your company depend on
they are facing increasing advertising and marketing
offering deeper and deeper
competition from rivals? spends every year, yet the
Domestic , International , Small price discounts to make sales
impact of these efforts keeps
player, Large Player, MNC’s, basically happen?
scared of everybody falling?
Is your company focusing on
Do people in your company Is your company seeing
cost cutting and quality control
blame slow economic and outsourcing and job cuts as a
at the expense of
market conditions most of the way to regain competitiveness
growth, innovation, and brand
time? and profitability?
creation?
Does your company
Does your company think that
management sees mergers Is your company now starting
it easier to follow competitors
and acquisitions as one of the to worry that the marketplace
than to break away from
principal means to grow in has become crowded?
them?
future?
if your answer to three or more questions is YES - You are in Red Ocean
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Red Ocean
• A Marketplace where companies compete with each other
on a daily basis.
• When companies compete, it becomes battle field for :
• Acquiring market shares
• Increasing revenues
• Maximization of profit by reducing costs and value
• Basically beating competition consumes most of the effort, time and
resources
• Such companies are called Red Ocean companies.
Such companies fight for competitive advantage with two
strategic weapons - Differentiation and Price
© 2012 Regalix Inc. Confidential, All Rights Reserved

Cost and differentiation dilemma
But there can be only one price
leader in an Industry
And differentiation would mean
higher cost.
• More the differentiation – Higher the segmentation
• Higher the segmentation – lower would be the market size.
© 2012 Regalix Inc. Confidential, All Rights Reserved

Also the size of the market pie is fixed
i.e almost all the companies in an industry are competing for an increased slice of the same pie
But the real objective of business is not fighting – its about
creating profit and value
© 2012 Regalix Inc. Confidential, All Rights Reserved

“Skillful leaders win wars without any fighting”
------ Sun Tzu
‘ Art of War’
© 2012 Regalix Inc. Confidential, All Rights Reserved

Brief: Blue ocean strategy
• Blue ocean strategy builds new businesses where
none existed
– By tapping the untapped market space Price
– By creating demand
– Thereby making competition irrelevant
• Blue ocean strategy is about simultaneous pursuit of
Value innovation –
value innovation and low cost simultaneous
• Value innovation is defined in terms of value/ utility pursuit
of high value &
for customer low cost
• Blue ocean markets are usually more profitable
Value/ product
than markets with head to head competitors
features
– Cost savings by eliminating and
Blue ocean strategy Blue ocean strategy reducing the factors an industry
defines innovation in focuses on value competes on
terms of value of innovation and cost as a – Buyer values is lifted by raising &
customer simultaneous pursuit. creating elements the industry has
never offered
© 2012 Regalix Inc. Confidential, All Rights Reserved

Red Ocean Vs. Blue Ocean
Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space Create uncontested / New market space
Beat the competition Make the competition irrelevant
Create a value – cost trade off Break the value-cost trade off
Competitive Advantage Value Innovation
Segment existing customers Attract noncustomers
Exploit existing demand Create and capture new demand
© 2012 Regalix Inc. Confidential, All Rights Reserved

How do you identify these companies?
Blue Ocean with ipod, iphone & ipad
Blue ocean from prescription
drug to lifestyle
Blue ocean by making
Music portable
Blue Ocean in low cost travel
Blue Ocean in Luxury Travel Blue ocean in Search
Blue ocean with making no frills
barbershop
Blue Ocean by increasing Customer productivity
Blue Ocean in Insulin market
Blue Ocean through tipping point leadership
Blue Ocean by looking across complimentary products
Blue Ocean in coffee bars
Blue Ocean in Apparels
Blue Ocean by making copiers a desktop
utility and not office equipment
Blue Ocean in Gaming
These are the companies that questioned the norms and
boundaries set by the industry and seized their market
shares without fighting with anyone!
© 2012 Regalix Inc. Confidential, All Rights Reserved

Lets explore how these companies got there
•Case Study 1: NETJETS
•Case Study 2: Indochino.com
•Case Study 3: Zynga Games
•Case Study 4 : Khan Academy
© 2012 Regalix Inc. Confidential, All Rights Reserved

Six path to blue ocean strategy
Conventional boundaries in a competitive
marketplace
Industry - industry size &
dependencies
Strategic groups – strategic groups i.e
customer , vendors etc
Buyer group- individual customer
From competing buying processes Creating value
within across
Scope of product: scope of adding
value with complementing products
Functional/ emotional orientation
of the industry: functionality vs.
Blue ocean Strategy
Emotional appeal tradeoff
Time: value that an attribute might
deliver tomorrow
• Blue oceans can be created by exploring outside of industry boundaries
• Break out of the traditional boundaries of the industry to unlock value
• “out of the boundaries” thinking framework for unlocking value
© 2012 Regalix Inc. Confidential, All Rights Reserved

6 PATHS: Exploration Outside of Traditional
Boundaries
Path 1 - Industry
What are the alternative industries to your industry? Path 2 – Strategic Group
Why do buyers trade across to them? What are the strategic groups in your industry?
Why do buyers trade up for the higher group, and why do
NTT DoCoMo, Federal Express, Southwest Airlines, NetJets
they trade down for the lower one?
Polo Ralph Lauren, Curves, Sony Walkman, Toyota Lexus
Path 3 - Buyer Group
What is the chain of buyers in your industry?
Which buyer group does your industry typically focus on?
If you shifted the buyer group of your industry,
how can you unlock new value?
Novo Nordisk, Bloomberg Terminals, Canon Copiers, Philips Alto
Path 4 - Scope of product or service offering
What is the context in which your product or service is used? What
happens before, during, and after? Can you identify the pain points?
How can you eliminate these pain points through a complementary
product or service offering?
Borders and Barnes & Noble, Dyson Vacuum Cleaners, Kinépolis Kiné-
kids, Zenick Salick’s Cancer Centers
Path 6 - Time Path 5 - Functional-emotional orientation of an industry
What trends have a high probability of impacting your industry, are Does your industry focus on functionality or emotional appeal? If you
irreversible, and evolving in a clear trajectory? How will these trends compete on emotional appeal, what elements can you strip out to make it
impact your industry? Given this, how can you open up unprecedented functional? If you compete on functionality, what elements can be added
customer utility? to make it more emotional?
Apple Music, Cisco Systems, CNN, Starbucks, QB House, Direct Line Group, Pfizer’s Viagra
HBO’s “Sex and the City”
© 2012 Regalix Inc. Confidential, All Rights Reserved

More understanding of the frameworks & tools
Case Study - 1
• Introduction to Strategy Canvas
• Introduction to 4 Actions framework
© 2012 Regalix Inc. Confidential, All Rights Reserved

Can you name the world’s largest airline?
Its not Delta, United, Lufthansa, or South West …
• Over 800 aircrafts
• Over 6300 employees
• 285000 flights annually
•Flying across 170 countries and 2200 airports
© 2012 Regalix Inc. Confidential, All Rights Reserved

Strategic questions before NETJETS
– How to enter into the aviation space when the market was dominated by the big airline groups? –
1983.
The red ocean
•Over 20 domestic and international airlines
• All of them catering to similar customer groups – i.e. Business travelers, holiday travelers and casual
travelers
•Corporates – biggest strategic groups - spent millions on executive travel every year
•All travelers – including executive travelers had to go through the long check ins, security
checks, hectic flight transfers, congested airports, baggage claims ….
•Business travelers only have the option of business class/ first class or corporate jet
The blue ocean
• Business travelers are the most frequent and regular flyers
• NETJETS offered business travelers “ the convenience of a private jet at the price of a airline ticket”
• NETJETS also provided fractional 1/16 ownership of the aircraft
• NETJETS provided Private aircraft at 4 hours notice ( much less than flight booking)
• NETJETS provided no hassles or responsibilities of aircraft maintenance
• Customized in flight services – much better than business class or first class services
NETJETS Converted a B2C industry into a B2B Industry
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Strategy Canvas
NETJETS
High
Medium Business / 1st
Class Travel
Relevance Scale
Low Commercial
Airline Industry
Dead head Hassle free Time Savings/ Flexibility &
Price Faster Travel
Jet Ownership In Flight Service
Costs Travel Reliability
Attributes of Industry & Competitors
NETJETS Commercial Airline Business / 1st
Industry Class Travel
• The strategy canvas is the central diagnostic and action framework for building a compelling blue
ocean strategy.
• The Strategy canvas serves two purposes:
– It captures the current state of play in the known market space. This allows you to know where you
are viz competition
– It propels you to action by reorienting your focus:
• From competitors to alternatives
• From customers to non customers of the industry.
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Four Actions Framework
REDUCE
Factors that should be well
below the industry
standard
ELIMINATE CREATE
Create A
Factors that the industry New
Value Factors that the industry
takes for granted and need
has never created
to be eliminated Curve
RAISE
Factors that should be
raised above the industry
standard
• We use the four actions framework, to reconstruct buyer value elements in
crafting a new value curve.
© 2012 Regalix Inc. Confidential, All Rights Reserved

Net Jets 4 Actions
Eliminate Raised
• Airport check ins, waiting •Convenience, comfort & luxury
time, baggage, transfers and other •Customized in-flight services
time losses for customer •Entire private jet for the user/s
•The tiredness and hassles endured • Service standards
during a journey by the corporate • On time take off & arrival
• Available on 4 hours notice
traveler
Reduced Created
• Private jet buying, maintenance and
administrative costs
• Time for travelers – same distance now •Fractional ownerships of plane
took half the time because there is no • B2B industry when the entire
checking, boarding or baggage claim time industry was still B2C
• Other dead head costs : •Loyal customer base
scheduling, ticketing, administrative or marketing
costs
© 2012 Regalix Inc. Confidential, All Rights Reserved

Case Study – 2:
The Story of
© 2012 Regalix Inc. Confidential, All Rights Reserved

The story is …
• Heikal Gani needed a suit for an important presentation. He faced a
major challenge.
– Affordable suits didn't fit well or were not comfortable
– Ones that fitted well were not of latest trend / design
– One hardly has the time to go to a tailor to get a customized suit done
– Designer suits of latest design & trend were too expensive
There had to be a better way for men to find a great-fitting suit
• World’s first self service virtual suit company
• Customers can choose the fabric, design style and Results :
accessories • Started in end of 2009 – have started averaging
• Customers get customization of suits through the site
sales of over 30,000 suits a year across 60
• Customers measure themselves and provide fitting details
countries, with about 30 + employees
through online video tutorial
• Most suits priced under $500 ( Much lesser than designer
• Student start up to a global brand in less than 2 year
suites ) •Sales growth rate of over 200% every year
• Suit tailoring in Shanghai’s network of tailors • A beeline of Venture Capitalist wanting to invest –
• Delivery in two to three weeks –
have already raised over 20 mn for operational
• If order is less than perfect, indochino pays for local
expansion in Vancouver & Shanghai
tailoring or remake the suit free Regalix Inc. Confidential, All Rights Reserved
© 2012

Creating the blue ocean
Traditional apparel / suit companies Indochino.com
1) Industry divided into five segments
• Haute couture
• Luxury
• Affordable luxury 1) Indochino.com does not compete
• Mainstream in any of the segment
• Discount
2) Indochino.com does not get affected
2) The traditional companies competed by the industry factors
among each other on the following
factors: 3) Indochino.com built its brand
• No of stores reputation by delivering value
• Location of stores – premium stores –
premium brand 4) Indochino.com outsources all suits
• Range or no of lines offered to quality and reputed tailor network
• Hi fashion vs customization vs price in shanghai - China
tradeoff
Created and captured a new market
3) Marketing & brand reputation demand
( Top brands associated with designer labels)
4) High customization costs
© 2012 Regalix Inc. Confidential, All Rights Reserved

Indochino.com 4 Actions
Eliminate Raised
• Need to go to store
• Customer satisfaction & Quality
• Store presence in hi end posh locations
• Convenience / ease of shopping
• Inventory and Store management costs
• Affordability of quality suits
• Separate costs for customization / tailor
Reduced Created
• Price
• Delivery & customization hassles •Fully self service customization
• Marketing costs • 100% return policy
• No of lines offered
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Strategy Canvas – Indochino.com
Indo Chino
High
Medium
Low
# of Lines Customiz Ease of Return Self
Relevance Scale
Price Location Marketing Offered
Quality Online
stores ation Shopping Policy Service
Indo Chino Hi End – Designer Suits Low End Suit Market
Attributes of Industry & Competitors
• Indochino.com - expanded the market by making good quality suits affordable
• It used technology to make things simple, functional and to add value
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Technology Trap
Use of technology challenges the conventional systems & process.
• But companies should not get carried away by the “technology”
• Technology innovation is not necessarily value innovation for buyer /
customer every time.
– Because use of cutting edge technology does not mean cutting edge utility for
the buyers
– Unless technology makes buyers lives simpler
The buyer utility map helps managers to :
• Avoid the technology trap
• Refine value innovation
• Enables a birds eye view of buyer utility
• Takes into account the buyer experience cycle and utility leavers
© 2012 Regalix Inc. Confidential, All Rights Reserved

Buyer Utility Map
A buyer’s experience can usually be broken into a cycle of six stages, running more or less
sequentially from purchase to disposal. Each stage encompasses a wide variety of specific
experiences. At each stage, managers need to ask a set of questions to gauge the quality of buyer’s
experience.
Purchase Delivery Use Supplements Maintenance Disposal
•How long does it •How long does it •Does the •Do you need •Does the •Does use of the
take to find the take to get the product require other products product require product create
product you need? product training or and services to external waste items?
delivered? assistance? make this product maintenance?
•Is the place of •How easy is it to
work?
purchase •How difficult is it •Is the product •How easy is it to dispose of the
attractive and to unpack and easy to store •If so, how costly maintain and product?
accessible? install the new when not in use? are they? upgrade the
•Are there legal
product? product?
•How secure is the •How effective •How much time or environmental
transaction •Do buyers have are the product’s do they take? •How costly is issues in
environment? to arrange features and maintenance? disposing of the
•How easy are
delivery functions? product safely?
•How rapidly can they to obtain?
themselves?
you make a •Does the •How costly is
purchase? product or disposal?
service deliver far
more power or
options than
required by the
average user? Is
in overcharged
with bells and
whistles?
© 2012 Regalix Inc. Confidential, All Rights Reserved

Uncovering Blocks to Buyer Utility
Uncovering blocks to buyer utility can identify the most compelling hot spots to unlock exceptional utility.
By locating your proposed offering on the thirty-six space of the buyer utility map, you can clearly see
how, and whether the new idea not only creates a different utility proposition from existing offerings but
also removes the biggest blocks to utility that stand in the way of converting noncustomers into
customers.
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
In which stage are the biggest blocks to environmental friendliness?
Friendliness:
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Buyer Utility Map – Indochino.com
Buyer Experience from Decision to Disposal – (For Emerging Industries)
Purchase Delivery Supplements Disposal
Choosing a
Suit ( Does the suit
The Usage and
Choosing a Store
Return Policy Maintenance
Color, Style, & require tailoring
How Fast can the Fabric) experience in this case
transaction be
made?
remains constant, i.e
Getting Suit How Time
Secure
consuming
same for existing
Transaction Delivered
industry as well as blue
Environment
oceans
Is it
Productive for the
buyer?
Utility Leavers
Does the buyer find it
simple?
Does the buyer find it Blocks in Blocks in Blocks in
Convenient? tradition tradition New
al al industry
as well Buyer Buyer
Does it reduce buyers' as new Utility Utility
Risk Utility
Buying Experience
• Buyer Utility Score – Lower than what is prevalent in the current industry
• Therefore Indochino.com raised the Buyer Utility and Experience
© 2012 Regalix Inc. Confidential, All Rights Reserved

Case Study - 3
• Introduction to three tiers of non customers
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Story of Zynga
• Founded Zynga in April 2007 with a mission “Connect the world
through games”
• Has over 3000 Employees and 270 million customers, 60 mn daily
active users
• Largest Social games developer of Facebook
• Now provides games in multiple platforms like:
– Facebook, Myspace, Android, ipad, iphone, yahoo & Farmville.com
• Successful IPO to raise up to $1 billion in an initial public offering on
July 1, 2011; Valuation of over $7 billion
• Has made over 15 game studio acquisitions in last 2 years
• Generates over $1.16 billion in annual revenues in 2011
• Zynga is approached billion dollars revenue after only four years.
– Surpassing the market value of the longtime console game company EA
Sports
© 2012 Regalix Inc. Confidential, All Rights Reserved

Creating the blue ocean
Traditional Gaming Companies
Zynga
1) Industry divided into four segments
• Console based games
Zynga’s Farm Ville
• Online Games
• Mobile Games & Flash Games 1) Zynga did not compete in any of the
2) Console based games dominated the marketplace segment or market player dominance
with 75% of the revenues.
3) The big four of the gaming dominated 95% of the 2) Zynga’s (Farm Ville) did not get affected
console marketplace (sony, Nintendo, Xbox ..) by the industry factors
4) The Traditional gaming companies competed
among each other on the following factors:
• Consoles – Type speed, capabilities 3) Zynga built its brand reputation by
• No of titles in each genre sharing and word of mouth connect
• Speed of Title Release – weekly, monthly
• Hi end real time graphics
• Hi end accessories 4) Zynga caterered to all – children,
5) Catered only to gamers – Teenage boys to parents, professionals …
professional gamers 5) Zynga created a new genre of
education / simulation games
6) Addictive and had lot of side effects – Too much
violence, addiction, Lack of exercise, not mind Created and captured a new market
stimulating
7) Parents usually do not recommend / Buy
demand
© 2012 Regalix Inc. Confidential, All Rights Reserved

4 Actions Framework - Zynga
Eliminate Raise
• Game consoles
• High cost of playing games – free • Community & sharing qualities in games
• Violence in games • Interactivity with friends
• Genere based games • Creativity, education & learning quotient
• Winner – loser syndrome
Reduce Create
• New revenue models
• Graphics
• no console or title based revenue
• Hi-end technology – leveraging facebook
• Partnerships & advertising based
• Effort & time involved in playing games revenue
• Entry barriers for users • Games that makes friends
•Marketing costs
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Strategy Canvas- Zynga (Farm Ville)
High
Medium
Low
Consoles
Time & Winner/ Graphi Game Marketin Commun Educati
Relevance Scale
& Cost Violence Loser ity
Sharing Creativity
Hardware Effort cs Genere g on
Traditional Gaming Industry Zynga
Attributes of Industry & Competitors
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Three Tiers of Non Customers
Tier 3 Non
Customers Tier 3 non customers: “unexplored” non customers who are in markets
distant from yours.
Tier 2 Non
Customers
Tier 2 non customers: refusing noncustomers who consciously choose against your market
Tier 1 – Non
Customers
Tier 1 non customers : “soon-to-be” noncustomers who are on the edge of
your market, waiting to jump ship
Non Customers
Managing the three tiers of Non customers
Tier 1 non customers :
Investigate un satisfaction
Key commonalities across needs & desires
E.G. PRET A MANGER- British fast food chain
Tier 2 non customers:
Eliminate access barriers
Economic, functional, education, geographical
Tier 3 non customers:
Remove long held assumption on customer needs & behavior
© 2012 Regalix Inc. Confidential, All Rights Reserved

What did Zynga Change?
Tier 1 Non-Customers Tier 2 Non-Customers Tier 3 Non –Customers
Regular players – teenage boys, Casual Players - working Parents- women/
Audience teenage girls men/ women became casual housewives
players
Change 1 Changed genres completely – Cost of acquisition – free Removed violence
from shooting, arcade, racing,
to simulation
Change 2 Made social networking fun Eliminated hassles of consoles, Play with friends and family –
and more exciting game titles, accessories, not necessarily together /
hardware & setups real time
Results Fun lasts longer, with reduced Non serious casual play to relax No winner – no loser
time and effort / unwind
• Zynga looked across non customers and attracted new buyer groups to
create an industry that did not exist earlier
• Zynga also capitalized on the ongoing trends of Social media to mount its
games offering to provide an unprecedented customer utility
© 2012 Regalix Inc. Confidential, All Rights Reserved

Case Study - 4
• Introduction to PMS maps
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Khan Academy Story
• The Khan academy is a non-profit educational organization created in 2006 by
salman khan- A MIT & harvard business school alumni
• Free online collection of more than 3,300 micro lectures
– Think out loud video tutorials in mathematics, sciences, engineering &
medicine, economics, finance, arts, history, civics and even computer science
– Automated exercises with continuous assessment
– Content delivered offline in community colleges, charter schools and other schools
across US
– Providing a high quality education to anyone, anywhere
• Mission : to accelerate learning for students of all ages
• Khan academy has eclipsed mit’s open courseware ( OCW) in terms of videos viewed
– Its youtube channel has more than 172 million total views, compared to mit's 38 million.
– It also has twice as many subscribers, at more than 369,000
– Over 177 million lessons delivered till date
– Close to quarter billion dollars in donation
– Team size of just 20 people
– Amongst the 100 most influential people of the world
© 2012 Regalix Inc. Confidential, All Rights Reserved

Creating the blue ocean
Traditional Learning
Khanacademy
1) Khanacademy filled the gaps existing in
1) Industry divided into 2 segments traditional brick & mortar school learning
• Brick & mortar Learning – Schools/ Colleges • Videos & Exercises to be used as a teaching aid
and not replacement for teacher
• Online learning
• Use analytics and technology to figure out the
2) Learning is centered around students Strengths & weakness of students
3) The factors the industry was competing on: 2) Learning is centered around
• Student teacher ratio students, teachers and parents
• Class room Interaction
• Cost of learning / Education
• Interactive Learning 4) Everybody gets equal opportunity /
attention/ Learning
4) Smart kids get more attention than other kids
5) Unique Pedagogy -
5) Focused pedagogy – Teacher talks – Students listen • Stop, rewind, understand , then play, Solve
– Therefore Students learn problems and even teach others
6) Teachers Judge student’s strength / weakness 6) Analytics drive the understanding of each
students strengths & Weakness
© 2012 Regalix Inc. Confidential, All Rights Reserved

4 Actions Framework – Khan Academy
Eliminate Raise
• Quality of Learning
• Equality of Learning
• Need of classrooms for learning
• Simplicity in learning
• Boring teachers and lectures
• Progress & Tracking management
• Cost of education
•Sharing and mentoring
• Emotional Connect
Reduce Create
• Difficulty level /s in Learning • Enriched and vibrant class rooms
• Entry barriers for quality education ( for •Interactivity and fun while learning
students across the world) • More involvement from parents,
• Pedagogy based learning teachers & kids
© 2012 Regalix Inc. Confidential, All Rights Reserved

The Strategy Canvas- Khan Academy
High
Medium
Low
Cost of Teacher Learnin Involve Enriched
Relevance Scale
Classroo Learning Learning Student Simplici Emotiona
Learning/ student g ment Sharing Classroom
ms pedagogy Quality Tracking ty Levels l Appeal
Teaching ratio equality s
Traditional Education/ Schooling Industry KhanAcademy.org
Attributes of Industry & Competitors
© 2012 Regalix Inc. Confidential, All Rights Reserved

Khan Academy + Classroom learning = Blended learning
Regular students–
Audience Students
Teachers Parents
Change 1 Classroom teaching now done Forced the teachers to view Started re learning and
at home videos and exercises refreshing their concepts
Change 2 Pairing classmates with each Deep analytics and data to Understand their child’s
other facilitated easier learning understand the student strengths and talents better
learning behaviors and interests
Change 3 Classroom is enriched – with Equality of learning Understanding their
higher level discussions and aspirations better
problem solving
Change 4 Mentoring and coaching by More quality time with More quality time with
students – to students across students parents
the world – Empowered
learning
• Clubbed the best of both worlds – More constructive and enriched classroom based learning
• Teachers have more quality time with students
– Teacher provides more time to students who need them
– If a student gets stuck in a subject / topic – he / she is paired with other student - to facilitate easy
learning
• Students can coach and mentor other students ( to anyone -across the world)
• Parents really know what their kids are doing and what they are good at – with analytics
© 2012 Regalix Inc. Confidential, All Rights Reserved

Introduction to Pioneer, Migrator and Settler Maps
Blended Learning
Pioneer Khan Academy (Online + Classroom)
•Online teaching aids / Supplements
( Value Innovation) classroom teaching
Migrator Online Learning
( Value Improvement) (Online, mobile, ipad, Social)
Settlers Traditional brick &
mortar learning
( Value Imitation) (Schooling System)
Today Tomorrow
• Settlers are defined as me-too businesses, Migrators are business offerings better than most in the
marketplace, and a pioneers is the businesses that offer unprecedented value.
• Every thriving market place has high no of Settlers, moderate migrators and low / medium pioneers. The
classification is also directly proportional to the growth potentials
• This framework can be used to help a company align its internal product portfolios
– Today's market share is a reflection of how well a business has performed historically.
– Thereby help in determining which businesses experience the highest and lowest growth and cash flow.
– Clearly, what companies should be doing is shifting the balance of their future portfolio toward pioneers
– If current portfolio and the planned offerings consist mainly of settlers then the company has low growth trajectory
© 2012 Regalix Inc. Confidential, All Rights Reserved

Challenging the boundaries
© 2012 Regalix Inc. Confidential, All Rights Reserved

What did they do differently?
Private Jet
Convenience +
Looking beyond
Most profitable Marginal
the current
strategic group increase in cost
Industry
+ Fractional
NETJETS Ownership
Corporate and business
Private jet industry
class travelers
Looked at unique Leveraged the
Customized , No
Indochino.com Strategic groups
within the
Scope of
product/ Service
Hassles
affordable suit
industry offering
Reduced the consumer’s effort by eliminating
Audience who wanted a good
the need to choose store, Tailors, Customization
fitting suit at a nominal price
costs etc
© 2012 Regalix Inc. Confidential, All Rights Reserved

What did they do differently?
Looked
Looking Increased
Newer across time Gaming
Zynga beyond the
current
Buyer
scope of
product/
to leverage with
Groups social Friends
Industry games
networking
Made a Niche Looked at Non Buyer Made games Looked at the audience
Industry Groups more trends and
to a mass by eliminating their Social & Provided unprecedented
industry. pain points Educational value
Reduced
Improved
Functional Looked Empowere
the Newer
& across time d&
scope of Buyer
Khan Academy Product
Offerings
Groups
Increased
emotional
to leverage
trends
Enriched
classrooms
orientation
Eliminated the pain Expanded the • No frills service – just Looked at the
points in a horizon by click, play, watch, learn audience needs
conventional involving & practice utility and
system teachers & • Commitment to Used his learning
through a parents quality education – medium to blend
complementary increased emotional with Conventional
service offering appeal learning
© 2012 Regalix Inc. Confidential, All Rights Reserved

Summary of the webinar
• Blue ocean strategy is about creating value innovation to the
buyers
• Its about questioning and challenging the current industry
boundaries and breaking out of them
• We also learnt through case studies
– How a B2C industry was made into B2B Industry – Net Jets
– How a new niche industry was created by providing buyer utility and
convenience values - IndoChino.com
– How a Niche industry was made into a mass industry – Zynga
– How two industries could work together to create unprecedented
value & utility to the audience – Khan academy
© 2012 Regalix Inc. Confidential, All Rights Reserved

Blue Ocean Strategy Principles
Strategy Formulation Strategy Execution
Business Model Business Model Business Model
Search Risks Planning Risks Scale Risks
Risks Risks Risks
Strategic Business Management
6 Paths Approach Market Sizing Mobilization
Planning Model Risks
Getting the
Reconstruct Focus on Big Reach Beyond Overcoming Building
strategic
Market Picture – Not Existing Organization Execution
Sequence
Boundaries Numbers Demand al hurdles into Strategy
Right
•Sequence the
Use visualization to
•Alternative business Model to
plan beyond
Industries •Challenge capture newly
incremental Tipping Point
•Strategic groups Conventional created value
changes leadership to Execution
•Buyer Groups practices •Buyer Utility
•Visual Awakening Tackle through:
•Complementary •Consolidate Mapping
• Visual Exploitation • Cognitive hurdles Engagement
Product offerings demand by •Pricing & corridors
• Strategy Fair •Resource Hurdles •Explanation
•Functional focusing on Non of Masses
• Visual •Motivational •Clarity of
Emotional Customers • Cost Targets
Communication Hurdles expectations
Orientation • Three tiers of based on margins
• Pioneer, Migrator, • Political Hurdles
•Time Non Customers desired
Settler Map
• Potential
Adoption obstacles
To be Continued in next Webinar
© 2012 Regalix Inc. Confidential, All Rights Reserved

Questions ?
50
© 2012 Regalix Inc. Confidential, All Rights Reserved

Get in Touch
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 Regalix Labs feel free to get in touch with the speaker Pavan Kumar,
pavan@regalix-inc.com
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Board, 175+ Team
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B2C) rjosan@regalix-inc.com
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 Industry Recognition
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© 2012 Regalix Inc. Confidential, All Rights Reserved