ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING

Transcription

1 Mestrado em Engenharia de Redes de Comunicações MSc in Communication Networks Engineering ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING Estratégias de Negócio 2 - Business Strategies 2 ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING 1

2 The Blue Ocean Strategy ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING 2

3 Getting the Strategic Sequence Right 1. Testing for Exceptional Utility Purchase Delivery Use Supplements Maintenance Disposal In which stage are the biggest blocks to customer productivity? In which stage are the biggest blocks to simplicity? In which stage are the biggest blocks to convenience? In which stage are the biggest blocks to reducing risks? In which stage are the biggest blocks to fun & image? In which stage are the biggest blocks to environmental friendliness? INSEAD Blue Ocean Strategy Institute 2010

4 Getting the Strategic Sequence Right 2. From Exceptional Utility to Strategic Pricing Step 1. Identify the price corridor of the target mass Three alternative product/service types Same form Different form, Same function Different form, and function, same objective Size of circle is proportional to number of buyers that product/service attracts INSEAD Blue Ocean Strategy Institute 2010

5 Getting the Strategic Sequence Right 2. From Exceptional Utility to Strategic Pricing Step 1. Identify the price corridor of the target mass Three alternative product/service types Same Form Different form, Same function Different form, and function, same objective Step 2. Specify a level within the price corridor High degree of legal and Upper level pricing resource protection Difficult to imitate Size of circle is proportional to number of buyers that product/service attracts INSEAD Blue Ocean Strategy Institute 2010

6 Getting the Strategic Sequence Right 2. From Exceptional Utility to Strategic Pricing Step 1. Identify the price corridor of the target mass Three alternative product/service types Same form Different form, Same function Different form, and function, same objective Step 2. Specify a level within the price corridor High degree of legal and Upper level pricing resource protection Difficult to imitate Mid level pricing Some degree of legal and resource protection Size of circle is proportional to number of buyers that product/service attracts INSEAD Blue Ocean Strategy Institute 2010

7 Getting the Strategic Sequence Right 2. From Exceptional Utility to Strategic Pricing Step 1. Identify the price corridor of the target mass Three alternative product/service types Same form Different form, Same function Different form, and function, same objective Step 2. Specify a level within the price corridor High degree of legal and Upper level pricing resource protection Difficult to imitate Mid level pricing Some degree of legal and resource protection Low level pricing Low degree of legal and resource protection Size of circle is proportional to number of buyers that product/service attracts Easy to imitate INSEAD Blue Ocean Strategy Institute 2010

8 Getting the Strategic Sequence Right 3. From Strategic Pricing to Target Costing In addition to cost reductions through building a strategic profile that has not only divergence but also focus, a blue ocean strategic move achieves target costing by: INSEAD Blue Ocean Strategy Institute 2010

9 Getting the Strategic Sequence Right 3. From Strategic Pricing to Target Costing In addition to cost reductions through building a strategic profile that has not only divergence but also focus, a blue ocean strategic move achieves target costing by: Streamlining operations and introducing cost innovations from manufacturing to distribution, e.g. Ford Model T INSEAD Blue Ocean Strategy Institute 2010

10 Getting the Strategic Sequence Right 3. From Strategic Pricing to Target Costing In addition to cost reductions through building a strategic profile that has not only divergence but also focus, a blue ocean strategic move achieves target costing by: Streamlining operations and introducing cost innovations from manufacturing to distribution, e.g. Ford Model T Partnering, e.g. IKEA INSEAD Blue Ocean Strategy Institute 2010

11 Getting the Strategic Sequence Right 3. From Strategic Pricing to Target Costing In addition to cost reductions through building a strategic profile that has not only divergence but also focus, a blue ocean strategic move achieves target costing by: Streamlining operations and introducing cost innovations from manufacturing to distribution, e.g. Ford Model T Partnering, e.g. IKEA Changing the price model of the industry, e.g. Blockbuster Video (from selling to renting) INSEAD Blue Ocean Strategy Institute 2010

12 Getting the Strategic Sequence Right 4. From Utility, Price, Cost to Adoption Educate the three most important groups of stakeholders before plowing forward and investing in the new idea. INSEAD Blue Ocean Strategy Institute 2010

13 Getting the Strategic Sequence Right 4. From Utility, Price, Cost to Adoption Educate the three most important groups of stakeholders before plowing forward and investing in the new idea. Employees INSEAD Blue Ocean Strategy Institute 2010

14 Getting the Strategic Sequence Right 4. From Utility, Price, Cost to Adoption Educate the three most important groups of stakeholders before plowing forward and investing in the new idea. Employees Business Partners INSEAD Blue Ocean Strategy Institute 2010

15 Getting the Strategic Sequence Right 4. From Utility, Price, Cost to Adoption Educate the three most important groups of stakeholders before plowing forward and investing in the new idea. Employees Business Partners The General Public INSEAD Blue Ocean Strategy Institute 2010

16 Six paths to blue ocean strategy Industry From Competing Within Strategic group Buyer group Scope of product or service offering Functional emotional orientation of an industry Time To Creating Across The six conventional boundaries of competition Kim & Mauborgne

17 Four actions framework Reduce Which factors should be reduced well below the industry s standard? Eliminate Which of factors that the industry takes for granted should be eliminated? A New Value Curve Create Which factors should be created that the industry has never offered? Raise Which factors should be raised well above the industry s standard? Kim & Mauborgne

18 What has Apple done in the last decade?

19 Financial Performance Profitability!!30.0%!!!25.0%!!!20.0%!! Revenue"Size"!15.0%!!!10.0%!!!5.0%!!!0.0%!!!(5.0%)!!!(10.0%)!!!(15.0%)!!!(20.0%)!! 1995! 1996! 1997! 1998! 1999! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012!

20 Financial Performance Profitability!!30.0%!! Market"cap"(US!$!million)! "281,963.0""!25.0%!!!20.0%!! Revenue"Size"!15.0%!! "177,766.8""!10.0%!!!5.0%!! "143,323.7""!0.0%!!!(5.0%)!!!(10.0%)!! "72,900.8"" "60,342.2"" "91,827.0""!(15.0%)!! "25,201.0"" "2,769.6"""2,013.4"" "5,387.4"""16,077.9"" "4,849.3"""7,386.2"""5,096.2"""7,141.3""!(20.0%)!! 1995! 1996! 1997! 1998! 1999! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012!

21 Financial Performance Profitability!!30.0%!! Market"cap"(US!$!million)! "281,963.0""!25.0%!!!20.0%!! Revenue"Size"!15.0%!! "177,766.8""!10.0%!!!5.0%!! "143,323.7""!0.0%!!!(5.0%)!!!(10.0%)!! "72,900.8"" "60,342.2"" "91,827.0""!(15.0%)!! "25,201.0"" "2,769.6"""2,013.4"" "5,387.4"""16,077.9"" "4,849.3"""7,386.2"""5,096.2"""7,141.3""!(20.0%)!! 1995! 1996! 1997! 1998! 1999! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! Jobs! returned! imac! ipod!&! itunes! itunes! Music!Store! iphone! App!Store! ipad!

22 ipod+ itunes SOFTWARE (2001) Reconstruction of the Digital Music (mp3) Player Industry

23 Digital Music (mp3) Players in the late 1990s Target customers Technologically literate teens and twentyyear olds, MP3 file traders Flash MP3 Player OR" Hard Drive MP3 Player " " Inexpensive ($100-$200) Small size Small storage (1 CD songs) Expensive ($300-$800) Bulky size Big storage (up to 5,000 songs) Poor navigation system

24 ipod! Targeted noncustomers: the over 34-year-olds! Great capacity of hard drive players (5GB=1,000 songs)! Portability and ease of use of flash memory! Simplified user interface with one wheel & four buttons! itunes software application! Simple to use software to transfer music from CD to player! Automatic & fast synchronization with ipod! Automatic battery charge from the computer! Easy to manage digital music collection! Fun to use! Sleek design unlike conventional electronic devices! Priced at $399 1,000 songs in your pocket

25 Strategy Canvas of ipod + itunes Software High ipod + itunes s/w Offering Level Flash Memory MP3 Players Low Hard Drive MP3 Players Price Player Size Storage Capacity Ease of Use Ease of Navigation Ease of Music Transfer & Organization Fun Fashion

26 itunes MUSIC STORE (2003) Reconstruction of the Digital Music Retailing Industry

27 itunes music store Apple s blue ocean strategic thinking:! Instead of trading up/down between the subscription-based music service and the free file-sharing network, Apple looked across these two strategic groups.! Apple saw untapped demand for legal channels of digital music with a wide selection at a price that appeals to the mass of potential buyers. Eliminate Piracy concern Complex pricing method Reduce Restrictions in using purchased music Raise Music quality Music selection Simplicity & Ease of use Create Pay per song 30 seconds free sampling Automatic sync with itunes (easy file management & transfer to a mp3 player)

28 Strategy Canvas of the itunes Music Store Eliminate Reduce Raise Create High itunes Music Store Offering Level P2P Networks Subscription-based Music Services Low Piracy Concern Complex Pricing Method Restrictions in Use Music Quality Music Selection Simplicity & Ease of Use Pay per Song Free Sampling Automatic Sync with itunes

29 RESULTS US $ billion 90! 80! 70! 60! 50! 40! 30! 20! 10! 0! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! ipod! Other!music!related!products!and!services! Apple's!total!revenue! By 2010, Apple has sold more than 297 million ipods and maintained over 70% global market share. More than 10 billion songs, 450 million TV episodes, 100 million movies, and 35 million books have been purchased and downloaded from the itunes Music Store by over 160 million account holders in 23 countries.

30 iphone (2007) & APP STORE (2008) Reconstruction of the Mobile Phone Industry

31 The Mobile Phone Industry in the Early 2000s! Handset makers! Engaged in R&D arms race to make more technologically innovative, valueadded handsets.! Focused on selling more units of hardware (handsets). The more add-ons were equipped, the more expensive mobile was.! Two strategic groups: Feature phone OR Smartphone! Carriers! Faced downward pressure on prices, slimmer margins on voice calls.! Dictated to handset makers what to build, how to build, and at what cost.! Market was flooded with me-too handsets and services

32 iphone Eliminate Raise Variety of models Mobile internet Style & Entertainment Ease of use & Simplicity Reduce Number of physical buttons Embedded business applications PC-like performance (through higher operating system) Create Freedom to customize through App Store (from 2008) The Internet in Your Pocket

33 Strategy Canvas of iphone High Eliminate Reduce Raise Create iphone Offering Level Feature Phones Low Smartphones Price Variety of Models Number of Physical Buttons PC-like Business Performance Applications Mobile Internet Style & Fun Ease of Use Customization via App Store (from 2008)

34 App Store (2008)! Customize the iphone the way the user wants! Application programs developed by Apple and third-party developers.! 20 categories ranging from Games & Entertainment to Books & Education.! Easy and convenient to purchase, download, and synchronize with iphone on one Apple ID.! Price! Free Apps: 25% of applications were free of charge.! Low price: More than 25% of applications cost $0.99.! The average price of an application was $3.21.! Win-win proposition! Apple got 30% from the sales of apps (70% for developers).! App Store boosted sales of the iphone by up to 15%. Apple generated revenues continuously through app sales from the increased iphone users.

35 RESULTS US $ billion 70! 60! 50! 40! 30! 20! 10! 0! 2007! 2008! 2009! 2010! Total!net!sales! iphone!and!related!products!and!services! By 2010, Apple has 51% of the profits of the global mobile phone industry, with just 22% share of revenue and only 4% market share (units sold). By 2011, over 100 millions iphones were sold worldwide. App Store hit 10 billion downloads from over 300,000 apps available.

36 ipad (2010) Reconstruction of the Personal Computer Industry

37 The Personal Computer Industry in the late 2000s! Low PC sales growth! Global competition! Commoditization of PC: R&D arms race & price war! Segmentation strategy! Netbook: Low-end laptop! Threats from substitutes: smartphones

38 ipad Apple s blue ocean strategic thinking:! Instead of further segmenting within the PC industry, can we create a third category that is neither PC nor Smartphone?! Instead of offering high-valued laptops or lower-valued netbooks, can we make a new product that provides breakthroughs in value for PC users?

39 ipad Apple s blue ocean strategic thinking:! Instead of further segmenting within the PC industry, can we create a third category that is neither PC nor Smartphone?! Instead of offering high-valued laptops or lower-valued netbooks, can we make a new product that provides breakthroughs in value for PC users? Eliminate Hardware features Raise Ease of viewing Ease of use, intuitive navigation Portability Non-PC functions (e.g. handheld gaming, e-book reader) Reduce Technical specs (e.g. speed, storage capacity, memory) Functions (using embedded software applications) Create Style & Fun Hardware add-ons (e.g. SD card reader, physical keyboard) Customization through App store

40 Strategy Canvas of ipad High Eliminate Reduce Raise Create Smartphone ipad Offering Level Netbook Low Standard PC Price Hardware Feature Technical Specs Functions Ease of Viewing Ease of Use & Intuitive Navigation Portability Non-PC functions (e.g. Phone & Handheld Gaming) Style & Fun Hardware Add-ons Customization via App Store

41 ibook Store (2010)! Read e-books through ibooks apps! Own the collection of ebooks in ibooks! Read in color with full audio, video support! Turn pages by tapping the display, adjust brightness, font and its size; bookmark pages; find vocabulary in the dictionary! A new market space for itunes! Partner with established book publishers, individual publishers & authors! Easy and convenient to purchase, download, and synchronize with ipad! Compelling buyer value! Easy and simple to browse, purchase, download, and manage ebooks! Free sample before purchasing a book! Free books! Priced the same as in other ebook stores (e.g. Amazon) and paper version! Milestones (as of Feb.2011)! 100 million ebooks were downloaded via itunes ibook store! 2500 publishers in its store! Apple had more than 200 million Apple ID accounts

42 The Reinforcing Blue Oceans of Apple MP3"player" industry" ipod"

43 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" itunes!! Music! TV! movie! ipod"

44 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! ipod"

45 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! App!! Store! ipod"

46 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! App!! Store! ipod" Personal"Computer" industry" ipad"

47 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! App!! Store! ipod" ibook!! Store! Personal"Computer" industry" ipad"

48 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! App!! Store! ipod" ibook!! Store! Personal"Computer" industry" ipad"

49 The Reinforcing Blue Oceans of Apple MP3"player" industry" Music" industry" TV! movie! iphone" Mobile"phone" industry" itunes!! Music! App!! Store! ipod" ibook!! Store! Personal"Computer" industry" ipad"

50 Apple s Portfolio of Businesses on the PMS Map Pioneer ipod itunes Store itunes Store iphone App Store App Store iphone itunes Store ipad imac Apple Store Apple Store Apple Store Migrator Macintosh Macintosh ipod Macintosh ipod Macintosh Settler Unnamed circles represent Apple s computer peripherals, ancillary hardware, software and services.

51 Apple s Historical Net Sales by Product (US$ billion) 120! 100! ipad!and!related!products!and! services! 80! 60! iphone!and!related!products! and!services! Other!music!related!products! and!services! ipod! 40! SoQware,!service,!others!sales! Peripherals!and!other! hardware! 20! Total!Macintosh!net!sales! 0! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011!

52 ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING 52

53 References and Readings Websites: Documents: W. Kim, R. Mauborgne, The Blue Ocean Strategy, Harvard Business School Press, 2005 ENGENHARIA DE SERVIÇOS SERVICES ENGINEERING 53