Blue Ocean Strategy: From Theory to Practice SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Blue Ocean Strategy: From Theory to Practice
The market universe is composed of two types of oceans: red oceans and blue oceans. Red oceans are all the industries in existence today; they are increasingly characterized by intense competition. Blue oceans are all the industries not in existence today; they are untouched and uncontested. To prosper in the future, companies need to go beyond competing; they need to create blue oceans. The issue is how to do so. Presents a set of analytical tools and frameworks that can enable firms to develop blue ocean strategies.
Swot Analysis of "Blue Ocean Strategy: From Theory to Practice" written by W. Chan Kim, Renee A. Mauborgne includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oceans Blue facing as an external strategic factors. Some of the topics covered in Blue Ocean Strategy: From Theory to Practice case study are - Strategic Management Strategies, Competition, Competitive strategy, Customers, Decision making, Market research and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Blue Ocean Strategy: From Theory to Practice casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, wage bills are increasing, increasing commodity prices, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Blue Ocean Strategy: From Theory to Practice
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Blue Ocean Strategy: From Theory to Practice case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oceans Blue, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oceans Blue operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Blue Ocean Strategy: From Theory to Practice can be done for the following purposes –
1. Strategic planning using facts provided in Blue Ocean Strategy: From Theory to Practice case study
2. Improving business portfolio management of Oceans Blue
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oceans Blue
Strengths Blue Ocean Strategy: From Theory to Practice | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oceans Blue in Blue Ocean Strategy: From Theory to Practice Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Oceans Blue is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Oceans Blue in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Oceans Blue is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Oceans Blue are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Blue Ocean Strategy: From Theory to Practice Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Oceans Blue is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by W. Chan Kim, Renee A. Mauborgne can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Oceans Blue in the sector have low bargaining power. Blue Ocean Strategy: From Theory to Practice has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oceans Blue to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Oceans Blue has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Blue Ocean Strategy: From Theory to Practice Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Oceans Blue has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Oceans Blue digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oceans Blue has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Oceans Blue is one of the most innovative firm in sector. Manager in Blue Ocean Strategy: From Theory to Practice Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Oceans Blue has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Blue Ocean Strategy: From Theory to Practice HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Oceans Blue has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oceans Blue has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Blue Ocean Strategy: From Theory to Practice | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Blue Ocean Strategy: From Theory to Practice are -
Slow to strategic competitive environment developments
– As Blue Ocean Strategy: From Theory to Practice HBR case study mentions - Oceans Blue takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Blue Ocean Strategy: From Theory to Practice, it seems that the employees of Oceans Blue don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Oceans Blue has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Blue Ocean Strategy: From Theory to Practice should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Oceans Blue products
– To increase the profitability and margins on the products, Oceans Blue needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Oceans Blue has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the segment, Oceans Blue needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Blue Ocean Strategy: From Theory to Practice HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Oceans Blue has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Oceans Blue, firm in the HBR case study Blue Ocean Strategy: From Theory to Practice needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Blue Ocean Strategy: From Theory to Practice, in the dynamic environment Oceans Blue has struggled to respond to the nimble upstart competition. Oceans Blue has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Blue Ocean Strategy: From Theory to Practice has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Oceans Blue 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Blue Ocean Strategy: From Theory to Practice, is just above the industry average. Oceans Blue needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Blue Ocean Strategy: From Theory to Practice | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Blue Ocean Strategy: From Theory to Practice are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Oceans Blue can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Oceans Blue can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Oceans Blue can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Blue Ocean Strategy: From Theory to Practice suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oceans Blue can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Oceans Blue can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oceans Blue can use these opportunities to build new business models that can help the communities that Oceans Blue operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oceans Blue to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Oceans Blue to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oceans Blue can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Oceans Blue to increase its market reach. Oceans Blue will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Oceans Blue to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Oceans Blue can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Oceans Blue can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Oceans Blue has opened avenues for new revenue streams for the organization in the industry. This can help Oceans Blue to build a more holistic ecosystem as suggested in the Blue Ocean Strategy: From Theory to Practice case study. Oceans Blue can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Blue Ocean Strategy: From Theory to Practice External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Blue Ocean Strategy: From Theory to Practice are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Oceans Blue.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Oceans Blue business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Oceans Blue is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Oceans Blue can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Oceans Blue
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Oceans Blue.
Regulatory challenges
– Oceans Blue needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Oceans Blue needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Oceans Blue can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Oceans Blue in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oceans Blue can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Blue Ocean Strategy: From Theory to Practice .
Technology acceleration in Forth Industrial Revolution
– Oceans Blue has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Oceans Blue needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Oceans Blue needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Blue Ocean Strategy: From Theory to Practice Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Blue Ocean Strategy: From Theory to Practice needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Blue Ocean Strategy: From Theory to Practice is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Blue Ocean Strategy: From Theory to Practice is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Blue Ocean Strategy: From Theory to Practice is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Oceans Blue needs to make to build a sustainable competitive advantage.