How to Implement Blue Ocean Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of How to Implement Blue Ocean Strategy
The case entitled 'How to Implement Blue Ocean Strategy' challenges participants to apply key concepts of blue ocean strategy implementation to overcome key organizational and management hurdles while leading a strategic shift. The case lays out how Braynesbridge Industries (BI), a fictional conglomerate involved in the steel industry, recently launched a new strategy to break out of the red ocean of bloody competition in the industry. The new strategy, however, represented a significant departure from the status quo, which led to steep cognitive, resource, motivational, and political hurdles in the organization. Hence, to implement the new strategy, BI executives had to overcome these four key hurdles. Despite this challenge, the case reveals that BI's management team successfully implemented the strategy fast and at low cost using tipping point leadership and fair process. BI's Board of Directors, very impressed with the new strategy and its successful implementation, is curious to learn the principles of tipping point leadership and fair process and how these apply to organizations.
Authors :: W. Chan Kim, Renee Mauborgne, Katrina Ling
Swot Analysis of "How to Implement Blue Ocean Strategy" written by W. Chan Kim, Renee Mauborgne, Katrina Ling includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ocean Bi's facing as an external strategic factors. Some of the topics covered in How to Implement Blue Ocean Strategy case study are - Strategic Management Strategies, International business, Leadership, Motivating people, Psychology, Strategic planning, Strategy execution and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the How to Implement Blue Ocean Strategy casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of How to Implement Blue Ocean Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in How to Implement Blue Ocean Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ocean Bi's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ocean Bi's 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 How to Implement Blue Ocean Strategy can be done for the following purposes –
1. Strategic planning using facts provided in How to Implement Blue Ocean Strategy case study
2. Improving business portfolio management of Ocean Bi's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ocean Bi's
Strengths How to Implement Blue Ocean Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ocean Bi's in How to Implement Blue Ocean Strategy Harvard Business Review case study are -
Strong track record of project management
– Ocean Bi's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Ocean Bi's 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 How to Implement Blue Ocean Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– How to Implement Blue Ocean Strategy firm has clearly differentiated products in the market place. This has enabled Ocean Bi's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ocean Bi's to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ocean Bi's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ocean Bi's 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.
Diverse revenue streams
– Ocean Bi's is present in almost all the verticals within the industry. This has provided firm in How to Implement Blue Ocean Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Ocean Bi's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study How to Implement Blue Ocean Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Ocean Bi's 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 Ocean Bi's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Ocean Bi's 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.
Ability to recruit top talent
– Ocean Bi's is one of the leading recruiters in the industry. Managers in the How to Implement Blue Ocean Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Ocean Bi's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ocean Bi's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Ocean Bi's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ocean Bi's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Ocean Bi's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ocean Bi's 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 How to Implement Blue Ocean Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of How to Implement Blue Ocean Strategy are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ocean Bi's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study How to Implement Blue Ocean Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study How to Implement Blue Ocean Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case How to Implement Blue Ocean Strategy can leverage the sales team experience to cultivate customer relationships as Ocean Bi's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Ocean Bi's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study How to Implement Blue Ocean Strategy, in the dynamic environment Ocean Bi's has struggled to respond to the nimble upstart competition. Ocean Bi's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Ocean Bi's 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.
Increasing silos among functional specialists
– The organizational structure of Ocean Bi's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ocean Bi's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ocean Bi's to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Ocean Bi's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Ocean Bi's 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 - How to Implement Blue Ocean Strategy should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study How to Implement Blue Ocean Strategy, it seems that the employees of Ocean Bi's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the How to Implement Blue Ocean Strategy 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 Ocean Bi's has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Ocean Bi's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ocean Bi's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities How to Implement Blue Ocean Strategy | 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 How to Implement Blue Ocean Strategy are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ocean Bi's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ocean Bi's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Ocean Bi's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Ocean Bi's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ocean Bi's in the consumer business. Now Ocean Bi's can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Ocean Bi's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ocean Bi's 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 Ocean Bi's to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Ocean Bi's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Buying journey improvements
– Ocean Bi's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. How to Implement Blue Ocean Strategy 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.
Better consumer reach
– The expansion of the 5G network will help Ocean Bi's to increase its market reach. Ocean Bi's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ocean Bi's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, How to Implement Blue Ocean Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Ocean Bi's has opened avenues for new revenue streams for the organization in the industry. This can help Ocean Bi's to build a more holistic ecosystem as suggested in the How to Implement Blue Ocean Strategy case study. Ocean Bi's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Ocean Bi's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats How to Implement Blue Ocean Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study How to Implement Blue Ocean Strategy are -
Stagnating economy with rate increase
– Ocean Bi's 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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ocean Bi's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Ocean Bi's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ocean Bi's 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 How to Implement Blue Ocean Strategy .
High dependence on third party suppliers
– Ocean Bi's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Ocean Bi's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ocean Bi's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Consumer confidence and its impact on Ocean Bi's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ocean Bi's in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Ocean Bi's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Ocean Bi's
– 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 Ocean Bi's.
Shortening product life cycle
– it is one of the major threat that Ocean Bi's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Ocean Bi's 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 Leadership & Managing People industry regulations.
Weighted SWOT Analysis of How to Implement Blue Ocean Strategy 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 How to Implement Blue Ocean Strategy 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 How to Implement Blue Ocean Strategy 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 How to Implement Blue Ocean Strategy 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 How to Implement Blue Ocean Strategy 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 Ocean Bi's needs to make to build a sustainable competitive advantage.
