Sunday, April 17, 2011

Blue Ocean Strategy (Chapter 3) Reconstruct Market Boundaries – Groupon HK, uBuyiBuy

In this chapter, we come across to reconstruct market boundaries to break from the competition and create blue oceans. We can create a blue print from red ocean market to blue ocean market. Professor W.Chan Kim indicates that six paths framework to remaking market boundaries. In order to break out the red oceans, these bosses should break out the accepted boundaries and look systematically across alternative industries, strategic groups, buyer groups, complementary product and service offerings, functional-emotional orientation of an industry and time. 

Path 1: Look across alternative industries

Danny Yeung, the CEO of He started his collective group purchase online business in 2010. He found the online group buying company Groupon is very famous in US. And there was a lacking in online group purchase company in Hong Kong. He collected the idea of Groupon and started a similar online company in Hong Kong. is the first online group purchase company in Hong Kong. Likewise, it is the only one company which is powered by Groupon and acting as a branch office in Hong Kong. This new selling method is sum up a group of buyers for a same product of service and purchase within a certain amount within 24 hours. The buyers can purchase online and download a voucher to gain the discount benefit in a particular outlet.

Path 2: Look across strategic groups within industries

We should look in depth of the strategic groups and determine the factors. Strategic groups are the factors within a group of similar industries. These factors could be the similar business models or similar combinations of strategies. In order to create a blue ocean, the manager should trade up or trade down some of the factors according to the customers’ decisions. For instance, the companies which become the suppliers of, they prefer to sell their voucher online with this new concept of collective buying and discount offering. Since the traditional voucher which is given through the magazine, leaflet, newspaper, news letter etc are not effective. High cost of producing leaflet and create a massive of rubbish. On the other hand, the online buyers can enjoy the discount voucher via with a time limit. The online buyers can visit the outlet and collective their discount product or service. As a result, it is an effective method of promotion with a high penetration rate towards the target customers. Moreover, the suppliers can collect the useful information from the target group via online platform.

Path 3: Look across the chain of buyers

In this path, the bosses should focus on buyers. Research and analysis the target customers and shift the production line towards another customer base. become the first group purchase online company in Hong Kong. A huge amount of restaurants, beauty products and hotels joined with selling method. However, there are around 30-50 similar group purchase online companies are existing in Hong Kong. Danny Yeung would like to shift this selling concept towards Asia Pacific countries such as China, Japan, Korea, Taiwan and Singapore. He chooses several major cities in every country for his new project. Thus there will be a lot of new online buyers in Asia Pacific countries can enjoy the discount voucher.

Path 4: Look across complementary product and service offerings

In this path, the bosses should think about what happens before, during and after the product is used. Find out the pain points in the whole process in the usage from the user. Then try to eliminate those pain points or find something to substitute those pain points. has a special gift button. It allows the buyers to purchase online and send the voucher towards their friend as a gift. The traditional way for someone to send a gift to his / her friend is to walk into the store. Now, the buyers can send an e voucher towards the end users. This kind of gift purchasing method can save up time. It is easy to broadcast the gift and message via broadband service without facing each other. For someone who is living in long distance can send the e voucher in this way.

Path 5: Look across functional or emotional appeal to buyers

The bosses should consider the functional and emotional elements from the product or service to buyers. The functional products can be shifted to an emotional selling place. The service can be eliminated its emotional factors and increase its functional value. are selling functional e voucher online. They consider their target customers are young buyer. They hired MC Jin and Vaness Ng as the ambassadors. These two persons are teenage image icons and broadcasting the online selling message online through YouTube channel. Thus this can add the emotional feeling of online purchasing process than in other platform.

Danny Yeung also introduces a Shadow CEO recruiting program. The winner in this program can work in as a CEO for 5 days with the HK$30,000 pay package. Danny Yeung would like to publish his company and find someone who can add new ideas and value to his company for his new project. Normal recruit program is emotional process. The interviewer asks several questions toward the candidate. Danny Yeung organizes the recruiting program as a marketing tool to promote his brand. The candidates should go through a series of processes to get into the final. This kind of marketing method is similar to the Best Job in the world. Several press, editors, news reporter and radio reporter would like to broadcast this news within a very short of time to gain awareness.

Path 6: Look across time

The bosses should look for the demand in future. Then try to shape the business model and deliver the message, product or service towards a new market space. Three principles are critical to assessing trends across time. They must be decisive to your business they must be irreversible and they must have a clear trajectory. Danny Yeung seeks there the new group purchasing method can be used in Hong Kong. This new concept can be workable in online platform. They broadcast the company message with using digital platform such as YouTube, facebook, google adwords and sina weibo. Those are the common digital social network. As is an online company, they use the latest digital broadcast method to deliver their brand image. Live Interview on Bloomberg News!

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