Monday, April 25, 2011

Blue Oceans Strategy ( Chapter 4 ) Focus on the Big Picture, Not the Numbers – Microsoft Xbox 360 Kinect

In this chapter, Professor W.Chan Kim introduces how to align the strategic planning process to focus on the big picture. Then apply these ideas in drawing your company’s strategy canvas to arrive at a blue ocean strategy. Usually, the managers will start with the analysis of the company situation and the competiors’s market space. Then draw out the major target segment and outline a list of company goals and initiatives. Professor W. Chan Kim introduces the managers to focus on the big picture. In the previous chatper, we point out the strategic profile should include the possible factors . Compare those factors with the competiors and identify the investment for the future with the existing and new factors. Draw up a strategy canvas is to identifying the key factors between your business and your compeitors. 

Professor W.Chan Kim implicts the principle to unlock the creativity of a wide range of people, create a list of strategies which can be articulated with the blue ocean market space. The principles can be presented as four steps of visulaizing strategy.

1. Visual Awakening
2. Visual Exploration
3. Visual Strategy Fair
4. Visual Communication
Compare your business with your competitors
Explore 6 paths
Draw strategy canvas
Distribute your before and after strategic profiles
See where your strategy needs to change
Observe the distinctive advantages or alternative products and services
Get feedback on alternative strategy canvases from customers
Support only those projects and operational moves that allow your company to close the gaps

See which factors you should eliminate, create or change
Use feedback to build the best to be future strategy

Step 1: Visual Awakening

In this step, you should compare your buiness with your compeitors. Draw up all the key factors and compare with the rivals and identify the needs to change. Microsoft Xbox 360 started a project of natal in 2009. Since the remarkable successful outcome of Nitnetndo Wii, they reliazed that the video games market space would tend to a group of people without using controllers. The players would like to play video games with their family members with lots of motions. The project Natal is a controller – free gaming and entertainment experience. Microsoft invents a senor bar device which is called Kinect. This electronic device is similar to Nintendo Wii. The player can the video games without game controller, they run the games with the user interface and the spoken commands. This project is aimed at the idea of Nitendo Wii and PlayStion 3 Eye. They find out the players would like to play video games without controllers. Or the actual players are the controllers. The Microsoft Xbox 360 kinect is launched in last year November. 10 millions of Microsoft Xbox 360 kinect bundle package were sold from last year Novemeber 2010 to this year March 2011 throughout the world. 

Step 2: Visual Exploration

All the deptment managers should arrange a meeting to discus the factors are workable or not. Don’t outsource this estimation to a 3rd party. Carry out the 6 paths to reconstruct the red ocean into a blue ocean. Find out the distinctive advantages with the alternative factors. Then eliminate or add new ideas within your project. It usually can take up to 4 weeks.

Microsoft research the successful factors of Nitendo Wii. They sum up the possible factors which they can achieve are 3D motion capture, facial recognition and voice recognition. Based on those new factors, the engineers invent the new Kinect sensor bar which is more powerful than the rivals and it can achieve those factors towards the customers.
Step 3: Visual Strategy Fair

In this step, the managers should sum up all the feedbacks from the alternative proudcts and services. Evaulate the insight of the factors from the rivals and create your future strategy.
The Kinect testing protocol was explored to all the game show throughout the world. All the video games players would like to test this new intruement in the game shows. They also arrange Kinect demonstraions in large shopping malls. Microsoft arrange the press conference, presentations and exhibitions. The Kinect display show and teenage models demontrations to explore this new technology. Microsoft invested US$500 million to the marketing campaign to reach new audiences with the title of You Are the Controller. Free video games consoles and free games testing in all kinds of adverstising activitates. They aim to collect the data of purchasing power and buyer’s behavior in all the major cities. This stage is concentrating on research and analysis among the buyers for the new product or service. 

Step 4: Visual Communication

In this stage, all the result and feedback are collected from the previous stage. This informaiton is needed to sum up and broadcast towards the employees. All the employess should fully undstand the buyer’s behavior and close the gaps and errors in the design, production and advertisment. This is the final stage to reach the blue ocean. 


In the end of this chapter, Professor W.Chan Kim introduces a PMS map ( Pioneer – Migrator – Settler ). This map can helps the managers to search a clear path from red ocean to blue ocean. Plus this map can be used to predict and plan for the future growth of the business. This map can gives the managers a clear mind to push the value they offer customers to new frontiers. For the pioneers are the one who develop a new business which doesn’t exit in the market space before. They invent a blue ocean and a mass of customers are following. For instance, Nintendo Wii is a pioneer business which offers the customers to play video games in motion capture. The settlers are the one who would like to follow the pioneer similar factors and create a new blue ocean. For instance, Microsoft Xbox 360 natal project can be the settler in that stage. The migrators are the one who draw up the strategies lie between the pioneer and the settlers. The business lies between the red ocean and blue ocean market space. Sony PlayStation 3 Eye is a good example of migrators. 

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