Singapore Entrepreneur - Blue Ocean Strategy

I particularly like the definition of this strategy which is described by W.Chan Kim and Renee Mauborgne, Professors in strategy and international management at the INSEAD business school. http://www.blueoceanstrategy.com

Continuous competition in a market will lead to price war and oversupply of commoditized products. Brand loyalty will start to decline and profits start shrinking, ending in a bloodbath which is termed as Red Ocean.

The Blue Ocean is a market space which is untested and uncontested. Players trapped in the Red Ocean should seek a path to exit towards the Blue Ocean.

There are four principles in the Blue Ocean strategy:

1. Reconstruct market boundaries
This is to look out for spaces where current competition does not see. You may still be in the same trade, but if you manage to create a new need for people, You will see demand naturally increase. Take the example of the Japanese hairdresser franchise QB House. In the haircut industry, there are different level target markets. Budget conscious men would go for an economical haircut at the barber. More image conscious individuals would go for average class saloon. Other individuals would not even blink an eye on the high price they pay at an upclass hair saloon. QB House ingeniously created a haircut service which fuses between barber and hair saloon. It created a concept with the budget conscious individuals in mind, to provide a hair saloon quality hairstyle at a barbershop price. It revolutionize the idea of haircut and create a new need, thus found itself in the midst of the Blue Ocean where there is no existing similar provider. Although over time, it may see more copycats coming into the sector, it is important to have the first mover advantage. When it sees its Blue Ocean slowly becoming red over time, it must then seek again for the next Blue Ocean. This is what we term as constant Innovation.

2. Focus on the big picture, not the numbers:
The lifeline of a business is always its bottom line revenue and profits. However, business owners must not be led by the nose in its budget. They have to look beyond the current scenario and paint a bigger picture for the business. This usually involves time and more investments into uncharted areas and most people easily shrug off such ideas.

3. Reach beyond existing demand:
Tata Group launched the world's cheapest car, Nano, on 26 Feb 2009, just one year after acquiring two luxurious automobile brands, Jaguar and Land Rover from Ford Motors at a price tag of US$2.3 Billion. The acquisition allows Tata an immediate access to the premium market of the automobile industry. However, it was not sitting still. It had been eyeing on the untapped middle class families in India, typically seen riding precariously on two wheelers, with children. With more than 100 million of such families in India alone, pricing the Nano at a mere US$2200, it is a sure hit in this sector.

Another great revolutionary product is the Wii TV console game player, launched by Nintendo. For many years, Nintendo has been in a distant far in the lucrative game console market, from Sony's PlayStation and Microsoft's XBox. Nintendo tweaked the idea on gaming by simplifying its console that could entice both young and old in the family to play.

4. Get the strategic sequence right:
In all aspects when seeking for the Blue Ocean, you must be pragmatic. You may be just building castles in the air if certain principles are not adhered to.
- Buyer utility: Is there an exceptional buyer utility in your business idea?
- Price: Is your price practical in the market? You have to ask yourself why your customer would want to pay you that amount you have defined for your product. Existing competitors and substitutes must be also be compared with.
- Cost: Is your cost of production able to meet the expected profit margin?
- Adoption: Why would people want to adopt your new idea? Humans tend to have the comfort-zone intuition. It is not easy to persuade people to change their habits to adopt a new style. This may be the biggest hurdle amongst the four. Awareness and education may be necessary to assure customers.

Singapore Entrepreneur - Money Creation and Destruction

From the video below you will start realizing that virtual money is being created to feed the world. It's rather scary. If the system falls apart, we will all face another D day.

Watch here

Singapore Entrepreneur - Aliens or Hearthrobs??

Former French TV heart-throbs look unrecognisable on the red carpet after too much plastic surgery




Look at them in their younger days in the 80's...





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Singapore Entrepreneur - Hottest February in Singapore - El Nino Effect or Global Warming?

The mercury has hit 35.2 Degree Celsius! It has been a sweltering hot hot February in Singapore! I couldn't help the environment with the extra carbon footprints I have been contributing from the full blast aircon as soon as I return to my car in the midst of the midday sun. Same when I get back home each evening in a sweat soaked shirt. I would conveniently press the air-con button control to my room.

I would then start reading news articles about the hottest and driest February and El Nino effect in this region in this couple of months. I read news about droughts in several parts of South East Asia and southern China, bush fires affecting the air quality in certain countries. I shudder the thought of global warming. I start to recall the recent climate summit held in Copenhagen. Attended by leaders of 170 countries, no agreement nor conclusions were drawn in the 13 days' meeting. The main reasons for the failure are attributed to different levels of economic development and wealth amongst nations. Even the fear of a world of apocalypse caused by global warming could not instill the urgency amongst the members to compromise and agree to a concerted reduction of carbon emission.

I just wonder if they have chosen the right location and period of the summit, in the first place. Copenhagen, being near the Arctic Circles, has got the coldest weather all year round, not to mention that the summit was held in the winter December, where temperature is at freezing point. How could you imagine what is global warming and ice caps melting when you are freezing under your thick fleece jacket.

I suggest they hold the next summit in our region, right in Singapore, 1 Degree North of Equator. Invite them to our driest, hottest February peppered with some El Nino effect. Hold it at the Siloso beach at 12pm and let them enjoy our tropical sun. Hold it every year in the same month and let them feel the heat each time the mercury hits the next record level. Without the need to say further, I reckon all parties will just sign the agreement unanimously. Let these temperate folks have a taste of what tropical people are facing on this planet.
Until any agreement signed to cool the earth, I will continue to find comfort in my aircon and please pardon me for creating more carbon footprints. I have no choice! I live in the tropics!

Singapore Entrepreneur - Guangzhou Trip

It was an eye opening trip this time. It was a well-deserved break for me. I met my good friend who was on a business trip in Guangzhou. He brought me around the city and we did some shopping. It is simply an amazing city. Although rather messy and traffic very chaotic, the city is bustling with life. Now I can comprehend what is meant by "strong domestic demand...despite the financial tsunami", often quoted to describe the 3rd largest economy in the world.

I took a public bus from Baiyun International Airport to the railway station downtown. I tried to flag a cab without much success after that. After a while, a man rode up to me in a 3-wheeled scooter. He offered to take me to my destination. Since I was totally unfamiliar with Guangzhou, I sought his help to locate the hotel. He took a while to verify where the hotel was. Then, he quoted me RMB25. I agreed without hesitation. It was about 5km from where we were. He took my large luggage and strapped it on a platform fitted to his scooter. Then here we went. The ride was both scary and exhilarating. We went through highway, back lanes, against traffic and illegal turns. At one point, the machine started choking along the highway. The uncle had to stop and check on the petrol tank. He shook the scooter a bit and checked on a few items. He then appeared to behave suspiciously, peering continuously left and right. I was still sitting. I started to get a little worried, wondering if there was any ulterior motive. Memories of people telling me that Guangzhou's crime rate is high started flashing in my mind. I thought he had accomplice and he deliberately stopped his scooter in the middle of a highway to mug me. Anyway, after less than 5 minutes, he managed to re-start his engine and we moved on again. It was a 20-min ride to my hotel and finally I arrived safe and sound. Phew! I asked him how much again and this time he said RMB30. I just gave him without question. I was just thankful I was safe. The ride was like a James Bond ride on a took took van in Thailand!