The canvas model
The canvas model refers to an ideal business model which is comprised of 9 major items, which touch on different aspects of business (Wirtz, 2010). The firsts aspect here, as pointed out by Wirtz (2010) are key partnerships. These refer to alliances that an enterprise creates to help in its normal operations. At Blue Buddies, the manufacturing of most accessories is outsourced, meaning that the manufacturing firms in the Far East come up as the key partners. The second aspect is the customer segments. The segments refer to the different categories of customers that a company targets . At Blue Buddies, customer segmentation is done, taking into consideration aspects such as demographics, personality, and behavior.
The third aspect of the canvas model is the value proposition. This involves the analysis of what each customer segment needs and structuring the company to provide products that satisfies the needs of each segment . Channels are other key aspects in the canvas model, and these include the lines of communication, distribution, and sales that a company employs in order to cater for the needs of the different customers . The canvas model also touches on the key resources of a company. These are the inputs that are required for a company to continue with its everyday operations . The resources can be human, physical, intellectual, or financial resources. Another aspect of the model is the structuring of customer relationships . At Blue Buddies, for instance, customer relationships define how each of the customer segments is treated.
Another essential aspect in the canvas model touches on a company’s key activities. These refer to the activities which are vital for business functioning . At Blue Buddies, the key activities include the production and distribution of games and gaming consoles. Revenue streams represent the other building block in the canvas model. The streams Describe how the business makes money . Blue Buddies, for instance, make money through one-time sales. The final aspect of the canvas model is the cost structure. This refers to the policy that a company uses to price its products . This is determined by the different aspects of the adopted business model.
The value curve
The value curve at Blue Buddies is informed by the different customer segments the company serves. The different customers have different needs, meaning that the company needs to be prudent to ensure that the needs of each segment are covered.
The following graph represents the value curve of the company, highlighting the important aspects of Blue Buddies products.
Graph 1: value curve
Segmentation of customers by personality sees the realization of a customer segment where parents view providing their children with game consoles as a way of monitoring how they spend their time. This customer segment informs the emphasis the company places on energy efficiency in creating the value curve.
Another customer segment of shoppers aged between 6 and 21, inform the company to place value on price, the level of sophistication of the consoles and avenues to play online. In addition, the shoppers aged between 22 and 35 place more emphasis on having great quality gaming experiences with many multimedia add-ons. Price, to them, is not such a sensitive issue. The shoppers above the age of 36 also place less emphasis on price, but highly value high graphic and audio sophistication. As shown in the value curve, Blue Buddies takes into consideration all the needs of the different customer segments. This is built on the realization that shopping behavior is related to age .
The four action steps framework
In accordance with the provisions of the blue ocean strategy, Blue Buddies needs to come up with a strategy that ensures that the company operates at a higher level compared to the competition. Key to the realization of the blue ocean strategy is the adoption of a new value curve .
Figure 1: Four Action Steps Framework
New added values are formulated through the process of eliminating the factors that are taken for granted; raising the factors that a below the industry standard, creating new factors never offered before and reducing certain factors that are above the industry’s standard.
Reduce
A key factor to be reduced is that of price. Price is a sensitive aspect among the company’s major market segments. Most of the customers view gaming as an essential aspect in their relaxation. Most desire to have an improved gaming experience, where aspects such as of game complexity, visual definition, realism and sound quality are improved. They, however, require the availability of more affordable gaming consoles.
Blue Buddies, therefore, needs to find a balance between the enhancement of the console’s performance, according to the targeted customer segment’s preferences and the cost aspect. The company needs to ensure that the changing customer preferences are effectively dealt with over time, at a controlled budget. Evolving with the customer needs is one of the factors that ensure that a company remains successful over a long period . Through its marketing activities, Blue Buddies can ensure that customers are able to get gaming consoles at cheaper prices. To this end, the company can invest in cheaper gaming consoles of a higher quality but at a cheaper price. Strategic partnerships with key stakeholders could be instrumental to the reduction of the prices.
Eliminate
A factor that needs to be eliminated is the offering of uniform gaming content for customers in different cultures. A business needs to be structured in such a way where the culture preferences are taken into consideration when designing products (2345678). As shown in the decision to expand into Starland, it is necessary to take into consideration different cultures, the economic condition, marketing strategies, and distribution when designing the gaming content.
Raise
A factor that needs to be raised touches on the quality of the channels used to reach the target group. To this end, Blue Buddies uses specialized electronics stores and video game chains. These platforms offer an opportunity for the company to have a face-to-face interaction with the customer, which makes communication and the development of interpersonal relationships easier. The limitation of such channels is the fact that it is difficult to attract more customers . Most players in the gaming industry employ direct channels in marketing their products. Tools such as television, the internet and billboards are used. Blue Budies needs to come up with indirect marketing means, which are optimized to ensure that the right customers are reached via the right channels . The focus will especially be on non-customers.
There are different categories of non-customers available for Blue Buddies. First are the female players, who are interested in products specially designed for the female audience. This category can be reached through social media, especially Facebook and Instagram, since more women use these platforms . The other category of non-customers is adults with limited time to use in social media. This group can be reached via platforms such as Linkedln where most business minded adults are found . Given that such adults are not even aware of the company’s products, they can be informed and then given free time-limited trials.
Create
There are some avenues through which the company can create value through creation. First is the aspect of innovation, where the company invests in developing new controllers with both buttons and touch screen capabilities. In addition, the company can invest in adding new devices like cyber glasses for virtual gaming experiences. Another avenue to create is the development of long term relationship with the suppliers and distributors. These agreements can be structured in such a way that both the company and the partners share the benefits from the business. Strategic alliances are a key component in ensuring that companies generate more revenue, achieve more growth and are insured in regards to risk .
Conclusion
The blue ocean strategy simulation has proven to be instrumental in indicating the opportunities available for Blue Buddies to perform better in the gaming industry. First, the adoption of the canvas model points at the major aspects that the company needs to emphasize on in regards to business operations. Some of the essential aspects here include establishment of key partnerships, being prudent in customer segmentation and establishment of key activities the company should be engaged in. This simulation also led to the development of a value curve at Blue Buddies. According to the curve, management needs to focus on particular aspects that will ensure that the company gains a competitive advantage over other players in the market. These include the manufacturing of energy efficient devices, improving the sophistication of game consoles, and further investment in multimedia options and add ons. A four action steps framework was also formulated, with the goal of further showing how competitive advantage can be gained. According to the framework, the price of the company products needs to be reduced, while the act of offering same product for different cultures eliminated. Besides, the quality of channels used to reach customers needs to be raised while the company invests in the creation of new strategic relationships and new devices to add to the company’s portfolio.
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