1.What is WebOrganic Blue Ocean Strategy? How does WebOrganic formulate and execute its Blue Ocean Strategy?’
3.What is WebOrganic’s expanded mission? How did this expanded mission help to strengthen its position as a Blue Ocean Player?
1. Blue ocean strategy avoids cut-throat competition of a Red Ocean by venturing into an untapped market free from rivals(Kim and Mauborgne 2017). In Hong Kong, the government announced a support program for internet learning with tenure of 5 years called “I Learn at Home” to enable the citizens to access and afford information technology .WebOrganic and Net-Com rock n’ roll were the service providers who won the bid of the government and thus WebOrganic ventured into a Blue Ocean with only one competitor. The organization served students in 10 districts of Hong Kong. WebOrganic provided computer equipments, computer training, advisory services and internet access which benefitted 522,000 students of Hong Kong and 85% families who did not have access to internet previously. The concept of Bottom of the Pyramid is also applied here (Chandrakala and Devaru 2013).
WebOrganic had suppliers like Lenovo Group, Intel Corp and Microsoft Corp so that best products like ThinkPad Notebooks could be provided in schools at half of the original price. Parents could pay for three years with annual installments. WebOrganic entered into a partnership with PCCW Ltd and CSL ltd for broadband services and mobile internet services respectively. WebOrganic’s annual package plan provided internet and computer services to customers at a cheaper at a cheaper rate than the competitors in marketplace. The bottom of pyramid in Hong Kong was the prime market for WebOrganic ( Agnihotri 2013).
WebOrganic aimed not to be an average commodity seller. In order to provide a holistic e-learning experience WebOrganic partnered with 11 social service organizations which enabled WebOrganic to provide support to students and parents of 14 service centers while Net-Com rock n’ roll provided services to eight service centers. WebOrganic was funded by companies like Google Inc. and Lenovo. WebOrganic served the needs of an untouched market-the poor and destitute. This strategy helped the organization to secure a competitive advantage in the marketplace and this social edge increased the bargaining power of WebOrganic over suppliers. It was hard for companies to locate the poor customer groups because these customer groups were not accessible through retail stores and direct selling. But WebOrganic enhanced the accessibility towards these groups of customers and also helped other organizations to access young group of customers who could be long-term users in the long run. For instance, WebOrganic helped Apple to access the education market with this strategy. WebOrganic also ensured that its vendors were able to make gross profit. Thus, the Blue Ocean strategy was formulated and executed well by WebOrganic (hbr.org 2017).
2. A Social Enterprise utilizes commercial strategies to enhance social impact, improve well-being of humans and environment by ensuring profits for external shareholders (Ridley-Duff and Bull 2015).
The market opportunities of the group of poor customers were leveraged by WebOrganic by making use of value-added services and technology (Gupta 2013). The government of HongKong facilitated the access of WebOrganic to a student market which was not accessible by most retailers. WebOrganic ensured that poor students did not buy outdated computers from second-hand stores which would have adverse psychological impact on students. WebOrganic was an e-learning activist and wanted to enhance the e-learning experience of schools. The organization developed 10 additional support centers, enriched its content support and designed a comprehensive program which facilitated one-to-one computing in classroom (hbr.org 2017).
WebOrganic established persuaded teachers of school to value e-learning. The organization provided tools of e-learning enhancement to 50 Seed Schools at a special offer by leveraging relationships with infrastructure partners. These schools received a holistic support for implementation of e-learning starting from cloud computing to broadband support. Huang also enhanced value for students and teachers by introducing Apple’s iPad as a learning tool. WebOrganic co-developed Tree School Program with Apple to implement one-to-one computing in classroom; WebOrganic partnered with textbook publishers of HongKong-The Commercial Press, Pearson Education and Oxford University Press and created virtual bookstores for students which addressed the content side of e-learning (hbr.org 2017). Thus, the type of social enterprise for WebOrganic is a community-based organization.
3. The expanded mission of WebOrganic was to serve all students of Hong Kong, not only those at bottom of the pyramid (Kolk, Rivera-Santos and Rufín 2014). The poor students could purchase the products of WebOrganic like iPads at much reduced price and average students purchased the products at discounted price. The “I learn at Home” Program restricted the access of WebOrganic to eastern district schools of Hong Kong. In order to serve students of eastern district schools, Huang provided iPads to students at an average price who leased these products to underprivileged students. Cantonese-learning software was installed onto iPads of WebOrganic to help students from ethnic minority group. Huang also planned to serve students of special education needs like visually and physically handicapped students.
WebOrganic aimed to be financially sustainable after its initial five years of funding. Thus the organization wanted to diversify its business model by serving students of Hong Kong for who products of WebOrganic would be affordable. The role of WebOrganic as a distributor was strengthened by bulk orders which the company received from schools. Huang also developed a program to replace tablets and replaced broken and damaged computers for students at the cost of a small fee which was a healthy source of income for the company. WebOrganic was a holistic- e-learning facilitator. For instance, content management systems on i-Pads were developed by WebOrganic with Apple and teachers were also trained by Apple as part of Tree School Program(hbr.org 2017).
A lean corporate structure with only 13 permanent staff on payroll enabled company to save cost. WebOrganic focused on a win-win relationship with university volunteers and service centers. Huang utilized the staff of the centre to provide services and thus he could reduce the cost of human resource. Huang had to bear zero financial cost, Huang invited students of University to provide extra support for service of WebOrganic(hbr.org 2017). Thus the Blue Ocean Strategy of the company was strengthened by its expanded mission to serve all students of Hong Kong.
Conclusion and Recommendations
WebOrganic faced opposition from Principals of Schools who blamed the company for insufficient funds, parents were not ready to spend extra money to purchase products and software and teachers felt one-to-one computing wasted time. These were strategic issues of WebOrganic that it could not act as a change leader initially in Hong Kong.
It can be recommended that WebOrganic should have organized a change management program in Hong Kong and raised awareness among teachers and parents about benefits of e-learning before venturing into this untapped market. In order to sustain competitive advantage, WebOrganic should continue building rapport with teachers, parents and schools by organizing awareness programs because students of all economic backgrounds were the potential market of WebOrganic.
Agnihotri, A., 2013. Doing good and doing business at the bottom of the pyramid. Business Horizons, 56(5), pp.591-599.
Chandrakala, V.G. and Devaru, S.D.B., 2013. Blue ocean strategy and bottom of the pyramid marketing. International Journal of Management Research and Reviews, 3(7), p.3080.
Gupta, S., 2013. Serving the" Bottom of Pyramid"-A servant leadership perspective. Journal of Leadership, Accountability and Ethics, 10(3), p.98.
hbr.org. 2017. Weborganic. [online] Available at: https://hbr.org/product/weborganic-creating-a-blue-ocean.../HK1001-PDF-ENG [Accessed 10 Nov. 2017].
Kim, W.C. and Mauborgne, R.A., 2017. Blue Ocean Leadership (Harvard Business Review Classics). Harvard Business Review Press.
Kolk, A., Rivera-Santos, M. and Rufín, C., 2014. Reviewing a decade of research on the “base/bottom of the pyramid”(BOP) concept. Business & Society, 53(3), pp.338-377.
Ridley-Duff, R. and Bull, M., 2015. Understanding social enterprise: Theory and practice. Sage.