Managing Innovation

AssignmentRubric Example2 Example3 HF-BOSCanvas11

ManagingInnovation Marking Grid
Managing
Innovation

100 85 (80-89) 75 (70-79) 65 (60-69) 55 (50-59) 45 (40-49) 35 (30-39) 25 (20-29) 0

Theoretical
Explanation
(range &
understandin
g of sources;
synthesis &
focus on
relevant
ideas) 30%

Novel, persuasive,
& clearly
articulated
argument that
supports the
student’s choice of
product/ service &
theory/ theories.
Comprehensive
coverage of sources
that is synthesized
exceptionally;
impressive
evidence of
extensive reading in
& beyond syllabus
& unusually
insightful in
understanding &
synthesising ideas;
integration of
materials from the
module as well as
from other sources
that the student
has convincingly
argued should be
relevant to her
argument.
Publishable ideas in
scholarly business
& management
journals.

Novel, persuasive, &
clearly articulated
argument that
supports the
student’s choice of
product/service &
theory/theories.
Impressive coverage
of core and other
theories in module
within word limit;
evidence of extensive
reading in & beyond
syllabus &
imagination in
understanding &
synthesising ideas, in
particular,
demonstrated
knowledge (by way of
citation and
comparative analysis)
of core Managing
Innovation theories;
integration of
materials from the
module as well as
from other sources
that the student has
convincingly argued
should be relevant to
her argument.
Potentially
publishable ideas.

Knowledgeable,
persuasive, & clearly
articulated argument
that supports the
student’s choice of
product/service &
theory/theories.
Thorough coverage of
sources in the module
syllabus, in particular,
demonstrated
knowledge (by way of
citation and/or
comparative analysis)
of core Managing
Innovation theories;
evidence of novelty &
imagination in
understanding &
synthesizing ideas.

Knowledgeable and
clearly articulated
argument that supports
the student’s choice of
product/service &
theory/theories
Competent coverage of
major sources in the
module syllabus, in
particular, some
acquaintance (by way of
citation and/or
comparative analysis)
with core Managing
Innovation theories;
shows depth of
understanding of
applying the student’s
theory to practice;
relationships between
ideas cogently made;
some evidence of
imagination in applying
course materials to
explain & predict the
student’s chosen
product.

Reasonably clear &
well-articulated
argument that
supports the
student’s choice of
product/service &
theory/theories.
Some evidence of
read knowledge of
the student’s
chosen
theory/theories &
understanding of
key concepts &
issues from a range
of listed sources on
the module
syllabus, including
the module’s
lecture slides; ideas
synthesised &
related to the topic;
some thought in
addressing
assessment rubric
although little
evidence of thought
in relating features
of theories
identified by the
student with her
ideas.
Ideas need
development &
refinement.

Reasonably clear
argument that
underpins the student’s
choice of
product/service &
theory/theories.
Perceptible evidence of
reading & reflection
from the syllabus &
understanding of key
concepts & issues from a
range of listed sources
on the syllabus,
including lecture slides;
ideas introduced &
related to the student’s
topic; some thought in
addressing assessment
rubric although little or
no evidence of
imagination in managing
innovation in the
student’s chosen
product.
Ideas need considerable
development.

Unclear & weakly
supported
argument for the
student’s choice of
product/service &
theory/theories.
Too little evidence
of acquaintance
with any part of
the module
syllabus & little
evidence of
references to &
study of lecture
slides & associated
materials.
References suggest
either poor
comprehension of
referenced
material or that
the student hasn’t
read his cited
material.
Little thought in
addressing
assessment rubric.
Unconvincing &
poorly developed
ideas.

Unclear & weakly
supported
argument for the
student’s choice
of
product/service &
theory.
Largely incorrect
explanation
and/or use of
theories in and/or
outside the
syllabus with
references that
reflect little
reading or
reading that
substitutes
materials in the
course syllabus.
Weak or
implausible ideas.
Imperceptible
evidence of
learning from the
syllabus & course
materials.

Wholly
incorrect
theories &
poorly
explained
ideas; or not
attempted.

Theory
Application
(organisation/
coherence of
argument;
support
through
examples,
details,
quotations, &
references;
critical
approach)
25%

Exceptionally well
conducted &
persuasive critical
analysis of received
ideas & theories for
the
product/service’s
historical
development;
creative
consideration of
alternative
perspectives; well-
supported in-depth
analysis; insightful
evaluation &
discussion; deeply
thoughtful &
reflective; excellent
use of examples.

Comprehensive &
systematic critical
analysis of received
ideas & theories,
within the essay’s
word limit, for the
product/service’s
historical
development;
creative
consideration of
alternative
perspectives; well-
supported, in-depth
analysis of a range of
future development
possibilities; insightful
evaluation &
discussion;
substantial, clear
evidence of
reflection; impressive
use of a range of
examples to support
the student’s
prognosis of the
chosen
product/service’s
possible development
pathways.
Thoughtful
consideration of
various implications
of the student’s study
for other related
products and/or
services.

Systematic critical
questioning of received
ideas & theories for
the product/service’s
further development;
persuasive suggestions
of alternative
perspectives for this
historical
development.
Good consideration of
implications of the
student’s study for
other related products
and/or services.

Fairly impressive critical
review & synthesis of
received ideas &
theories for the
product/service’s
historical development;
insightful use of
personal ideas and
business knowledge
and/or experience;
perceptive, although
limited, appraisal of
implications of a
number of the student’s
historical development
for her product/service.

Some evidence of
ideas, reasonably
well supported by
theory, that have
been organized &
grouped to explain,
fairly competently,
the chosen
product/service’s
historical
development; use
of examples /
product details /
quotations /
references &
business experience
or knowledge to
support the
student’s argument
for the
product/service’s
historical
development; some
critical analysis of
these ideas, but too
limited appraisal of
implications of the
study.

One or more ideas, with
some evidence of
theoretical
underpinnings,
reasonably well
organised & grouped to
explain the chosen
product/service’s
historical development.
Correct use of examples
/ product/service details
/ quotations /
references & business
experience or
knowledge to support
the student’s argument
on the chosen
product/service’s
historical development.
Too limited appraisal of
implications of the
student’s study.

Weak or
imperceptible
argument, with
imperceptible
theoretical
underpinnings, for
the historical
development of
the student’s
chosen
product/service;
little evidence of
structured analysis
of this argument.
A number of
references outside
the course
syllabus, including
internet sources;
little or no
appraisal of
implications of the
student’s work.

Imperceptible
argument and
theory in
explaining the
historical
development of
the student’s
chosen
product/service.
References that
are mostly either
outside the
course syllabus,
including internet
sources, and/or
are wrongly
referenced.
Inappropriately
critical approach
or absence of
criticality.

Wholly
incorrect or
not
attempted.

Future
Development
(organisation/
coherence of
argument;
support
through
examples,
details,
quotations, &
references;
critical
approach)
20%

Exceptionally well
conducted &
persuasive critical
analysis of received
ideas & theories for
the
product/service’s
further
development;
creative
consideration of
alternative
perspectives; well-
supported in-depth
analysis; insightful
evaluation &
discussion; deeply
thoughtful &
reflective; excellent
use of examples.

Comprehensive &
systematic critical
analysis of received
ideas & theories,
within the essay’s
word limit, for the
product/service’s
further development;
creative
consideration of
alternative
perspectives; well-
supported, in-depth
analysis of a range of
future development
possibilities; insightful
evaluation &
discussion;
substantial, clear
evidence of
reflection; impressive
use of a range of
examples to support
the student’s
prognosis of the
chosen
product/service’s
possible development
pathways.
Thoughtful
consideration of
various implications
of the student’s study
for other related
products and/or
services.

Systematic critical
questioning of received
ideas & theories for
the product/service’s
further development;
persuasive suggestions
of alternative
perspectives for this
further development;
thorough, well-
supported analysis of a
number of future
development
possibilities; novel &
insightful evaluation &
discussion of
implications of
predictions of a
number of the chosen
product/service’s
possible development
pathways.
Good consideration of
implications of the
student’s study for
other related products
and/or services.

Fairly impressive critical
review & synthesis of
received ideas &
theories for the
product/service’s
further development;
coherent, realistic, &
theoretically-supported
argument for the
product/service’s future;
insightful use of
personal ideas and
business knowledge
and/or experience;
perceptive, although
limited, appraisal of
implications of a
number of the student’s
predicted future
development pathways
for her product/service.

Some evidence of
ideas, reasonably
well supported by
theory, that have
been organized &
grouped to predict,
fairly competently,
the chosen
product/service’s
future; use of
examples / product
details / quotations
/ references &
business experience
or knowledge to
support the
student’s argument
for the
product/service’s
future
development; some
critical analysis of
these ideas, but too
limited appraisal of
implications of the
study.

One or more ideas, with
some evidence of
theoretical
underpinnings,
reasonably well
organised & grouped to
predict the chosen
product/service’s future.
Correct use of examples
/ product/service details
/ quotations /
references & business
experience or
knowledge to support
the student’s argument
on the chosen
product/service’s future.
Too limited appraisal of
implications of the
student’s study.

Weak or
imperceptible
argument, with
imperceptible
theoretical
underpinnings, for
the future of the
student’s chosen
product/service;
little evidence of
structured analysis
of this argument.
A number of
references outside
the course
syllabus, including
internet sources;
little or no
appraisal of
implications of the
student’s work.

Imperceptible
argument and
theory in
predicting the
future of the
student’s chosen
product/service.
References that
are mostly either
outside the
course syllabus,
including internet
sources, and/or
are wrongly
referenced.
Inappropriately
critical approach
or absence of
criticality.

Wholly
incorrect or
not
attempted.

Imagination
(evidence of
creativity &
foresight in
reflecting on
course
materials &
articulating a
novel &
interesting
picture of the
student’s
innovation)
15%

Rare ability, based
on professional or
empirical
knowledge, of
technology and/or
non-technology
innovation, to apply
student’s chosen
elements of
innovation theory
well beyond the
remit of this
undergraduate
module.
Outstanding
learning from
course materials.
Basis of a
publishable
scholarly journal
article!

Exceptional
application of
student’s chosen
elements of
innovation theory
beyond the remit of
this undergraduate
module to create
multiple images of
the possible future
development of her
product.
Thoughtful
consideration of core
issues of the student’s
imagined futures.
Impressive learning
from course
materials.
Persuasive
articulation of the
student’s perceived
limitations of her
theory in imagining
any of her futures.
Considerable
evidence of
imagination, based on
the student’s
knowledge, that some
of her perceived
limitations may be
overcome.

Knowledgeable
application, within the
remit of this
undergraduate
module, of student’s
chosen elements of
innovation theory to
create alternative
images of the possible
future development of
her product.
Some consideration of
core issues around the
student’s imagined
futures.
Considerable learning
from the course
evident.
Some articulation of
the student’s
perceived limitations
of her theory in
imagining her
product/service’s
future development.
Evidence of
imagination, based on
the student’s
knowledge, that some
of her perceived
limitations may be
overcome.

Thoughtful application,
within the remit of this
undergraduate module,
of student’s chosen
elements of innovation
theory to create
alternative images of
the possible future
development of her
product. A few
limitations of the
student’s reading &
knowledge, although
not obvious.
Clear learning from the
course.
Perceptible
consideration of a few
issues around the
student’s imagined
futures.
Limited articulation of
the student’s perceived
limitations of her theory
in imagining her
product/service’s future
development.
Some evidence of
imagination, based on
the student’s
knowledge, that a few
of her perceived
limitations may be
overcome.

Acceptable,
although limited
application, within
the remit of this
undergraduate
module, of
student’s chosen
elements of
innovation theory
to create a
reasonably clear
image of the
possible future
development of her
product.
Limitations of the
student’s reading &
knowledge,
although some
learning from the
course evident.
Perceptible
consideration of a
few issues around
the student’s
imagined futures.
Limited articulation
of the student’s
perceived
limitations of her
theory in imagining
her
product/service’s
future
development.
Some evidence of
imagination that a
few of the student’s
perceived
limitations may be
overcome, although
the relationship
with her knowledge
base is unclear.

Some evidence,
although limited, of
student’s application of
student’s chosen
elements of innovation
theory to create a
perceptible image of the
possible future
development of her
product. Constrained
reading & knowledge
evident.
Some evidence of
learning from the
course.
Limitations of the
student’s reading &
knowledge evident.
Perceptible
consideration, although
weakly argued, of a few
issues around the
student’s imagined
futures.
Very limited articulation
of the student’s
perceived limitations of
her theory in imagining
her product/service’s
future development.
Slight evidence of
imagination that a few
of the student’s
perceived limitations
may be overcome,
although the
relationship with her
knowledge base is
unclear.

No evidence, or
unsupported
evidence, of
student’s
application of
student’s chosen
elements of
innovation theory
to create a
perceptible image
of the possible
future
development of
her product.
Severe limitations
of the student’s
reading &
knowledge
evident.
Paucity of learning
from the course.
Imperceptible
consideration of a
few issues around
the student’s
imagined futures.
Imperceptible
articulation of the
student’s
perceived
limitations of her
theory in imagining
her
product/service’s
future
development.
No evidence of
imagination that a
few of the
student’s
perceived
limitations may be
overcome.

No evidence, or
unsupported
evidence, of
student’s
application of
student’s chosen
elements of
innovation theory
to create a
perceptible image
of the possible
future
development of
her product.
Absence of
knowledge &
learning from the
course.

Wholly
incorrect
application
or not
attempted.

Presentation
(length; use of
academic
conventions;
grammar,
paragraphing;
layout; proof
reading) 10%

Perfectly
presented, with a
powerful &
persuasive use of
the student’s
evidence that is
supported by a
level of writing
clearly beyond
expectations of this
undergraduate
course.
Professional
standard of writing.

Exceptionally clearly
& cogently argued &
presented; skilled use
of academic
conventions & no
perceptible
grammatical,
typographical, or
other writing errors.
A well-written essay
to a very high
standard.

Outstanding
presentation, with
imperceptible errors
on grammar, essay
layout, and/or
proofreading.
Well structured, with
clear evidence of
planning.
Academic conventions,
particularly on
organisation and
proofreading of essay,
well observed.
Concise & effectively
argued; skilled use of
academic conventions.
Simply a well written
piece of work.

Impressive presentation
for a L6 undergraduate
degree module, with
imperceptible errors on
grammar, essay layout,
and/or proofreading.
Thoughtful structuring
with some evidence of
planning.
Academic conventions,
particularly on
organisation and
proofreading of essay,
well observed.

Suitable, although
not impressive,
presentation for a
L6 undergraduate
degree module,
with minor,
insignificant errors
on grammar, essay
layout, and/or
proofreading.
Academic
conventions,
particularly on
structuring and
proofreading,
generally
satisfactorily
observed.
Reasonably
accurate spelling, &
grammar.

Suitable presentation
for a L6 undergraduate
degree module, albeit
with perceptible errors
on grammar, essay
layout, and/or
proofreading. Academic
conventions, particularly
on structuring and
proofreading, generally
satisfactorily observed.

Somewhat
unsuitable
presentation for a
L6 undergraduate
degree module
with presentation
errors.
Academic
conventions,
particularly on
structuring and
proofreading, not
observed or not
adequately
observed.

Largely unsuitable
presentation for a
L6 undergraduate
degree module.
Academic
conventions,
particularly on
structuring and
proofreading, not
observed.

Incorrect or
unsuitable
presentation
or not
attempted.

MANAGINGINNOVATION

7

3.0 Company background

Zipcar is an American car sharing company who provide automobile reservation to its
members. This company was founded in year 2000 by Antje Danielson and Robin Chase. The
company operates over 12,000 vehicles in urban areas and campuses. This allows access to
over one million on-demands (Zipcar, 2020). Avis budget group acquired Zipcar for
approximately US$ 500 million in 2014 (Zipcar, 2020). In 2016 Zipcar had one million
members across 500 cities in 9 countries and also nearly 500 universities around the world.
By that time they were offered nearly 10,000 vehicles to their members.

Zipcar moved from Red Ocean to Blue Ocean by using differentiation and cost leadership
strategy. Company follows subscription, pay per use and digitisation business models. Zipcar

MANAGING INNOVATION

8

provides over 60 different makes and models of vehicles to their members including Hybrid,
SUVs, Pickup trucks, Luxury vehicles, Mini vans and cargo vans (Zipcar, 2020).

3.1 Strategy canvas (Kim, 2014)

When Zipcar entered into the market, there was a traditional car renting service which was
operated. If Zipcar decided to compete in the same market (Red Ocean), they would have
used porter’s strategy or resource-based strategy as sustaining innovations. However, Zipcar
decided to move on to Blue Ocean (Bocken, 2017).

First of all, Zipcar created strategic canvas to understand the current situation and the
competition of the industry. By analysing the current situation, Zipcar decided to apply cost
leadership strategy to create Blue Ocean.

Strategy canvas shows the path to Blue Ocean. Strategy canvas for Zipcar at the launch as
follows.

(Source – Kim, 2014)

3.2 Four action frame work (Kim, 2014)

According to four actions framework, Zipcar decided what factors they can eliminate, raise,
reduce and create. Here they use cost leadership strategy to create value for the customer.

To get into Blue Ocean, Zipcar decided to eliminate a few factors from traditional car hiring
industry. They decided what they can create to enhance the customer value.

When Zipcar launched in the year 2000, this is how they utilised four actions framework.

0

2

4

6

8

10

12

Prices Sales Rep Paper Work Hub Flexibility Availability Ease of us

e

Lo
w

H

i

g

h

Strategy Canvas

Zipcar

Zipcar Traditional

MANAGING INNOVATION

9

(Source – Kim, 2014)

Zipcar decided to eliminate paper work, sales representatives and venue (Hub). They raised
flexibility and availability. Created mobile App for ease of use and reduce the customers
hassle and stress.

3.3 Business Model Canvas (Osterwalder, 2015) (Refer Appendix 7) Zipcar
Business model canvas reflects on how Zipcar enter into market and how they position
themselves in the market. Business model canvas at the beginning of the company as
follows,

Eliminate

Sales rep,
Paperwork,

Hu

b

Raise

Flexibility,
Availabilit

y

Create

Ease of use,
Mobile App

Reduce

Hassle

MANAGING INNOVATION

10

(Source – Osterwalder, 2015)

When company grows over the years, Zipcar had to face into competition. There are many
companies that come into market. In this situation, the Blue Ocean turned into Red Ocean.
With the introduction of Zipcar, they implemented cost leadership structure to gain
advantage. Create value by cost cutting and eliminating a few activities.

As the competition rises, they had to restructure the strategy curve. This time they used
differentiation strategy. They need to be different to create value. Later they were
disruptive to the market by using differentiation.

Restructured strategy canvas as follows

MANAGING INNOVATION

11

(Source – Kim, 2014)

This strategy canvas illustrates how they dominate the market by adding value and
differentiate themselves from others.

Four actions frame that the company must have used will illustrates from following diagram.

(Source – Kim, 2014)

0
2
4
6
8
10
12

Pr
ice

s

Sa
les

Re
p

Pa
pe

r W
or

k
Hu

b

Fle
xib

ilit
y

Av
ai

l

ab
ilit

y

Ea
se

of
us

e

Ad
ve

rti
sin

g

Ad
dit

i

on

al

fee

Rid
e r

efu
sa

l

Re
al

tim
e t

rak
ing

Cu
sto

me
r o

pt
ion

s

Se
cu

rit
y

Te
ch

no
log

y
Lo
w

H
ig

h
Strategy Canvas ZipCar

Zipcar

Traditional

Eliminate

Sales rep,
Paperwork, Hub,

relationship
management,

Raise

Flexibility,
Availability,

security, sevice,
convenience

Create

Ease of use,
Mobile App,
prestige, Eco

friend

ly

Reduce

Hassle, price,
additional fee,

complexity

MANAGING INNOVATION

12

With the new strategy curve, company recognised that they needed to be different from the
competition. Therefore, they have changed their business model according to the company
value proposition. Based on that, new business model canvas illustrates as follows
(Osterwalder, 2015).

(Source – Osterwalder, 2015)

4.0 Company future developments

4.1 Digitalisation

Technology plays a significant part in the modern world. AI and digitalisation is being used in
many industries. In the travel and holiday sector, it could start from electronic passport gate
to booking a car or hotel. Zipcar is planning to interconnect all these sectors together to
provide customer a hassle free and stress-free holiday or journey. In terms of this, Zipcar is
planning to introduce a 24hours system where you have access to many sectors including
flight arrival notification to booking a hotel or hiring a car (Avis, 2020).

4.2 Improvement in maintenance and damage management system

Customers would be allowed to use Zipcar app to take 360-degree images of the car to
provide detail about any damage to maintain full transparency (Avis, 2020).

MANAGING INNOVATION

13

4.3 Provide full interconnected transport service to its customer and

business.

Zipcar has launched more than 100,000 cars to meet the future needs of customers.
Operation of mobility lab in Kansas could pilot new customer experience and collaboration
with cities. The migration of the entire platform to the cloud also enhances future
development of technology. The new app provides you straight to vehicle access by passing
the rental desk completely. This gives the customer access to have complete control of their
rental from start to finish. The new app is designed to select the exact car that you want not
the car group, just 2 hours before your rental starts (Zipcar, 2020).

Enable customer to connect with the car by using any device that they use. This allows
customer to unlock the car and locate the car by flashing lights. Real time reports and
personalised preferences like seating position or radio stations are remembered to enhance
customer loyalty.

4.4 Helping government with zero emission project

Zipcar 2015 vision is to reduce CO2 emission. As a result of that, company are planning to
use all electric cars in the future. They are planning to reduce 160,000 tonnes of CO2 by
using 9,000 shared electric cars (Zipcar, 2020).

5.0 Own Idea for Future Development

Suggestions for the future developments are radical and disruptive innovations.

5.1 E-Banking

Zipcar e-Banking – Use of disruptive innovation and diversification theory Zipcar can expand
their business in to new market with new product.

5.2 Air Taxi

This innovation is about air taxis using AI technology. The taxi will operate using
autonomous vehicle (Auto Pilot System). This Taxi will be run by using Hydrogen Power as
world is now moving towards hydrogen power in the future (CleanTechnica, 2020).

Strategy canvas for future innovation is as follows

MANAGING INNOVATION

14

Four action frame work for future development

The rider will have full freedom while having a ride. The use of chip card will be eliminated.
Air Taxi will respond to the customer’s voice and voice recognition technology will be
utilised. The taxi will come to your location and pick you up. The taxi will take the customer
from A to B off the ground. This will reduce traffic and the duration of the journey. To
reduce CO2 emission, Hydrogen power will be utilise. By using air taxi customer will get Eco
friendly ride with freedom.

5.3 Use of Disruptive and Diffusion innovation theory

With disruptive, companies innovate faster than customers lives change. This is a radical
innovation for Zipcar cars sharing model. This innovation is about Air Taxis using
Autonomous (Auto Pilot) vehicles. Zipcar can be disruptive by introducing this model to the
car sharing market.

0
2
4
6
8

10
12

CO
2 E

mi
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Future Innovation

Zipcar

Air Taxi

Eliminate

Chip Card,
Self Driving

Raise

Technology,
Freedom

Create

ECO Friendly
ride

Reduce

CO2
Emission,

Time, Traffic

MANAGING INNOVATION

15

This innovation may use both disruptive and diffusion theories. In the car sharing market,
people already know about the use of technology such as book a car online, use of chip card
and payment online. However, there are customers who look for new innovation and new
technology. According to disruptive innovation, there are four different categories of
customers. Low Quality Use, Medium Quality Use, High Quality Use, Most Demanding use
(Liu et al, 2020). I think car sharing business is in High Quality Use stage at the moment.
Therefore, we can introduce something that is disruptive and can serve most demanding
segments. This is where we introduce Air Taxis.

This disruptive innovation could fall into diffusion. In the Diffusion theory, there are five
stages, Innovators, Early Adopters, Early Majority, Late Majority, Laggards (Refer Appendix
8) (Davila et al, 2012).

In this case, Innovators would be a young generation who look for something exciting. They
could be Zipcar members. Early Adopters could be Zipcar members who already observing
the Innovators. Early Majority would find this product with advertising or WOM. This is
when the company use three tier non-customer model (Davila et al, 2012) to find new
customers. Once you reach to this segment of customer, there is another segment who is
observing them. They will adopt this product after. By this time, this will become familiar to
market. So, the Late Majority will tend to adopt this. Finally, Laggards may or may not adopt
this new innovation. They might stick with traditional car sharing system or the system that
they already adopted.

6.0 Conclusion

Organisations use different strategies to compete in current market (Red Ocean). Strategies
are long term decision that organisations made in order to compete in the market. Porters
five force and resource-based strategy will be use to compete in the Red ocean. However,
innovations keep organisations alive in the competition. Blue ocean innovation is where
organisations find uncontested market. Blue ocean innovation theory helps organisation to
step in to uncontested market. In order to gain competitive advantage organisation has to
come up with innovative ideas. This report illustrated how Zipcar introduce them to the
market and how they invade the market using blue ocean innovation. In order to implement
Blue ocean theory organisations must understand what customer need and how company
can create value to gain competitive advantage. This could do by using strategy canvas and
four actions frame work. Finally it conclude that success of an organisation depend on
innovations.

MANAGING INNOVATION

16

7.0 Reference

• 50MINUTES.COM (2015) Blue Ocean Strategy: Innovate your way to success and
push your business to the next level. Management & Marketing, Primento
Publishing.

• Bocken, N. (2017), “Business-led sustainable consumption initiatives: impacts and
lessons learned”, Journal of Management Development, Vol. 36 No. 1, pp. 81-
96. Available at – https://doi-org.roe.idm.oclc.org/10.1108/JMD-10-2014-0136
(Accessed 20.11.2020)

• Christensen, Clayton M. (2015) Innovator’s Dilemma: When New Technologies Cause
Great Firms to Fail. The management of innovation and change series. Harvard
Business review Press.

• Clean Technica (2020) Hydrogen Power For Heavy Trucks In China And All The Ships
At Sea. Available at – https://cleantechnica.com/2020/11/22/hydrogen-power-for-
heavy-trucks-in-china-and-all-the-ships-at-sea/amp/ (Accessed 27.11.2020)

• Davila, T., Epstein, M and Shelton, R (2012) Making innovation work: how to manage
it, measure it, and profit from it. Updated edition. Pearson FT Press.

• Drucker, P (2014) Innovation and entrepreneurship. Routledge Classics, New edition.
Routledge.

• Fast company (2010) Stories about Zipcar Available at
https://www.fastcompany.com/company/zipcar (Accessed 21.11.2020)

• Fast company (2013) Avis Budget Car To Buy Zipcar For $500 Million Available at –
https://www.fastcompany.com/3004382/avis-budget-car-buy-zipcar-500-million
(Accessed 22.11.2020)

• Fast Company (2019) An elegy for Car2Go, the smarter Zipcar rival that lost its way
Available at – https://www.fastcompany.com/90446387/this-smartphone-enabled-
car-sharing-service-was-fantastic-while-it-lasted (Accessed 21.11.2020)

• Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regner, P. (2017) Exploring
Strategy: text and cases. (11th ed.) Harlow: Pearson Education.

• Kim Chang (2020) Blue ocean, what is Blue ocean strategy Available at –
https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/ (Accessed 20.11.2020)

• Kim, W. Chan (2014) Blue Ocean Strategy, Expanded Edition: How to Create
Uncontested Market Space and Make the Competition Irrelevant. Expanded edition.
Harvard Business review Press

• Kim, W. Chan (2017) Blue Ocean Leadership (Harvard Business Review Classics).
Harvard Business Review Classics, Harvard Business review Press.

MANAGING INNOVATION

17

• Leavy, B. (2018), “Value innovation and how to successfully incubate “blue ocean”
initiatives”, Strategy & Leadership, Vol. 46 No. 3, pp. 10-20. Available at – https://doi-
org.roe.idm.oclc.org/10.1108/SL-02-2018-0020 (Accessed 19.11.2020)

• Liu, W., Liu, R.-h., Chen, H. and Mboga, J. (2020), “Perspectives on disruptive
technology and innovation: Exploring conflicts, characteristics in emerging
economies”, International Journal of Conflict Management, Vol. 31 No. 3, pp. 313-
331. Available at – https://doi-org.roe.idm.oclc.org/10.1108/IJCMA-09-2019-0172
(Accessed 23.11.2020)

• Osterwalder, A (2010) Business model generation: a handbook for visionaries, game
changers, and challengers. Hoboken, New Jersey: John Wiley & Sons Inc.

• Raconteur (2019) Pioneering the future of mobility Available at –
https://www.raconteur.net/sponsored/pioneering-the-future-of-mobility/ (Accessed
19.11.2020)

• Randall, R.M. (2015), “W. Chan Kim and Renée Mauborgne dispel blue ocean
myths”, Strategy & Leadership, Vol. 43 No. 2, pp. 11-14. Available at – https://doi-
org.roe.idm.oclc.org/10.1108/SL-01-2015-0007 (Accessed 20.11.2020)

• Stars (2018) Analysis of business models for car sharing Available at – http://www.lgi-
consulting.com/wp-content/uploads/2019/10/STARS-D3.1 (Accessed 22.11.2020)

• Sullivan (2008) Defining Innovation Available at –
https://www.sagepub.com/sites/default/files/upm-binaries/23137_Chapter_1
(Accessed 20.11.2020)

• Taylor, S, P (2017) What is innovation? A study of the definitions, Academic models and
applicability of innovation to an example of social housing in England. University of
Cumbria. Open Journal of Social Sciences, 5 (11). pp. 128-146. Available at –
https://insight.cumbria.ac.uk/id/eprint/3475/1/Taylor_WhatIsInnovation

• The Guardian (2014) Driverless cars – the future of transport in cities? Available at –
https://www.theguardian.com/sustainable-business/driverless-vehicles-future-car-
sharing (Accessed 23.11.2020)

• Trade Brains (2020) What exactly is a Blue Ocean Strategy? Available at –
https://tradebrains.in/blue-ocean-strategy/ (Accessed 20.11.2020)

• Vox (2017) The man-made world is horribly designed. But copying nature helps.
Available at – https://www.vox.com/videos/2017/11/9/16628106/biomimicry-
design-nature (Accessed 22.11.2020)

• Wunker, S. (2012), “Better growth decisions: early mover, fast follower or late
follower?”, Strategy & Leadership, Vol. 40 No. 2, pp. 43-48. Available at – https://doi-
org.roe.idm.oclc.org/10.1108/10878571211209341 (Accessed 21.11.2020)

• Wyatt Lehn, Connor Lew, Jack Weller and Jon Maciver (No Date) Blue ocean strategy.
Fostering creativity Available at – https://citystudiocnv.com/wp-
content/uploads/2019/12/Final-Group-Project-Blue-Ocean-Strategy-grp-1 (Accessed
21.11.2020)

• Zipcar (2020) Zipcar over view Available at – https://www.zipcar.com/press/overview
(Accessed 18.11.2020)

MANAGING INNOVATION

18

8.0 Appendix

8.1 Appendix 1

(Source: Kim, 2014)

8.2 Appendix 2

Porters five force

(Source: Johnson et al, 2017)

MANAGING INNOVATION

19

8.3 Appendix 3

Strategy canvas

(Source: Kim, 2014)

8.4 Appendix 4

(Source: Kim, 2014)

MANAGING INNOVATION

20

8.5 Appendix 5

Three tiers of noncustomers

(Source: Kim, 2014)

8.6 Appendix 6

Buyer utility map

(Source: Kim, 2014)

MANAGING INNOVATION

21

8.7 Appendix 7

(Source: Osterwalder, 2010)

8.8 Appendix 8

The corresponding Classic Bell-Shaped Adopters Curve

BLUE OCEAN STRATEGY:

AN ANALYSIS OF

BREWDOG | BUS020X618S

Table of Contents

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Introduction to BrewDog

BrewDog is Scottish independent brewery & ‘no-nonsense chain bar specialising in the
Scottish brewery’s craft beers’ (BrewDog, 2020) founded in 2006 by 24 year old James Watt
and Martin Dickie in Fraserburgh, Scotland. James and Martin, who shared a passion of craft
beers and were bored of the dominance of industrial beers and lagers in the UK beer industry,
decided to make their own. Fast forward to 2020, where BrewDog are experiencing
exponential rates of growth, with sales in 2018 growing by 55% from 2017, seeing revenues
of £171.6m and gross profits of £57.7m (BrewDog, 2018). BrewDog has achieved enormous
success, boasting a portfolio of 52 UK and 31 International BrewDog bars, along with a
range of dog-friendly UK and International hotels. How has BrewDog been so successful?
The core of BrewDogs success comes down to the identification and breakthrough into a
unique market space through the creation of a range of unique & branded beer products,
setting sail away from Red Oceans towards a Blue Ocean Strategy.

BrewDog Historical Development – Bottling Blue Oceans.

The UK beer industry is dominated by four companies who produce a wide range of beer &
lager. These are Molson Coors, AB InBev, Heineken UK and Carlsberg UK. (IBIS, 2020).
Watt and Dickie had identified that none of the leading UK beers/lagers stood out from the
rest, and were ‘boring and stuffy’ (BrewDog, 2020).

When determining BrewDog’s target market, the zeitgeist was key (BrewDog, 2020).
BrewDog evaluated their own understanding of the current UK beer industry, and concluded
that they could not be the only ones with this perception. They considered their own cultural
value from the punk ethos (DNA, 2019). Considering how punk culture existed as an
alternative to mainstream pop culture, BrewDog identified an opportunity to form its own
subculture & market as an alternative option for the current UK beer industry.
Watt and Dickie felt to achieve sustainable success, they would need to not only create a
unique product, but to redefine the relationship between the beer and the consumer,
ultimately changing the value proposition of the product.

BREWDOG | BUS020X618S

BrewDog Current Strategy Canvas:

Creating a strategy canvas is on way of looking at the value proposition of business model
canvas, this element explains how products create value for customers (Osterwalder &
Pigneur, 2013)

Completing a strategy canvas highlights the key competing areas used by BrewDog to excel
within the UK beer industry. These key competing factors were product design, taste, culture,
range and customer relationship.
The strategy canvas highlights a lack of customer relationships within the UK beer industry,
with many consumers engaging with whatever is available. However, as we move into the era
of craft beer, consumer relationships & loyalty has never been more important (Bernot,
2019). Customer relationships describes the establishment between customers and companies
(Osterwalder & Pigneur, 2013). Placing importance on positive customer relationships will
lead to loyal consumers, positive word of mouth & increased sales (Knilans, 2017). BrewDog
has a unique relationship with many of their consumers, who through a programme called
‘Equity for Punks’, a crowdsourcing initiative which has allowed 1000’s of loyal customers
to become shareholders within the organisation, who receive dividends, discounts and many
other benefits.

Blue Ocean Strategic Move

Industry Value Curve

Figure C: BrewDog
Strategy Canvas 2009
Template: OVP (2020)

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BrewDog’s Value Innovation:

Value Innovation is the simultaneous pursuit of
differentiation and low cost, creating a leap in value for both

buyers and the organisation (Kim & Mauborgne, 2005).
This Framework will consider methods used by BrewDog to

reduce costs while raising value for the consumer.

Cost Savings:

When analysing value innovation, potential cost savings are
identified and achieved through the elimination and reduction of

the factors in which the industry competes (Kim &
Mauborgne, 2005).

BrewDog make considerable cost savings through turning away from traditional marketing
forms such as TV & Radio adverts and effectively utilising social media, e-marketing.
BrewDog are able to reach their target market more effectively through internet channels,
running adverts on sites such as YouTube, Spotify and Facebook. BrewDog is effective at
making short, slick videos usually attached with some form of competition for their social
media sites. BrewDog are experts at creating products to capture the attention of the media,
for example ‘The end of history’ 55% ABV beer named as the strongest beer in the world.
Their extrovert marketing strategies have grabbed many headlines throughout their time
(Anglin, 2017) for example the time they drove a tank down Camden high street, gives them
the desired attention and exposure to be seen and heard by the consumer.

Buyer Value:
Buyer value is elevated by raising and creating elements never before offered by the industry
(Kim & Mauborgne, 2005). Value was created by BrewDog by creating an extensive range
of craft beer, increasing the volume of alcohol and intensity of the flavour, which
differentiated BrewDog products to any other beer/lager in the UK. BrewDog added further
value to their product by the use of unique branding in the form of giving their beers fun
names and bright, colourful labels’ (Smale, 2015) to create an entertaining brand image.
BrewDog took the principle of high flavour, high product design to address the industry low
product range factor identified in the strategy canvas. Taking the principle of high flavour,
high product design and applying it to an extensive product range.

BrewDog Current ERRC:
Considering BrewDog’s Punk-centric image and marketing strategy, BrewDog have broadly
identified their target market as beer drinkers who desire a quality beer with epistemic
qualities, less chemicals and more flavour (TMC, 2019). Just as the punk scene rose as an
alternative to pop culture, BrewDog products have risen as a response to the ‘pop culture’
normalities and boundaries of the UK beer industry. Considering this, BrewDog is punk by
image and punk by product. This position resonates with a large consumer base, who feel the
same about the current state of the ‘pop-culture’ beer industry, and desire a flavoursome,
stronger alternative to the norm. Based on this, the current ERRC grid of BrewDog since
2009.

Figure C: Value Innovation
(Kim & Mauborgne, 2005)

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BrewDog Blue Ocean Analysis: More Than Just Beer

BrewDog have created a Blue Ocean within the UK beer industry, as the strategy and actions
taken by BrewDog have positively affected both its cost structure and its value proposition to
a wide range of consumers. BrewDogs innovation has resulted in them becoming UK’s
fastest growing brand, with brand value in 2019 increasing 89% from 2018, reaching a brand
value of £1.2 Billion (BrewDog, 2019).

The Equity for Punks crowdsourcing series in 2009, 2011 & 2013 has not only provided
BrewDog with the financial resources to develop the brand and product, but to apply blue
ocean thinking on two fronts with one objective, by opening a range of BrewDog branded
locations. BrewDog is now competing within two industry sectors, where they are crafting
their own unique beers, but also creating an interesting place to experience their broad
product range (TMC, 2019). BrewDog have used these locations as a means of creating and
providing the complete BrewDog experience, acting as a tasting bar for their broad range of
300+ beer options. These locations are more than just your typical bar, tapping into more of a
cultural experience, drawing in customers who are keen to try a wide range of beer samples.

Raise:
-Product Taste
-‘Stand out’ labelling
-Variety & Product Range

Create:
-Culture & Passion for IPA’s
-Standout Products
-Branded Locations-
BrewDog Experience
-Equity for Punks

Eliminate:
-Traditional consumer
relationship
-Stuffy ales & beers
-Traditional Marketing
methods
-Boundaries of what beer can
be

Reduce:
-Manufacturing costs
-Distribution costs

New
Customer

Value

Figure D: ERRC Matrix of
BrewDog 2009 Onwards

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Strategy Canvas for BrewDog Locations

Analysing a strategy canvas for BrewDog’s branded locations highlights that the competing
factors against an average, no frills UK bar was product range, informality, and an experience
orientation. BrewDog have devised their own medium between going to a bar for a casual
drink, and going to a vineyard/wine estate for a tasting experience, and have managed to
manufacture their own cultural experience without the formality experienced at a wine estate.
This provides BrewDog with the ability to carry out their ethos of “making other people as
passionate about great craft beer as we are” (BrewDog, 2020) through the creation of a series
of IPA-centric cultural hubs for their target audience to come and try their product range.

BrewDog Future Pathways:

When an organisation successfully enters a sustainable Blue Ocean Market, they can expect
to be market leaders for 10 to 15 years (Kim & Mauborgne, 2005) as they have achieved such
a head start over their competitors. Once a Blue Ocean Market has been established, it is
highly likely that competitors will be trying their best to get a share of your blue ocean.
Therefore for the Blue Ocean to be sustainable, it is essential for Blue Ocean organisations to
aim to be constantly innovating at a rate faster than their competitors. BrewDog have
released blueprints for the direction of their organisation over the next 12 months. Judging
from the huge financial success of their current business endeavours i.e. their growing
number domestic and international BrewDog bar locations (BrewDog, 2020). It can be
expected for BrewDog to continue with Global expansion by opening up locations
worldwide. BrewDog are also seeking to continually broaden their product range, and open a
new distribution centre to ensure constant refrigeration throughout the distribution process
(BrewDog, 2020). BrewDog should continue with this strategy of expansion, however with

Blue Ocean Strategic Move
Industry Value Curve

Figure E: BrewDog Location Strategy Canvas
2009 Onwards Template: (OVP, 20200

BREWDOG | BUS020X618S

increasing competition from other craft beer breweries, the totally blue ocean once enjoyed
by BrewDog is increasingly turning into a red ocean (Kim & Mauborgne, 2005). Therefore
BrewDog must consider further opportunities for innovation, expansion and brand
diversification. One potential for this comes from the BrewDog Cultural Festival.

BrewDog Cultural Festival:

BrewDog are in a unique situation, where they have an incredibly passionate and engaged
customer base, who identify as alternative to mainstream society (BrewDog, 2020) and one
of the ways in which they express this sense of non-conformity is through drinking craft
beers and IPA’s (BrewDog, 2020). We are currently living through a period of rapidly
increasing growth within the experience economy, where 72% of millennials are preferring to
spend their money engaging with live events over the acquisition of material possessions
(Jain, 2019). BrewDog have the potential to harness the socio-cultural aspects of their
branded locations with their alternative-punk brand image to create an arts, creativity,
cultural punk-centric music festival. The idea of a beer brand hosting it’s own music festival
is not entire blue ocean thinking, with examples such as Tennent’s Vital and the London
Craft Beer Festival. However, the completion of a strategy canvas can help to identify key
areas in which BrewDog can alter to achieve a Blue Ocean within this sector.

The strategy canvas identifies the areas in which BrewDog can outperform competing
festivals. These areas are providing Internationally recognised musical acts, range of beer
available on site and working with local artists/cultural exhibitions. Whilst Tennent’s Vital
excels in providing Internationally recognised music acts, they are lacking in range of beer
available, with Tennent’s being the only option, creating a music-orientated festival. On the
other hand, the London Craft Beer Festival has an extensive range of craft beers available,
but is lacking when it comes to providing large headlining acts, creating a beer-orientated
festival. The European Music festival industry is growing rapidly, with a market size of £2.3
Billion in 2016, skyrocketing to £4.1 Billion in 2020 (Statista, 2020), and here BrewDog

Figure F: Strategy Canvas for Festival
Success Template OVP (2020)

BREWDOG | BUS020X618S

have the opportunity to combine this rapid growth with the rapid growth of the craft beer
industry, by hosting a well-rounded, music & beer orientated annual cultural festival.

Business Model Innovation:

Osterwalder (2004, 2013) defines the business model as the logic of how companies capture,
deliver and create value, as such business models are essentially the application of strategic
management. Furthermore, BOS and business model canvas both aim to simultaneously
pursue cost reduction and value creation for buyers (Gassmann, et al., 2014). Below, are
BrewDog’s business model canvas from 2009-2020, and from 2020 onwards.

Figure G: Strategy Canvas for BrewDog Future
Pathways 2020 Onwards Template (OVP, 2020)

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Figure H: Business Model Canvas BrewDog 2009-2020 Template: Strategyzer (2020)

BREWDOG | BUS020X618S

Fans of
alternative/punk/
rock music

UK Festival
Goers

Fusion of large scale
music & craft beer
festivals

Annual, large scale
sense of alternative
togetherness

Influencers
Bloggers
Bands
Artists
Local
Authorities

Large Scale Project Management
Liaising with local authorities
Mass-Scale single event marketing Local Authorities

Musical Acts
Sponsors
On-site Vendors
Booking Agents

Project Management Teams
Musical Acts
Insurance
Equipment & Land Rent

Ticket Sales Online/Physical
Sponsorships
On-Site Vendor Fees

Figure I: Business Model Canvas BrewDog 2020 Onwards Template: Strategyzer (2020)

BREWDOG | BUS020X618S

Business Model Analysis:

An organisation as large and diverse as BrewDog will likely take elements from a number of
business models and collate these elements into the overall successful model it utilises today.
Firstly, the model of crowdsourcing. Equity for Punks is a form of crowdsourcing which
involves the users to contribute the value provided (Das, 2019), and has been fundamental to
achieve the financial resources required for the sharp rise and success of BrewDog so far.

Secondly, Aikido has been identified for Deliveroo. The business model of aikido allows an
organisation to offer something diametrically opposed to the image and mindset of the
competition (Trizbm, 2019). In other words, provides a value proposition which attracts
customers who prefer ideas & concepts opposed to the mainstream. BrewDog personifies this
model through their marketing efforts, product names and imagery which focuses on
highlighting the fact that their product is different to the mainstream.

As BrewDog boasts such an extensive product range, there are only a limited number of
products available in supermarkets & stores, therefore BrewDog heavily relies on the use of
e-commerce and generating revenue from their website. BrewDog allows consumers to
complete ‘personality tests’ to determine which beer may be best suited for them. BrewDog
also operates a subscription model, as their website allows the consumer to start a
subscription service for varieties of beers to be distributed directly from the manufacturer.
Furthermore, BrewDog’s vertically integrated supply chain allows them to purchase the raw
materials, process the materials into a product, and then to sell the product directly from their
own stores. This fuses elements of the manufacturer, distributor and retailer business model.

Conclusion:

This report has been collated with the intention to reduce the future risk of new competition
to BrewDog. Although BrewDog has been successful in achieving Blue Ocean market space,
it is likely that future market rivals will turn their Blue Ocean into a Red Ocean with
increasing fierce competition (Kim & Mauborgne, 2005). It is recommended that BrewDog
continues with the plans outlined in their published future strategic plans (BrewDog, 2020)
featuring its extensive expansion plans for its product range, consistently bringing out new
combination of flavours and strengths to appeal to as broad a consumer range as possible,
alongside the aggressive development of their branded location portfolio and U.S expansion.

However, the above strategies are not modern Blue Ocean thinking, merely an expansion of
what was Blue Ocean thinking in 2009. In order for BrewDog to continue to enjoy Blue
Ocean markets, they must diversify and do what competitors aren’t, and one way of
achieving this is the fusion of large scale music concerts & specialised craft beer festivals to
form a large scale music & beer-centric annual festival of culture.

BREWDOG | BUS020X618S

http://beatakalamar.com/blog/strategic-thinking/strategy-canvas

https://journals.sagepub.com/doi/pdf/10.1177/000812560504700301

https://link.springer.com/chapter/10.1007/978-3-540-77903-2_35

http://www.davidpublisher.org/Public/uploads/Contribute/5563f0411247b

https://www.jstor.org/stable/258088?seq=1#metadata_info_tab_contents

https://www.ibisworld.com/united-kingdom/market-research-reports/beer-production-
industry/

https://www.thecaterer.com/news/hotel/brewdog-sees-revenue-increase-by-more-than-50m-
in-2018

https://www.toolshero.com/strategy/business-model-canvas/

https://www.bbc.co.uk/news/business-30376484

http://www.diva-portal.org/smash/get/diva2:731696/FULLTEXT01

Why It’s Important to Build Customer Relationships

https://www.morningadvertiser.co.uk/Article/2017/10/23/The-price-of-BrewDog-craft-beer-
in-supermarkets

brewdog

BrewDog named UK’S fastest growing brand

https://qz.com/1737079/the-experience-economy-will-be-worth-12-billion-by-2023/

https://www.statista.com/statistics/752101/festivals-market-size-in-europe/

Value Innovation

https://sites.google.com/view/trizbm-en/business-models/55-01-aikido

https://www.strategyzer.com/canvas/business-model-canvas

Taman Powell

• managing innovation

by Sara Azim
managing innovation
GRADEMARK REPORT
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