Managing Innovation: Blue Ocean Theory and Business Model Canvas

This report discusses the application of Blue Ocean Theory and Business Model Canvas in managing innovation at Lime, an organization providing affordable mobility. It covers Lime's historical and future development, advantages and disadvantages of the theories, and their principles and processes. The report also includes a table of contents, introduction, conclusion, and references.

Managing innovation

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
INNOVATION THEORY.........................................................................................................3
Describing definitions, principals and processes along with evaluation of the theory..........3
Application of the Innovation Theory in the historical development....................................6
Application of the Innovation Theory in the future development..........................................8
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Innovation management refers to the systematic implementation of the innovations
within an organization and also involves the tasks of planning, organization, management and
control. It mainly deals with the measures in regard to promoting innovation in an
organization and generating benefits, for instance, new products or the services which will
help in conquering the new market and helps in standing out of the competition. In addition
to this, it helps in improving the internal processes which helps in strengthening the
organization’s from within or in regard to saving cost. In this report, LIME is taken as an
organization which is into providing affordable mobility through the distribution of shared
scooters, bikes or the transit vehicles. In this report, an insight is being drawn n the two
innovation theories which are blue ocean theory and the business model canvas and its
application in the historical and future development of the company.
INNOVATION THEORY
Describing definitions, principals and processes along with evaluation of the theory
Innovation is the process of conducting particular brand new idea, products and
services. In the current ear, implementing innovation theories becomes crucial to have
significant functioning of company in the industry. This comprises two strategy such as blue
ocean and business model canvas.
Blue Ocean Theory (BOM)
It is concerned with the adopting differentiation & low cost in the market so that
demand can be created. In addition to this, this particular theory can help Lime to make
competition irrelevant by capturing uncontested market.
The specific theory has principle of restructuring the market boundaries, focusing on
larger picture not numbers. In addition to this, it comprises reaching beyond the existing
demand for achieving higher market share. Blue Ocean Theory (BOT) ensures that company
has viable business model to produce & maintain profitable growth and development.
Overcoming key organizational hurdles through executing leadership via giving emphasis on
risk of company. BOT has the principle of ensuring that company its building and executing
the procedure in fair manner.
It is very systematic procedure that provide guidance to organization regarding the
conducting the innovation. It comprises few steps that provides assistance to company to
push the boundaries to cover the market to make the competition irrelevant (Namboodiri,
Banerjee and Dasgupta 2019). In addition to this, in the current era, implementing BOT can

provide more benefits to company to overcome challenges obtaining in the path of success. It
can help the firm to find the leadership framework by concentrating on four factors such as
eliminated, reduced, raised and created to achieve positive impact. Eliminating gives
knowledge of factors that are already completed in industry can be removed, raising refers to
encouraging to reach sector standards. In addition to this, creation is concerned with
implementing the course of actions that has not been offered to customers in industry.
Reducing is declining elements that are below sector standards. This provides ability to have
new value curve for getting stability. Blue ocean creation for accomplishing the objective by
executing six path framework. It aids firm to focus on looking across alternative industry and
strategic groups within sector. Redefining industry buyers group for removing the
competition. The next step of creation of blue ocean theory is to determining scope of
products and services offerings. It can be exerted by looking for complementary goods to
fulfill requirement of strategy to attain the goal of having appropriate innovation. BOT
rethinks functional and emotional orientation of sector and taking time for shaping external
trends to attract larger customers. The sequence of assessing exceptional buyers utility,
prices, cost that is capable of targeting profit at offered strategy and hurdles in adopting
business idea.
Advantages
 This specific theory of innovation cooperates with organization to find uncontested
markets and neglecting the matured & saturated segments. It allows the customer to
select between differentiation & low expenditure theorem.
 Blue ocean strategy aids firm to move from impediments of competing within
prevailing sector & cost pattern and give focus on constructive value modifications
(Yunus and Sijabat, 2021). In addition to this, eth analysis obtained is utilized to
eliminate traditional approach and industry market force of demand.
 Company achieves the ability to execute value innovation through concentrating on
price strategy, utility and cost position. The fundamental transformation becomes
possible by having capacity of recognizing appropriate opportunities.
Disadvantages
 It is becomes difficult for the organization to identify the untapped market by
formulating futuristic ideas and plans. The procedure of blue ocean theory is
concerned with extensive research which involves large detailed analyzing that makes
the current practicing complex.

 There is involvement of higher risk that can lead to greater cost for enterprise. The
reason behind it can be unawareness regarding the introduced idea and non
acceptance perception of selected segment target audience.
 Blue ocean model of innovation can be expensive as it requires higher concentration
on explaining tradeoffs, workforce & challenges which makes it lengthy procedure
that is one of the biggest con of it.
Business Model Canvas (BMC)
This model of innovation helps aids the company to address requirement of all its
overall customers segments. It is basically visualizing, assessing and altering business
model & creates along with capturing value delivered.
The principles of this specific theory of innovation comprises key partners,
activities, resources, value propositions, customer relationships, segments, channels and
cost structures (Iheanachor, David-West and Umukoro, 2021). In addition to this, it has
principles of giving larger emphasis on mentioned aspect in corrective manner so that
better approach of innovation can be implemented.
BMC in Lime company can be exerted by following the certain steps as below to
derive goals of company to function in smooth manner. It provides larger emphasis on
the four main areas such as infrastructure, offerings, customers and financial viability.
The business model for the concerned organization can be developed by forming nine
building blocks which includes value preposition, channels, venture streams, key
resources, etc. which helps in assessing the detailed information (Business model
canvas, 2021). It includes the key partnerships by giving details of who are the main
parties, key resources from theses, crucial activities related with it. Identifying the key
practices of organization which provides assistance in identifying the crucial components
to do revenue streams, customer relationships, proposition channels. It becomes easy fro
the enterprise to recognize the essential parts of company which are required to taken
into consideration for having proper innovation procedure.
In its none block value preposition is associated with assessing what type of
products are provided by Lime to its customers, which form of problems are tackled and
offering for each targeted segment (Müller, 2019). Customer relationship part of
Business Model Canvas is related with recognizing which kind of behavior is expected by
customer segment, cost of maintaining these form of dealings, pattern of integrating it
with rest of business model. Customers segment information and how to formulate value

for client can be checked with help of BMC. Key resources & channels required to meet
the decided course of action for achieving most efficient practicing in specified
company. The blocks regarding cost structure through specifying important areas
incurring larger share of expenditure. With help of BMC it becomes possible for the
organization to ascertain the price customers are ready to pay and assessing how much
each gain stream contribute to overall revenue.
Benefits
 It aids the firm to gain competitive edge in industry by evaluating relating factor
contributing to success so that proper implementation of innovation can be exerted
effectively.
 Focused and speed & agility factors can be derived by having this specific business
model in organization.
 Assessing feedback to improve each segment of firm becomes possible by
implementing the BMC in company procedure. Lime will be able to get these
mentioned benefits by implementing it into company’s innovation activity.
Drawbacks
 Once the business model is formulated then BMC restricts to implement new ideas
for the product as well this does not accommodate businesses in very early step of
development
 This business model canvas enables risky assumptions without offering a clear way to
verify them (Sudrajat and et.al., 2018). It is highly time consuming procedure that
due to highlighting each part of activities in detailed manner.
 The strategy describing is found to be lack here and that may create chances of
increasing inaccurate results. There is deficiency of power to guide company in
making business decision. This is one of the crucial limitation of the business model
canvas ineffective.
Application of the Innovation Theory in the historical development
Company background
Founded in the year 2017, Lime is into providing affordable mobility. The mission
of the company is to foster people 1st cities through the way of empowering the residents
with more affordable, reliable and the sustainable transportation options. The company is the

global leader in the micromobility, its partners with the cities in order to deploy electric bikes
and scooters which is having GPS and self-activating locks (About Us. 2021). The company
is powered by the over 200 million rides in across 120 cities in the 5 continents which
spurring the new generation about the clean alternatives to the car ownership. The company
operates in the industry of Information Technology and Services and the company size is
501-1000 employees. Lime is having the headquarter in San Francisco, California, US. The
man specialty of the company is its urban planning, MAAS, technology, Mobile application
Historical development
The company launched its business in June 2017 with 125 bicycles. Later, the
company expanded it business in July 2017 to the other cities like Key Biscayne, South Lake
Tahoe Florida, Indiana, and South Bend. In 27 July 2017, it launched additional 500 bicycles
in Seattle, Washington which resulted into making it the city’s 2nd bikeshare operator. In
October 2017, the company actually closed its series B round of venture funding when it
announced about its valuation to be $225 mn. And additional $335 mn funding in the year
2018 consequently led to the valuation of the $1.1 bn making it a unicorn. Along with that,
the company announced at CES 2018, that it has begun the trial of electric vehicles and in the
following month itself, Lime-S electric model was announced. Later in the same year, the
company, made an announcement in respect to its plan of to start the development of transit
pods, small self-driving e-vehicles. Lime applied for car-sharing allowance in Seattle and the
launched the service in December with a fleet of Fit 500 lounge cars which were classified as
“LimePod”. Later in an incident, where 2-year-old died created a challenge for the company,
the Lime introduced a new model of e-scooter having larger wheels along with the built-in
suspension and extend vehicle life. In 2019, it predicted as loss of $300 mn and in 2020, it
laid off nearly 100 employees which accounts for the 14% of workforce and ended its
services various markets. In May 2020, the company acquired Jump e-bike and scooter
business from Uber along with the funding from Uber of nearly $170 mn. In April 2021,
Lime is listed in the Times100 most influential companies.
Blue ocean innovation is being applied by Lime as the actions and strategies of the
company affected its cost structure and also its value proposition pertaining to the multiple
users, students, professionals. This multichannel approach has helped in generating revenue
from various customer segments. This results into making itself unique from others a sit
mainly aims at reducing the dependence of the people on the personal automobiles for the
short distances transportation and helps in leaving the future generation with the cleaner and
the healthier planet. What sets it apart from the other similar companies is that it has diverse

workforce which is committed to sustainable micro-mobility experience. Lime hrs locally and
the partners with the neighbourhood organization for cultivating and improving urban living
(Karaoulanis, 2018). Another historical benefit Lime offers is the benefits it adds to the riders
using bicycle which helps in the economic growth and in keeping the carbon footprint,
therefore, contributing towards the well-being of the environment. But on the other hand,
there certain ethical issues in respect to the fact that their workers are not considered as an
employees and employment is provided on a contractual basis and various other activities are
carried out the independent suppliers who are having very few rights. While in all other
aspects, the company have effectively made use of differentiation strategy and also lowers the
cost in order to expand to the untouched market resulting into making competition irrelevant.
Thus, through Blue Ocean innovation theory, the company has achieved historical growth
and development.
Application of the Innovation Theory in the future development
Future development
In respect to the future development of the company, the Lime has announced a
partnership in order to integrate its electric scooters, bike and mopeds into its Moovit trip
planning appl. It is being intended that in august 2, the Lime’ vehicles will be added to the
travel option with the public transit in respect to either all or a part of the multimodal journey
on the Israeli app. In addition to this, in its expansion plan, The Lime vehicles will be shown
in Moovit in 117 cities all across the twenty continents which will involve US, S. America,
Australia and Europe. As per Lime this partnership is the largest micromobility integration in
an app which is fully inclined towards the mobility as a service (MaaS) in respect to the
number of cities involved (Moovit integrates Lime electric scooters, bikes, mopeds into
transit planning app. 2021). The company plans to add in 40 new cities. This partnership
among Lime and Moovit, which is actually a subsidiary of Intel’s Mobileye, use to follow
transportation world trend which integrates the public transit & and micromobility into an
optimised system. Few public travel offices, as St. Louis Metro Transit, that have
encountered a decrease in ridership trust guiding clients to outsider applications that spread
out various types of versatility would ultimately bring it back. Others may very well consider
joining forces as a way to get workers out of the vehicles, giving them consistent choices for
voyaging that last mile from home to the train station without adding anything to the carbon
footprints.
As per Moovit's COVID-19 mobility report, public travel is back on the ascent in
huge urban cities such as New York, Paris and London, which is presumably why Lime

needs to take advantage of the market now and tap into the market. Last month in June 2021,
41% of Lime's bike rides were taken during top driving hours, as indicated by information
from the organization, which likewise also states that a verifiable information has shown a lot
of Lime rides associating riders with public travel.
In the initial years, the company performed well but this changed drastically in these
4 years which is mainly due to the emergence of competition in the market which has resulted
into increase in the price of availing the services. Therefore, the blue ocean has been turned
into red ocean.
Apart from this, business model also provides or depicts the logic of how the firms
captures, delivers and generates value. This is the ongoing and continuous process which is a
part of any business strategy. The Blue Ocean Strategy and the business model canvas both
are aimed at pursuing cost reduction and the creation of value for the buyers (Alam and
Islam, 2017). Business model identified for Lime is the model of affiliation as it supports or
in partnership with public transportation and for the company its focus is to support their
partners which results into making it easy for the company in providing services to the target
customer segment (Lime says it will spend $50 million on a huge e-bike expansion. 2021). In
addition to this, aikido is also determined for Lime as this value proposition helps in grabbing
customers who actually prefers ideas and concepts as against to the mainstream which is also
known for using blue ocean strategy as well. Another very important business model on
which Lime mainly depends on is its e-commerce model, as its services are being offered
through online channels, thus, assist in eliminating unnecessary cost in relation to running a
physical store or infrastructure. For future, Lime must consider more open business model
which would allow more collaboration with key partners resulting into creating more value.
Lime future business model canvas for 2021 onwards
KEY PARTNERS KEY ACTIVITIES KEY RESOURCES
 Owner
 Medium sized
suppliers
 Tech partners
 Commercial partners
 Continued expansion
 Operational excellence
 Improving existing value
proposition
 Sales to key account
 Medium sized suppliers
 Data assets
 Technology assets
 Digital assets
 Brand
VALUE CUSTOMER RELATIONSHIPS CHANNELS

PROPOSITIONS
 Custom ride
 Low-cost structure
 Sustainability
mobility for everyone
 Cash free
 Vehicle on demand
 Affordable e-bikes
and vehicles
 Safety, security and privacy
 Pricing
 Highly automated
 Eco-friendly
 Mobile apps
 Social media marketing
 Discounts, promo
 Website
 Blog
 Direct contact
CUSTOMER
SEGMENTS COST STRUCTURE REVENUE STREAMS
 People of all age
group and medium to
high income group.
 Transport companies
 Firms
 Working
professionals,
students
 Urbanities
 Platform development
 Sales and marketing
 Salaries
 Components
 Plant
 Overhead cost
 R&D
 Pay per ride charges
 Surge Pricing
 Sale of Moovit trips
CONCLUSION
It can be summarised from the above analysis that the managing innovation is not an
easy task before implementing any of the new idea it become essential to effectively
understand the implication of it on the business growth and development. In this report, the
basic understanding of the innovation theory is being carry out which helped in gaining
knowledge about the pros and cons of each of the theory and later in the report, the historical
development of company is analysed along with the application of the innovation theory. Th
past development of the company analysed with reference to the innovation theory. In
addition to this, the future plans of the company is determined through various sources based
upon the business model canvas for the future development of the firm was created. This
report provides detailed and in-depth information about the key aspects which the businesses
are required to considered in the process of growth, expansion and development of the
business.

REFERENCES
Books and Journals
Alam, S. and Islam, M. T., 2017. Impact of Blue Ocean Strategy on Organizational
Performance: A literature review toward implementation logic. IOSR Journal of
Business and Management. 19(1).
Iheanachor, N., David-West, Y. and Umukoro, I. O., 2021. Business model innovation at the
bottom of the pyramid–A case of mobile money agents. Journal of Business
Research, 127, pp.96-107.
Karaoulanis, A., 2018. Strategic transformation and innovation towards Blue Ocean creation
in a changing corporate reality.
Müller, J. M., 2019. Business model innovation in small-and medium-sized enterprises:
Strategies for industry 4.0 providers and users. Journal of Manufacturing
Technology Management.
Namboodiri, S., Banerjee, S. and Dasgupta, H., 2019. A coherent metasynthesis of blue ocean
strategy (bos) using grounded theory approach. Academy of Strategic Management
Journal. 18(4). pp.1-18.
Sudrajat, J and et.al., 2018. Innovation of entrepreneurship learning with business model
canvas game. International Journal of Entrepreneurship, 22(3), pp.1-12.
Yunus, M. and Sijabat, F. N., 2021. A Review on Blue Ocean Strategy Effect on Competitive
Advantage and Firm Performance. Academy of Strategic Management
Journal, 20(1), pp.1-10.
Online
About Us. 2021. [Online]. Available Through:< https://v1.li.me/about-us>.
Business model canvas. 2021. [Online]. Available through:
<https://www.businessmodelsinc.com/about-bmi/tools/business-model-canvas/>.
Lime says it will spend $50 million on a huge e-bike expansion. 2021. [Online]. Available
Through:< https://www.theverge.com/2021/3/1/22303364/lime-ebike-expansion-
new-cities-50-million-investment>.
Moovit integrates Lime electric scooters, bikes, mopeds into transit planning app. 2021.
[Online]. Available Through:<https://techcrunch.com/2021/07/26/moovit-integrates-
lime-electric-scooters-bikes-mopeds-into-transit-planning-app/>.