Blue Ocean Idea: Elderly Transportation Services

[AFAdam]

My current class is focused on blue oceans; or making the competition irrelevent by finding and exploiting new market space by introducing something not currently offered within a industry segment. I will focus on providing personal transportation, similar to a taxi/shuttle service, to the large number of growing baby boomer disabled or elderly that will otherwise not be able to drive. I would appreciate any feedback or criticism...

In the sequencing of my idea for a company that specializes in the private transportation of elderly, disabled, or otherwise unable to drive persons I would follow the guidance for the Blue Ocean material that describes the steps of buyer utility, price, and adoption. (Kim & Mauborgne, 2005)

First is buyer utility. The utility of this service is offering mobility to the aging baby boomer group after they can no longer drive. Unlike the current group of elders, the baby boomer group is more socially connected driving a larger market of those who will continue to get out in older age. Further utility comes from the availability, convenience and customer focus that this specific of transportation can provide.

The second factor of sequencing is price. Price for this service will not only be attractive when viewed against the alternatives, but will also be different than what is commonly available in different sectors of this industry. Price will be above that of public transportation and normal taxi service, but well below that what is expected from limousines or business oriented high end services. The cost structure will also be different than what is used today in the fact that prices will be set monthly and have different structures based on use. The ability to charge a higher price and the intended price structure will be similar to leasing a vehicle. Those that cannot drive will not have a vehicle payment, yet commonly have more free revenue. A leasing structure will be both affordable and provide value for what service is given.
Pricing leads to costs. In order to make a profit costs must be less than revenues. Costs can be minimized through leasing of vehicles and online automated scheduling. Other costs would be licenses and insurance, as well as wages to drivers. Still there will be good room for revenue because unlike a price structure that charges only on usage, this structure will charge monthly rates based closer to leasing rates of a normal vehicle.

Hurdles to this business concept are few, but are present. The first is that most cities only allow so many licenses for public transportation. Another hurdle would be marketing and introduction into the market. Be it that nothing like this is currently available; it would take effective marketing and consumer education to be accepted.

Works Cited:
Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: how to create uncontested market space an dmake the competition irrelevant. Harvard Business School Press.

[ksam]

I'm a big fan of blue ocean strategy. I don't feel too confident about the proposed idea tho. Those who are not able to drive but are still relatively healthy (can walk without a walker) do not need your service. They can just take the taxi at a cheaper price. There are certain elderly who might need more assistance in transportation. However, I assume you'll need to have sufficient medical devices and a nurse/assistant on the vehicle to help the elderly getting on and off the car. You also need to allow them to use your vehicles enough to justify the price (I'm assuming it is around $400-$500 a month?). For that price, you'll have to cover the costs of leasing the vehicles, insurance, online scheduling system in addition to the medical devices and nurses that you need. I'm not sure the price is enough to cover that. Finally, this is taken from my grandma who can't walk without a walker. She doesn't really want to go out anymore since it is too much hassles. There is market consideration that you need to think about too.

Good work tho! I do like your thinking in coming up with this idea!

Sam