The Impact of Creating Blue Oceans
? In the Kim and Mauborgne study of the launches of 108 companies, 86% = line extensions ( or Red Oceans)
? However, these only accounted for 62% of total revenues and 39% of total profits
? The other 14% of launches were aimed at creating blue oceans and accounted for 38% of revenue and 61% of total profit
The Profit and Growth Consequences of Blue Oceans
Move to an emphasis on strategy
? The company is not the correct start point for blue oceans.
? Blue Oceans focus on the strategic initiatives rather than company or industry tradition.
? This book focuses on 150 strategic moves made from 1880 to 2000 in various industries.
? Blue Oceans were found in: new and existing firms, attractive and unattractive industries, and the private and public sector.
Value Innovation: The Key to Blue Ocean Strategy
? Value creation improves value to customer but does not make firm stand out.
? Innovation alone does not create demand
? Value innovation occurs only when companies align innovation with utility, price, and cost positions
? Value innovation:
– Makes the competition irrelevant
– Creates a step in value over competition and for customers
– Opens up new and uncontested market space and segments
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