#valueinnovation #blueoceanstrategy By reading Blue Ocean Strategy (2005) you can learn in details how value innovation can be created. Value innovation is often defined as the result of a blue ocean strategy but is value innovation identifiable before or after a strategy was executed? This has been a question for critics of the Blue Ocean Strategy. Is value innovation strictly the result of a Blue Ocean Strategy? Can other types of strategies generate value innovation? Let us attempt at defining what value innovation is first, using strictly the technical definition, in a few lines only: - It is the convergence of "Cost savings made by eliminating and reducing the factors an industry competes on." (VALUE) and; - "Buyer value lifted by new and better elements the industry never offered." (INNOVATION)
Source: © Chan Kim & Renée Mauborgne. All rights reserved.
Value innovation challenges the value-cost trade-off
It is the pursuit of differentiation AND low costs. The formula is: (A) Exceptional Buyer Utility + (B) Price accessible to mass of Buyer + (C) Good margin (price-cost) for the business + Solved Adoption hurdles =Commercially viable Blue Ocean Strategy idea.
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