As per the research of Ramli, Ahmad and Harith, (2016) the cornerstone of the blue ocean strategy is "value innovation," while value innovation is the simultaneous pursuit of differentiation and low cost, creating value for both the buyer, the company and its employees, thus opening up … Not every innovation will represent a value innovation. ∗Achieved via the delivery of features that have a highest marginal benefit to customer needs . Value extraction is a red ocean strategy where a company tends obtain unfair advantages in market. A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created.. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. Value innovation means creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. Cirque du Soleil … Value innovation is achieved only when the whole system of utility, price, and cost is aligned. 3 Examples Of Blue Ocean Strategy. 2. Although blue oceans enable a firm to gain uncontested market space, it is only for a time that this is so. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. The authors, Chan Kim and Mauborgne, articulate a framework called Value Innovation to guide this shift in transition from red to blue oceans. Equally, if not more importantly, it provides analytical frameworks and tools that allow companies to create and capture value in blue ocean strategic manner. This is the cornerstone concept of Blue Ocean Strategy and Blue Ocean Shift – international bestselling books by world-renowned professors W. Chan Kim and Renée Mauborgne. Keywords: Blue Ocean Strategy, Organizational Performance, Red Ocean Strategy, Value Innovation, Creative Competition I.Introduction The business world is now very competitive. Blue Ocean Strategy Examples & ROI - You Are Reading This Article ... Profitworks is a company built on the values of integrity, hard work, doing things better than they have ever been done before and the utmost commitment to our customers. Marketing has to make people aware of the "value innovation." Blue ocean strategy and value innovation Competing in over crowded industries is no way to sustain competitive advantage. f Blue Ocean Strategy is: " a creative battle where the players of a particular segment dont compete with each other remaining in the same market space; instead explore, create and acquire new market spaces by dealing with new demand through the principle of 'value innovation '." Value innovation is the backbone of a Blue Ocean Strategy. She is coauthor, along with W. Chan Kim, of Blue Ocean Strategy, Expanded Edition (2015).For more, read … Introduction “Why are some successful companies gaining high growth, and others lack success?” (Kim & Mauborgne, 1998). In their book "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant" they distinguish "blue oceans" from "red oceans". Rather, blue ocean strategists followed a different strategic logic that value innovation is the foundation of blue ocean strategy. Companies fight for the customer share where their customers are. Value Curves Blue Ocean Strategy. A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. Value Innovation – the Secret Sauce of Blue Ocean Strategy The cornerstone of Blue Ocean Strategy is creating value innovation – creating a leap in value for both the business and its customers, thereby opening up new and uncontested market space. Winner of the Standing Ovation Award for “Best PowerPoint Templates” from Presentations Magazine. Value Innovation Group works with leaders and their teams to discover new blue ocean opportunities by applying the market-proven tools and processes of Blue Ocean Strategy and Blue Ocean Shift. The decision makers of the business are changing their strategy to sustain in the competitive business world. Chapter 4: Research findings 4.1Companies using Blue Ocean strategy 4.2Previous thoughts who led to the idea and the practice of Blue Ocean strategy The book Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne, introduces the term value innovation, focused on making the competition irrelevant through the creation of new leaps in value. Figure 2: Four actions framework (Kim & Mauborgne, 2016b) as applied to Circus du Soleil. When you talk of value innovation, you need to reduce costs, increase buyer's value, and you have to see that cost structure is lowered through eliminating and reducing factors an industry competes on, but buyers do not value it highly. The firm can charge a higher price than the cost leaders. A key aspect of the Blue Ocean Strategy is the concept of value innovation which as originally presented by the two authors in the 1997 article “ Value Innovation – The Strategic Logic of High Growth ” (HBR 75: 103-112). The Blue Ocean Strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. The concept of the value curve is a key concept that can be applied directly to compare your offering to one of your competitors, helping you to visualize potential opportunities for blue … Blue Ocean strategy is a strategic management theory coined by Kim and Mauborgne in 2005 which focusses on creating value for a business through creation of new markets and exploring unchartered markets instead of competing in existing markets (Kim & Mauborgne, 2004). Value innovation for healthcare. The term value curve appears in three key Harvard Business Review articles by W. Chan Kim and Renee Mauborgne, as well as their 2005 book – Blue Ocean Strategy. Value innovation is distinctively different from the competitive strategic approach that takes an ... Blue ocean strategy doesn’t aim to out-perform the competition. (1.4) Complimentary existence together of the red and blue oceans innovation. The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the... Yellow Tail. Blue Ocean Strategiespresents a systematic approach to making the competition irrelevant and outlines principles and tools any Hotels can use to create and capture their own blue oceans. This article is Part 2 of a review of the concept of Blue Ocean Strategy for Travel Agents. World's Best PowerPoint Templates - CrystalGraphics offers more PowerPoint templates than anyone else in the world, with over 4 million to choose from. Ultimately, the Blue Ocean strategy encourages organisations to think about a differentiated strategy. It aims to make the competition irrelevant by reconstructing industry boundaries. These are the: Blue Ocean Strategy Canvas. Contemporary in the Great Depression of 1929, Joseph Schumpeter, a German economist, highlighted the driving force behind Made by Group D of the Minor Global Trendwatching 2015 A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Parts one and two can be found below: Part 1: Blue Ocean Strategy -- Finding and Exploiting Uncontested Markets. Figure 1: Value Innovation framework by Kim and Mauborgne (2016e) from the Blue Ocean Strategy website. When pursuing value innovation, managers must answer questions focused on which of the following? The cornerstone of this type of strategic thinking is what is called value innovation. your competitor).. To create a strategy canvas for your start-up, follow these steps: Draw a large graph with one horizontal and one vertical axis. The objective of this note is to help students understand the criteria according to which they can identify value innovations, that is, products or services suitable for implementation of a Blue Ocean Strategy. The term Blue Ocean Strategy was coined in 2005 by the two economists W. Chan Kim and Renée Mauborgne. Which of the following are pricing options offered by a blue ocean strategy ? Value innovation is the alliance of innovation with price, utility, and cost positions. The example provided in this book of a company that effectively utilized value innovation was the Cirque du Soleil. VI is closely connected to the Four Actions Framework (FA), as defined by Kim and Mauborgne (2016b) as the latter expands VI, which can be seen in Figure 2. Those differences determine which W. Chan Kim and Renée Mauborgne are Professors of Strategy at INSEAD and Co-Directors of the INSEAD Blue Ocean Strategy Institute.They are the authors of Blue Ocean Strategy, which has sold over 3.6 million copies and is recognized as one of the most iconic and impactful strategy books ever written. Blue Ocean Strategy enables a fundamental transformation in mindset. The authors of Blue Ocean Strategy point out participants in red ocean markets all follow a conventional approach. Traditional Competitive Strategies. Boston: Harvard Business School Publishing, 2005. The Blue Ocean Strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. Kim and Mauborgne use Casella Wines' Yellow Tail line of wines as an example of a successful blue ocean strategy. Perceived value is created by marketing. “Value innovation requires companies to orient the whole system toward achieving a leap in value for both buyers and themselves.”. Does Blue Ocean work?