![]() Importantly, value innovation is not something as “value-cost trade-off”. ![]() If they fail to support innovation with value in this way, technology innovators and market pioneers often breeds ideas that other companies exploit. Value innovation happens only when companies align innovation with utility, price, and cost positions. Innovation without value usually is technology-driven, market pioneering, or futuristic, often aiming beyond what buyers are ready to accept and pay for. Value without innovation tends to focus on value creation on an incremental basis, something that improves value but is not sufficient to make you differentiated in the marketplace. Value innovation places equal emphasis on value and innovation. Value innovation means creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. Rather, blue ocean strategists followed a different strategic logic that value innovation is the foundation of blue ocean strategy. The creators of blue oceans, surprisingly, didn’t use the competition as their benchmark. The companies caught in the red ocean followed a conventional approach, aiming to beat the competition by building a defensible position within the existing industry order. What crucial in creating blue oceans is approach to strategy. Blue Ocean Strategy – Foundation of Blue Ocean Strategy As competitive markets become increasingly cut throat, management will need to be more concerned with blue oceans than the current group of managers is habitual to. There is no clear evidence of an increase in demand worldwide, and statistics even point to declining populations in many developed markets.Īll these forces in combination have created accelerated commoditization of products and services apart from increasing price wars, and shrinking profit margins.Īll this advocates that the business environment in which most strategy and management approaches of the twentieth century evolved is increasingly disappearing. The trend toward globalization paves way for reduction in trade barriers between nations and regions and as information on products and prices becomes instantly and globally available, niche markets and havens for monopoly continue to fade away.ģ. ![]()
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