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Value innovation: a leap into the blue ocean

W. Chan Kim (The Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management at INSEAD. This article is based on their book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Harvard Business School Press, 2005).)
Renée Mauborgne (The INSEAD Distinguished Fellow and a professor of strategy and management at INSEAD. This article is based on their book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Harvard Business School Press, 2005).)

Journal of Business Strategy

ISSN: 0275-6668

Article publication date: 1 August 2005

Abstract

Purpose

This paper reports the results of more than a decade‐long research journey on how firms can go beyond competing to creating uncontested market space, or “blue oceans,” that makes the competition irrelevant.

Design/methodology/approach

Studies over 150 blue‐ocean creations in over 30 industries spanning more than 100 years from 1880 to 2000. Analyzes not only winning business players that created blue oceans but also their less successful competitors. Searches for convergence among the strategic moves that created blue oceans and divergence between these moves and those of less successful players caught in the red ocean of bloody competition.

Findings

Finds clear strategic patterns that united the strategic moves that created blue oceans and separated these from the strategic moves that left companies battling for incremental market share in red oceans of overcrowded markets.

Practical implications

This paper addresses the following key questions: How can companies create blue oceans in an opportunity‐maximizing, risk‐minimizing way? What makes the creation of blue oceans increasingly imperative? Why has the field of strategy to date paid scant attention to how to reconstruct market boundaries to open up blue oceans of uncontested market space?

Originality/value

This paper makes strides in filling a central void in the field of strategy. For the past 25 years the field of strategy has focused principally on how to build competitive advantages to beat the competition within established market boundaries. While important, with supply exceeding demand in more and more industries this often leads to a red ocean of bloody competition. Instead of battling rivals, companies need to go beyond this. They need to create blue oceans of uncontested market space to prosper in the future. This article gives an insight into how firms can achieve this.

Keywords

Citation

Chan Kim, W. and Mauborgne, R. (2005), "Value innovation: a leap into the blue ocean", Journal of Business Strategy, Vol. 26 No. 4, pp. 22-28. https://doi.org/10.1108/02756660510608521

Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited