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Cost innovation – a value-creation strategy to transform over-priced industries

Brian Leavy (Brian Leavy is an emeritus professor of strategy at Dublin City University Business School (, a Strategy & Leadership contributing editor and author of “Value innovation and how to successfully incubate “blue ocean” initiatives,” Strategy & Leadership, Vol.46, No.3, 2018)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 13 November 2018

Issue publication date: 11 December 2018




This masterclass examines how two important new books propose to achieve cost innovation, a value creation strategy that can transform an over-priced industry.


In their book, marketing gurus Stephen Wunker and Jennifer Luo Law highlight the potential of cost innovation in helping to create new market demand and transform the competitive dynamics in any industry sector, and they offer guidance on how to develop such a strategy. In their study of transformation by value creation, Professors Vijay Govindarajan and Ravi Ramamurti highlight the potential for cost innovations in emerging markets to help transform health care delivery in the West.


The authors showcased in this masterclass demonstrate how the value-based principles highlighted by Porter and Christensen and Kim and Mauborge are key to transforming any industry to make it more reliable, accessible and affordable.

Practical implications

Cost innovation involves taking a fresh approach to the conventional way of delivering value in any given industry and looking for ways to reimagine it.


The notion of cost as a potential target for breakthrough innovation in its own right is still not widely recognized. As marketing consultants Wunker and Luo Law point out in Costovation: innovation and cost are still most often seen as “magnetic opposites,” the one in natural tension with the other. They set out to challenge this assumption and show how “innovation and cost-cutting” can become “a powerful duo, capable of reshaping markets and creating long-term competitive advantages.”



Leavy, B. (2018), "Cost innovation – a value-creation strategy to transform over-priced industries", Strategy & Leadership, Vol. 46 No. 6, pp. 3-13.



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