W. Chan Kim and Renée Mauborgne
Summary: Blue Ocean Strategy lays out a case for innovation focused on finding a new non crowded competitive space or “Blue Ocean. This is an active strategy to avoid commoditization of goods and services. A “Red Ocean” is the normal competitive space where products with very similar features are competing mostly on price.
Value innovation is recommended to focus on both value creation while aligning practical utility, price, and cost positions. It rejects the premise that low cost and differentiation are mutually exclusive product strategies and recommends simultaneous pursuit of both to achieve a leap in value for both customers and the innovator. The key tool presented in the “strategy canvas” is to develop a graphical value curve depicting a company’s relative performance across the factors of competition. Blue Ocean Strategy presents a series of compelling examples of how companies have innovated out of their industries’ red ocean and into a new space they cof the INSEAD Blue Ocean Institute.
InnovaSpec Recommendation: Blue Ocean Strategy is a very important strategic foundation for innovation management and a recommended read for anyone working to improve innovation results. However, the book tends to look at industries and broad categories in strategic terms versus providing tools to improve innovation project results. InnovaSpec believes that this is where the book Value Innovation Works picks up to offer specific tools based on the Blue Ocean principles for application to innovation improvement.