Introduction to blue ocean strategy
Value Innovation
Simultaneously increasing value for customers while reducing costs: The concept of value innovation is developed by Chan Kim and Renée Mauborgne and is the cornerstone of market-creating strategy. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price, and cost is aligned.
The Strategy Canvas
Strategy Canvas is a central diagnostic tool and an action framework for building a compelling blue ocean strategy. It graphically captures, in one simple picture, the current strategic landscape and the future prospects for an organization. Developed by Chan Kim and Renee Mauborgne, the strategy canvas is a one-page visual analytic that depicts the way an organization configures its offering to buyers in relation to those of its competitors.
The Four Actions Framework
Eliminate, Reduce, Raise, Create – to reshape market boundaries.
The Four Actions Framework developed by Chan Kim and Renée Mauborgne is used to reconstruct buyer value elements in crafting a new value curve or strategic profile. To break the trade-off between differentiation and low cost in creating a new value curve, the framework poses four key questions, shown in the diagram, to challenge an industry’s strategic logic.