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Value innovation occurs when a company aligns innovation with utility from "summary" of Blue Ocean Strategy, Expanded Edition by W. Chan Kim,Renée A. Mauborgne
Value innovation is at the heart of blue ocean strategy. It is about pursuing both differentiation and low cost simultaneously. This is contrary to conventional wisdom which advocates a trade-off between the two. Value innovation is created not by technological innovation alone, nor by customer focus alone. Instead, it arises when a company aligns innovation with utility. This means that the innovation must be focused on creating value for both the company and its customers. When a company aligns innovation with utility, it is able to break the value-cost trade-off. This allows the company to create a leap in value for both itself and its customers. By focusing on utility, companies can uncover new opportunities for innovation that have not been explored before. This can lead to the creation of new markets or the transformation of existing markets. By aligning innovation with utility, companies can create uncontested market space where competition becomes irrelevant. Value innovation is about making the competition irrelevant. By aligning innovation with utility, companies can create a unique value proposition that sets them apart from competitors. This value proposition is not just about offering more for less, but about offering something different that resonates with customers. This is what allows companies to break out of the red ocean of competition and create a blue ocean of uncontested market space.- Value innovation occurs when a company aligns innovation with utility. This allows companies to break the value-cost trade-off and create uncontested market space. By focusing on creating value for both itself and its customers, a company can differentiate itself and achieve low cost simultaneously. This is the essence of blue ocean strategy.
