Unlike blue ocean strategy, innovation is a very broad concept that is based on an original and useful idea regardless of whether that idea is linked to a leap in value that can appeal to the target mass of buyers. Take Motorola’s Iridium. Was it an innovation? Sure. It was the first global phone and it was useful. But was it a value innovation? No. As Motorola learned, a breakthrough in technology is not necessarily synonymous with a breakthrough in value that can attract the mass of target buyers. The Iridium was a useful technological feat that worked around the world, including the far reaches of the Gobi desert, but did not work in buildings and cars, the precise places that global executives on the move most needed them to work. It failed to create a leap in value for its target mass of buyers—business executives.
Like Motorola, many technology innovators fail to create and capture blue oceans by confusing innovation with value innovation, the cornerstone of blue ocean strategy. To capture a commercially compelling blue ocean, companies need a strategy that can align their value, profit, and people propositions in pursuit of both differentiation and low cost. When organizations fail to register the difference between value innovation and innovation per se, they often end up with an innovation that breaks new ground but does not unlock the target mass of buyers, keeping them by and large stuck in the red ocean.