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Value Innovation

Value innovation, the cornerstone of blue ocean strategy, is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. 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.

Break the value-cost tradeoff by answering the following questions:

  • What factors can be eliminated that the industry has taken for granted?
  • What factors can be reduced well below the industry’s standard?
  • What factors can be raised well above the industry’s standard?
  • What factors can be created that the industry has never offered?


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