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BOS Tools

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:

  • Which of the factors that the industry takes for granted should be eliminated?
  • Which factors should be reduced well below the industry’s standard?
  • What factors should be raised well above the industry’s standard?
  • What factors should be created that the industry has never offered?

For more articles on this tool,

Select from the icons below to learn more about the foundational frameworks of blue ocean strategy.
Red Ocean vs. Blue Ocean Strategy
Value Innovation
Visualizing Strategy
Strategy Canvas
Four Actions Framework
Six Paths
Pioneer Migrator Settler Map
3 Tiers of Noncustomers
Sequence of BOS
The Buyer Utility Map
The Price Corridor
of the Mass
Four Hurdles to Execution
Tipping Point Leadership
Fair Process