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Blue Ocean Strategic Moves

Novo Nordisk

Novo Nordisk, the Danish insulin producer, created a blue ocean in the insulin industry by challenging the industry’s conventional wisdom about which buyer group to target. By looking across buyer groups, it gained new insights into how to unlock a leap in value for a previously overlooked set of buyers.

Insulin is used by diabetics to regulate the level of sugar in their blood. Historically, the insulin industry, like most of the pharmaceutical industry, focused its attention on the key influencers: doctors. The importance of doctors in affecting the insulin purchasing decision of diabetics made doctors the target buyer group of the industry. Accordingly, the industry geared its attention and efforts to produce purer insulin in response to doctors’ quest for better medication.

The issue was that innovations in purification technology had improved dramatically by the early 1980s. Novo itself had already created insulin that was a chemically exact copy of human insulin. As long as the purity of insulin was the major parameter upon which companies competed, little progress could be made further in that direction and competitive convergence was rapidly occurring.

Novo Nordisk, however, saw that it could break away from the competition and create a blue ocean by shifting the industry’s longstanding focus on doctors to the users – patients themselves. In focusing on patients, Novo Nordisk found that insulin, which was supplied to diabetes patients in vials, presented significant challenges in administering. This led Novo Nordisk to the blue ocean opportunity of NovoPen, the first user-friendly insulin delivery solution that was designed to remove the hassle and embarrassment of administering insulin. Patients could take the pen with them and inject insulin with ease and convenience without the complexity and social embarrassment of syringes and needles.

To dominate the blue ocean it had unlocked, Novo Nordisk followed up by introducing NovoLet, a pre-filled disposable insulin injection pen with a dosing system that provided users with even greater convenience and ease of use. And it later brought out the Innovo, an integrated electronic memory and cartridge based delivery system.

Novo Nordisk’s blue ocean strategy shifted the industry landscape and transformed the company from an insulin producer to a diabetes care company. NovoPen and the later delivery systems swept over the insulin market. Sales of insulin in pre-filled devices or pens now account for the dominant share in Europe, Asia and Scandinavia, where patients are advised to take frequent injections of insulin every day. Today, almost thirty years since its initial blue ocean strategic move, Novo Nordisk remains the global leader in diabetes care, with some 70 percent of its total turnover coming from this offering, which originated largely in the company’s thinking in terms of users rather than influencers.

The Novo Nordisk case study illustrates how market boundaries can be reconstructed by looking across the chain of buyers, path three in blue ocean strategy’s six paths framework.

Blue ocean strategy is based on over decade-long study of more than 150 strategic moves spanning more than 30 industries over 100 years. The research of W. Chan Kim and Renée Mauborgne focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean.

The database and research have continued to expand and grow over the last ten years since the first edition of the book was published and the strategic moves we studied depict similar patterns, whether blue oceans were created in for-profit industries, non-profit organizations, or the public sector.

Here are a few examples of blue ocean strategic moves from a variety of different industries and sectors. Select from the icons below to learn more.

    Bloomberg Financial News Case Study
    Canon Blue Ocean Strategy Case Study
    Cemex Blue Ocean Strategy Case Study
    Cirque du Soleil Blue Ocean Strategy Case Study
    Curves Blue Ocean Strategy Case Study
    Ford Model T Blue Ocean Strategy Case Study
    iTunes Blue Ocean Strategy Case Study
    JCDeaux Blue Ocean Strategy Case Study
    NetJets Blue Ocean Strategy Case Study
    Novo Nordisk Blue Ocean Strategy Case Study
    New York Police Department Blue Ocean Strategy Case Study
    Peirce College Blue Ocean Strategy Case Study
    Philips Blue Ocean Strategy Case Study
    QBHouse Blue Ocean Strategy Case Study
    Quicken Blue Ocean Strategy Case Study
    Polo Ralph Lauren Blue Ocean Strategy Case Study
    Viagra Blue Ocean Strategy Case Study