Is blue ocean strategy synonymous with creative destruction?

Chan Kim & Renée Mauborgne: No. Blue ocean strategy goes beyond creative destruction to embrace nondestructive creation. Creative destruction occurs when an innovation disrupts an existing market by displacing an earlier technology or existing product or service. The word “displacement” is important here, as without displacement, disruption would not occur. In the case of photography, for example, the innovation of digital photography disrupted the photographic film industry by effectively displacing it. Disruption is, hence, largely consonant with Schumpeter’s concept of creative destruction, whereby the old is incessantly destroyed or replaced by the new.

Blue ocean strategy, in contrast, does not necessitate displacement or destruction. Consider Viagra, which created a blue ocean in lifestyle drugs. Did Viagra displace an earlier technology or existing product or service? No. It created a blue ocean via nondestructive creation — by reconstructing existing market boundaries to create new market space within and beyond existing industries. Or consider Nintendo’s Wii. While the gaming system had an element of creative destruction, the new market space it created of physically active, family-centered video gaming had an even larger element of nondestructive creation that complemented, more than disrupted or displaced, existing video games.

The essential point here is that blue ocean strategy is not about finding a better or lower-cost solution to the existing problem of an industry, both of which trigger disruption and displacement of existing products and services. Instead, blue ocean strategy is about redefining the problem itself, which tends to create new demand or an offering that often complements rather than displaces existing products and services.

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