Using a value creation compass to discover “Blue Oceans”

Purpose – Researchers Kim and Mauborgne argue that firms seeking to grow in mature markets need to create new buyer value, thereby entering Blue Ocean markets, where they don't have rivals. In contrast, firms fighting rivals in bloody, Red Oceans will struggle to remain profitable. To facilitate the search for Blue Oceans the paper aims to offer managers a new tool to uncover new points of buyer differentiation.Design/methodology/approach – This paper draws from the strategy, marketing and economics literatures to illustrate how firms can enhance performance by creating Blue Oceans.Findings – This paper suggests that one way to generate Blue Ocean strategies is to use the fundamental building blocks of value creation. Based on extensive work with value creation logics, it proposes that there are three types of value firms can offer customers: lower prices using an industrial efficiency logic; increase user connectivity with a network services logic; or enhance the offering's fit with the user needs using ...