Video Case
Click here to buy the video case from HBSP
Author(s): W. Chan Kim, Renee Mauborgne
HBSP Product Number: 2308
Language: English
Length:
- Part 1-Introduction & Automobile Industry: 8'35
- Part 2- Computer Industry: 7'15
- Part 3- Cinema Industry: 6'40
Teaching Notes
Click here to buy the teaching notes from ecch
Author(s): W. Chan Kim, Renee Mauborgne, J Hunter,
ECCH Product Number: 307-292-8
Publisher: INSEAD
Description:
If we look back over the last 150 years of business history we find that businesses periodically break away from the competition to create and capture 'blue oceans' of new market space. Across industries as diverse as cement production and financial services, companies periodically yet consistently reconstruct market boundaries and create new demand--often giving rise to entirely new industries--in the quest for highly profitable growth. Yet there is very little understanding of the strategic logic behind these breakthrough strategic moves. Specifically, little is known as to whether there is a pattern behind these strategic moves, in which case a strategy of new market creation can be built; or whether these strategic moves exhibit no unifying logic, in which case strategy for new market creation is a moot issue. To answer these questions, this visual video case study examines three representative industries that closely touch peoples' lives: automobiles--how people get to work; computers--what people use at work; and movie theaters--where people go after work. U.S. industries are chosen because they represent the largest and least regulated free market from the turn of the century to 2000. The aim of this video case study is to identify and explore the key strategic moves, what we call 'blue ocean strategic moves,' that shaped each of these industries and assess whether consistent strategic patterns can be identified across them.
Learning Objective:
Students/executives will learn that, contrary to dominant strategic thought, patterns do exist across blue ocean strategic moves both within and across industries. With marginal deviations, the pattern of blue ocean creation exemplified by these three representative industries is consistent with what is observed in other industries. Specifically, students/executives will take away the following key learning points--One: Blue oceans are not about technology innovation per se. Leading-edge technology is sometimes involved in the creation of blue oceans, but it is not a defining feature of them. Two: Blue oceans are created by both industry incumbents and new entrants, challenging the lore that start-ups have natural advantages over established companies in creating new market space. Three: Company and industry are the wrong units of analysis. The traditional units of strategic analysis--company and industry--have little explanatory power when it comes to analyzing how and why blue oceans are created. Four: The most appropriate unit of analysis for explaining the creation of blue oceans is the strategic move--the set of managerial actions and decisions involved in making a major market-creating business offering. Five: The creation of blue oceans is a key catalyst in setting an industry on an upward growth and profit trajectory. It is also a pivotal determinant driving a company's rise in profitable growth, as well as its fall when another company gains the lead and creates a new blue ocean. Six: Creating blue oceans builds brands. The creation of blue oceans does more than contribute to strong, profitable growth; this strategic move exercised a strong, positive effect on establishing a company's standing brand name in buyers' minds.