The natural strategic orientation of many companies is toward retaining existing customers and seeking further segmentation opportunities. - W. Chan Kim

In a nutshell, Blue Ocean Strategy proposes that strategy can shape industry structure, whereas competitive strategy sees strategy as choosing the right position under given structural constraints. The field of strategy has been long dominated by a structuralist view; in other words, the idea that the industry’s structure is fixed. Strategy, as commonly practiced, tees off with industry analysis and is conventionally about matching a company’s strengths and weaknesses to the opportunities and threats present in the existing industry. Here, strategy becomes a zero-sum game where one company’s gain is another company’s loss, as firms are bound by existing market space.

Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.

Value innovation requires companies to orient the whole system toward achieving a leap in value for both buyers. The simultaneous pursuit of differentiation and low cost.