Two Strategic Logics

From Chan Kim and Renée Mauborgne (Blue Ocean Strategy)

| | | | | --- | --- | --- | | Five Dimensions of Strategy | Conventional Logic | Value Innovation Logic | | Industry assumptions | An industry’s conditions are given. | An industry’s condition can be shaped. | | Strategic focus | A company should build competitive advantages. | Competition is not a benchmark. A company should pursue a leap in value to dominate. | | Customers | A company should retain and expand its customer base through segmentation and customization, focus on what customer value. | A value innovator target the mass of buyers and willingly lets some existing customers go. It focuses on key commodities that customers value. | | Assets and capabilities | A company should leverage its existing assets and capabilities. | A company must not be constrained by what it already has. "What could we do if we were starting anew?" | | Products & Service Offering | An industry traditional boundaries determine the product and service offering. Goal is to maximize value of those offerings. | A value innovator thinks in terms fo the total solution customers seek, even if that takes the company beyond the industry's traditional offerings. |