Differentiation vs Creating a Blue Ocean Strategy

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Range of value cost trade-offs available based on industry structure and best practices
Differentiation offers premium value but increases cost and price
Market creation breaks trade-offs by reconstructing industry boundaries
Yellowtail and Salesforce.com are examples of differentiated and low-cost products
Differentiation alone allows carving out a premium position in existing industry
Market creation focuses on raising and creating value while also eliminating and reducing costs
Market creation combines differentiation and low cost at any price point

Blue ocean strategy is a landmark business idea, but its co-creator, Renée Mauborgne, says it’s not a guaranteed win. She discusses what specifically can go wrong when you try to implement blue ocean strategy, including the common traps managers fall into.