By W Chan Kim; Renée Mauborgne
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Extra info for Blue ocean strategy : how to create uncontested market space and make the competition irrelevant
On international flights, your plane pulls directly up to the customs office. With point-to-point service and the exponential increase in the number of airports to land in, there are no flight transfers; trips that would otherwise require overnight stays can be completed in a single day. The time from your car to takeoff is measured in minutes instead of hours. 3 NetJets offers substantial cost savings in total travel time. Perhaps most appealing, your jet is always available with only four hours’ notice.
This growth is not due to a company’s strategy, however, but to luck. Overdelivery Without Payback When a company’s value curve on the strategy canvas is shown to deliver high levels across all factors, the question is, Does the company’s market share and profitability reflect these investments? If not, the strategy canvas signals that the company may be oversupplying its customers, offering too much of those elements that add incremental value to buyers. To value-innovate, the company must decide which factors to eliminate and reduce—and not only those to raise and create—to construct a divergent value curve.
Purchased by Berkshire Hathaway in 1998, today NetJets is a multibillion-dollar business, with revenues growing at 30–35 percent per year from 1993 to 2000. NetJets’ success has been attributed to its flexibility, shortened travel time, hasslefree travel experience, increased reliability, and strategic pricing. The reality is that NetJets reconstructed market boundaries to create this blue ocean by looking across alternative industries. The most lucrative mass of customers in the aviation industry are corporate travelers.
Blue ocean strategy : how to create uncontested market space and make the competition irrelevant by W Chan Kim; Renée Mauborgne