To build the corporate strategy, there are two main streams of proposition the structuralist and reconstructionist.
The structuralist, as its name it follows a structural process to form the corporate strategy which help the corporate to survive and make profit within the current market competition.
It is a rational approach that is structured and sequenced to formulate a strategy. Analysis external and internal environment to identify the exiting market opportunities and threats as well as the company strengths and weaknesses, for example using the SWOT analysis, in order to select a competitive strategy from various strategic choices.
Michael Porter’s Five force and Generic competitive strategies theories which are …show more content…
Chan Kim and Renee Mauborgne; by the value innovation companies create a new market space without or with minimal competition, what it is called the Blue Ocean while the old market full of competition is called the Red Ocean instead.
2. Value analysis vs. Value Innovation
Per the Blue Ocean strategy, the value innovation is not only a matter of technology innovation or a perfect timing to the market; “Value innovation occurs only when companies align innovation with utility, price, and cost positions.” (Kim & Mauborgne, 2005).
The Strategy canvas plus the four actions framework (Eliminate, Reduce, Raise and Create) is used to reconstruct customer value factors; industry value factors are identified and evaluated, non-relevant factors are eliminated or reduced while some other factors are raised finally create newly factors which will reconstruct the market boundaries.
Actually, the four actions framework is not something new because it is quite similar to some models from structuralist, e.g. the Porter’s Value chain analysis or the Value stream mapping (VSM) of lean concept; which are methods to identify the customer values within the business activities or manufacturing …show more content…
Structuralist evaluation models shown that they do not encourage novelty but this may lead the company performance remains in the old rut. Usually using Benchmarking; it is a tool with reference to the market leader performance as the standard to evaluate the company performance which also help to identify the customer values.
Consequently the same values will be identified in evaluations at different point of time if there is no change of the market leader in the industry. It will be easily overlook some other success factors which may actually increase customers’ satisfaction.
Blue Ocean strategy ignore the current industry standard and promote value innovation.
This concept is align with the today business world particularly, product development is become one of the important factor for business survival (Cecere, 2013); company possibly try to be increase the number of new products launch in order to stimulate new sales and pursuing greater market