Blue Ocean Strategy

A strategic move is the set of managerial actions and decisions involved in making a major market-creating business offering. (10)

The key defining feature of blue oceans was value innovation – innovation that was linked to what buyers value. (192)

In the 1970’s, the Japanese created a new blue ocean, challenging the U.S. automobile industry with small, efficient cars…When the oil crisis occurred in the 1970’s, U.S. consumers flocked to fuel-efficient, robust Japanese cars…The Japanese car producers had been so effective at creating and capturing this blue ocean that the U.S. automakers found it hard to make a real comeback. (195)

Watson decreed that tabulators would be leased and not sold, an innovation that helped establish a new pricing model for the tabulating machine business…it allowed businesses to avoid large capital expenditures, while giving them the flexibility to upgrade…it gave CTR a recurring revenue stream while precluding customers from buying used machines from one another. (198)

Average ticket prices for an opera were $2 and vaudeville was 50 cents…In contrast, the price of admission to Davis’s nickelodeon theater was 5 cents. Davis kept the price at a nickel by stripping the theater venue to its bare essentials – benches and the screen – and placing his theaters in lower-rent, working-class neighborhoods. Next, he focused on volume and convenience, opening his theaters at eight in the morning and playing reels continuously until midnight. (204)

“Giving the people what they want is fundamentally and disastrously wrong. The people don’t know what they want…[Give] them something better.” – Samuel “Roxy” Rothapfel

Unlike the multiplexes, which were often cramped, dingy, and unspectacular, the megaplex had stadium seating and comfortable easy chairs, and it offered more films and superior sight and sound. Despite these improved offerings, the megaplex’s operating costs are still lower than the multiplex’s. This is because the megaplex’s location outside city centers – the key cost factor – is much cheaper; its size gives it economies in purchasing and operations and more leverage with film distributors. And with twenty-four screens playing every available movie on the market, the place, and not the movie, becomes the draw. (207)

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