Evaluate value and cost drivers that may allow a firm to pursue a blue ocean strategy.
■ To address the trade-offs between differentiation and cost leadership at the business level, managers must employ value innovation, a process that will lead them to align the proposed business strategy with total perceived consumer benefits, price, and cost.
■ Lowering a firm’s costs is primarily achieved by eliminating and reducing the taken-for-granted factors on which the firm’s industry rivals compete.
■ Increasing perceived buyer value is primarily achieved by raising existing key success factors and by creating new elements that the industry has not yet offered.
■ Managers track their opportunities and risks for lowering a firm’s costs and increasing perceived value vis-à-vis their competitors by use of a strategy canvas, which plots industry factors among competitors.