Starbucks
Starbucks sold a retailing concept: the coffee bar, offering relaxation and conversation, and drinks made with quality beans, frothy and flavored milks, creams, syrups and ices. While $3 for a cup of Starbucks' coffee is outrageous compared with the cost of a cup of instant coffee at home, consumers did not see it that way. They judged Starbucks as an indulgence, so the steep price appeared good value for money. Starbucks turned the coffee industry on its head by shifting its focus from commodity coffee sales to the emotional atmosphere in which customers enjoy their coffee. With almost no advertising, Starbucks became an international brand with margins roughly five times the industry average.
Cisco
Cisco systems recognized that the world was hampered by slow data exchanges and incompatible computer networks. Demand was exploding as, among other factors, the number of Internet users doubled roughly every one hundred days. So Cisco could clearly see that the problem would inevitably worsen. Cisco's routers, switches, and other networking devices were designed to create breakthrough value for customers, offering fast data exchanges in a seamless networking environment. Thus Cisco's insight is as much about value innovation as it is about technology. Today more than 80% of all traffic on the Internet goes through Cisco's products, and its gross margins in this new market space have been in the 60% range. Cisco Systems created a new market space by thinking across time trends. It started with a decisive and irreversible trend that had a clear trajectory: the growing demand for high-speed data exchange.
Callaway Golf
Callaway Golf created new demand for its offering by looking to noncustomers. While the U.S. golf industry fought to win a greater share of existing customers, Callaway created a blue ocean of new demand by asking why sports enthusiasts and people in the country club set had not taken up golf as a sport. By looking to noncustomers and focusing on their key commonalities - not differences - Callaway saw how to generate new demand and offer the mass of customers and noncustomers a leap in value. The small size of the golf club head demanded enormous hand-eye coordination, took time to master, and required concentration. This understanding gave Callaway insight into how to generate new demand for its offering. The answer was Big Bertha, a golf club with a large head that made it far easier to hit the golf ball.
Lexus
In the luxury car market Toyota created Lexus between the high end group of Mercedes, BMW, and Jaguar and the low end group of Cadillac and Lincoln in the luxury car industry. The Lexus provided nearly one-third of its operating profit within three years of its launching in 1989, while representing only 2% of Toyota's unit volume. Lexus focused on combining the distinctive strengths of both strategic groups in the luxury car market - namely the lower price point of Cadillac and Lincoln and the high engineering performance and design of the European imports - to unlock breakthrough value to luxury car buyers. By combining the key factors that make luxury car buyers trade up and trade down between these two strategic groups, Lexus rapidly won share from both groups by offering unprecedented price performance value.
Virgin Atlantic Airways
Virgin Atlantic Airways looked across complementary product and service offerings. It thought in terms of the total solution that business class passengers sought in air-travel, which was to provide convenient ground transportation for harried businessmen. The company launched its 'Upper class" value innovation – a new concept in business class travel that essentially combined the huge seats and leg room of traditional first class with the price of business class tickets. Virgin Atlantic Airways offered round-trip limousine service to and from airports for its "Upper class" passengers who are mostly busy businessmen.
Nintendo Wii
Nintendo Wii, at last count was outselling the PS3 4:1 in Japan and is projected to overtake the XBox 360 in total volume of consoles by year-end despite that the 360 had a year head-start. Nintendo used the six-path element of Functional/Emotional to turn that around. Everything about the Wii is Fun: Fun -- an emotion element -- was placed over chips, a functional element. Whereas its competitors, Microsoft and Sony concentrated entirely on functional elements: great graphics processors, physics engines, specialized chips, etc. Nintendo eliminated movie playing, reduced graphics and physics and raised the fun of playing video games. Nintendo realized that high-resolution movies on a game machine are Technological Innovation: innovation solely for the sake of innovating. Nintendo didn't compete in the Red Ocean: they created a Blue Ocean that rendered the competition irrelevant.
NetJets
NetJets created the blue ocean of fractional jet ownership. The reality is that NetJets reconstructed market boundaries to create this blue ocean by looking across alternative industries. By focusing on the key factors that lead corporations to trade across alternatives and eliminating or reducing everything else, NetJets created its blue ocean strategy.