From Guest Blogger Michael Olenick
The idea that higher value and lower cost are incompatible is taken as an assumption. Better things cost more, right?
Sometimes that’s true, but not always. Blue Ocean Strategy theorizes the relationship can be broken, that higher value can be delivered at lower cost. This concept is called the cost/value trade-off.
Let’s use an obvious example:
All those covered-up buttons add cost; each must be engineered to do something, tested, manufactured, distributed, and explained to consumers (who have no interest in them). The extra cost adds unnecessary complexity. Let’s check out Apple’s TV remote instead:
Now a larger example, the turnaround of an entire company and creation of a new movie studio.
Marvel, the beloved comic book/movie/TV/game/toy company went from bankrupt and deeply in debt to a $4.2 billion buyout, in just over a decade, by breaking the cost/value trade-off. Marvel movies earn considerably more than movies from other studios yet cost considerably less to make.