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0:00
Hello and welcome to this series of
introductory talks on business strategy.
My name is Robert Grant.
I'm a professor of strategic management
at Bocconi University in Milan, Italy.
I'm also the author of
'Contemporary Strategy Analysis',
a leading strategic management textbook used
in business programmes throughout the world.
0:23
Let us look at this process
of strategic innovation.
There can be several sources
of strategic innovation,
this creation of
new customer value
from novel approaches
to competing.
A firm can create new markets.
MySpace and Facebook
created social media.
Firms can also create new customer
segments within existing markets.
Ryanair has created a whole new
leisure segment in European aviation.
Nintendo, with its Wii and
Switch games consoles,
has created a new segment
of casual gamers.
These two areas of creating new
markets and creating new segments,
is what has been referred to
as "Blue Oceans" strategy,
creating areas of
uncontested market space.
Firms can also create new sources
of competitive advantage.
They can reconfigure
their value chains.
Zara in fashion
clothing, for example,
Southwestern in airlines
and IKEA in furniture.
Firms can also
reconceptualise the product.
Cirque du Soleil has recreated
people's notion of what a circus is.
Starbucks has taken a very different
approach to supplying coffee.
Apple in computers.
Its iPad, in effect, is a
different way of competing
in the mobile computer market.
Firms can also create new
combinations of performance,
for example, combining
low prices with quality.
Look at Virgin Atlantic
and JetBlue in aviation.
Look at H&M, Primark, and Boohoo
in low-cost fast fashion.
Firms can also create
new business models.
They can access new sources
of revenue and profit.
Consider Roblox in video games.
Roblox now dominates the market
in video game entertainment
amongst the pre-teen
groups of the world.
