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Harvard Business Review
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Value
Innovation: The Strategic Logic of High Growth
W. Chan Kim and Renée
Mauborgne
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Why are some companies able to sustain high
growth in revenues and profits--and others are not? To answer that question,
the authors, both of INSEAD, spent five years studying more than 30 companies
around the world. They found that the difference between the high-growth
companies and their less successful competitors was in each group's assumptions
about strategy. Managers of the less successful companies followed conventional
strategic logic. Managers of the high-growth companies followed what the
authors call the logic of value innovation. The authors tell the
story of the French hotelier Accor, which discarded the notion of what
a hotel is supposed to look like in order to offer what most customers
want: a good night's sleep at a low price. And Virgin Atlantic challenged
industry conventions by eliminating first-class service and channeling
savings into innovations for business-class passengers. Those companies
didn't set out to build advantages over the competition, but they ended
up achieving the greatest competitive advantage.
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W. Chan Kim is The Boston Consulting Group Bruce D. Henderson Chair
Professor of International Management at INSEAD, France.
Renée Mauborgne is The INSEAD Distinguished
Fellow and Affiliate Professor of Strategy and Management at INSEAD.
She is also President of ITM Research.
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