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The Study on Breakthrough Growth of the Private Companies in Pearl River Delta from Value Innovation-based Strategy

Author: GengHaiXin(Harrison)
Tutor: LiuRenHuai
School: Jinan University
Course: Business management
Keywords: Value Innovation Strategic Management Breakthrough Thinking Value Integration WW-commitment breakthrough growth
CLC: F276.5
Type: PhD thesis
Year: 2009
Downloads: 411
Quote: 1
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Abstract


In the 21st Century business environment, the traditional competition-oriented theory and strategy has seemed most unlikely capable to cope with increasing challenges of uncertainty and dynamic change due to globalization and sophisticated technologies. Value Innovation (VI), the cornerstone of Blue Ocean Strategy published globally by Harvard Business School Press in 2005, challenges to focuse on making the competition irrelevant by creating a leap in value for customers and companies themselves, instead of on beating the competitors, thereby opening up new, uncontested market space and breakthrough growth.Value innovation, absolutely contrary to the existing dominant "competition-oriented" theory, sows series of fierce debates among managers and scholars at home and abroad, and is criticized as "Arabian Nights". In the Darwinian game of the real world, almost every company is struggling for survival, and fighting long, head-to-head battles leaves majority of companies financially exhausted, intellectually depleted, and vulnerable to the next wave of competition, with a few exception of "Business Miracle" that make companies gaining astonishing breakthrough growth, such as Wal-Mart, Dell, Starbucks, Swatch, IKEA, Samsung and others almost in every industry. Case studies on these innovative companies reveal that these "Business Miracles" are benefits from VI.Ⅵis a new concept but not a new thing, and also a new approach from different perspectives. In fact, the best practices of these innovative companies are far ahead of the theoretical research on the VI. Managers do consider VI "Arabian Nights" more than "Business Miracles" they are looking for—but that’s because they are unable to start without knowing which decisive factors they should manage. This thesis aims to provide an effective framework in formulating and executing VI strategy. Three critical commons, from the VI perspective, in the successful cases of 6 innovative companies’breakthrough growing cases, such as:breakthrough Thinking, value Integration and win-win Commitment,(TIC framework), after recollecting data and re-editing case studies of these companies, then further justified by more than 30 respondents backed up by their experiences domestically and internationally.The findings and innovative contributions in this thesis are as follows:ⅰ. VI demands exploring a new solution or new model only by breakthrough thinking across conventional boundaries of competition, industry and the company itself, as innovation always begins with "out-of-the-box" thinking.ⅱ. VI requires managers to orient the systematical value integrative solution which results in a leap in value for all parties involved, by restructuring DNA of products/services, or by upgrading perceived value through personal experience, or by dynamically combining the resources and value demands of all parties involved.ⅲ. Higher win-win commitments from all parties involved are imperatively needed to guarantee the systematical value integrative solution, by getting commitment through cooperation, by gaining commitment through value sharing, and by upgrading commitment through motivation. The win-win-commitments from all parties including the rivals involved as shareholders depend upon everyone’s value-demand well listened and satisfied.ⅳ. TIC framework is designed to enable managers insight into what decisive factors to be effectively managed in stimulating and executing the value innovation strategy.ⅴ. A new approach to VI is suggested although it is widely recognized that there are only two approaches:reconstructing current value elements and extending the customers’value. Findings in this thesis reveal that the third approach is to create new customers’value by connecting the value ring with TIC framework, as the vast potential market space may be the value ring unconscious, untapped and unconnected but in existence. The thesis finds a lot of evidences of innovative companies to approach growth in unique ways by looking at unmet and/or untapped needs of customers.

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