1. The theory of creative destruction is significant
in explaining the long term endogenous
economic growth phenomenon. However, it
falls short of painting the complete picture. The
theory of reconstruction provides a compelling
explanation for endogenously created economic
growth that remains unexplained by creative
destruction. The two theories, taken together,
provide a more comprehensive understanding
of determinants of long term economic growth.
blue ocean strategy
2. Creative destruction offers a partial explanation of endogenous
economic growth and changing industrial composition
Reconstruction however, driven by creativity as a learnable skill, is a
broader concept that can be identified in three subsidiaries, offering
explanation for the creative destruction's shortcomings to the
creation of the numerous new industries that resulted in the
reconstruction of boundaries between existing well-defined industries
and the economic growth generated through reconstruction of
boundaries within existing industries that generate new demand in
the market and creates new market spaces within industries First,
Schumpeter's creative destruction defined as an evolutionary
process in which companies follow the pattern of destruction and
rebirth, new structures completely destroy a previous market or
industry Ideas, skills, technologies, etc blue ocean strategy become
obsolete as innovations to an industry develop in the interest to
improve productivity or the standard of living A classic example is
the death of the type writer due to the development of the
microprocessor Second is the creation of an entirely new industry in
which blue oceans of uncontested market space are created due to
the reconstruction of boundaries between existing well-defined
industries
3. For example, Cirque du Soleil created uncontested new market
space by appealing to a whole new group of customers By ignoring
the existing boundaries of the already shrinking circus industry and
theater Cirque du Soleil successfully reinvented the circus appealing
to a whole new group of consumers Third is the expansion of a
current market space or industry's economic growth generated
through the reconstruction of boundaries within existing industries
that generate new demand in the market and creates new market
spaces within industries Take Nintendo Wii for example; Every
aspect of the Nintendo Wii is Fun Nintendo Wii has been able to
outsell Microsoft's Xbox 360 and Sony's PS3 As the video gaming
industry has become increasingly more competitive Nintendo
decided not to compete in the bloody red ocean of competition
Instead Nintendo applied Blue Ocean Strategy's six-path element of
Functional/Emotional to create high profitable growth
4. 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 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 didn't compete in the Red Ocean:
they created a Blue Ocean that rendered the competition irrelevant
As stated previously in this article Creative destruction completely
wipes off previous market/industry In contrast, reconstruction
suggests new industries new wealth and new markets can be
generated endogenously through companies' conscience efforts of
reconstruction of demand side value elements
5. Buyer value elements can be reordered across established market
and industry boundaries such that a new level of demand is
generated spurring income growth and creating wealth The central
driver behind Blue Ocean Strategy's reconstruction is creativity
which is a learnable skill Knowledge and ideas are systematically
deployed in the process of creation to identify and minimize risks as
companies attempt to maximize new market creation opportunities
Brendan Murphy is the Marketing Manager for Strategize Blue , a
Blue Ocean Strategy Training and Consulting company based in San
Diego He works under Dr Zunaira Munir, the internationally
acclaimed expert and Strategize Blue is powered by internationally
acclaimed Blue Ocean Strategy, Innovation Management and
Leadership Expert Dr
6. Zunaira Munir As the founder and Managing Director of
international Blue Ocean Strategy consulting firm Strategize Blue
(San Diego, CA) she has helped industry giants Intel, Hewlett
Packard, T-Mobile, Honeywell, AUTODESK, Virbac, RJ Reynolds,
DataPath and many more to create wealth and sustainable growth A
distinguished business executive she helped lead her
family-business Clary Business Machines to one of the fastest
growing privately held companies in the US in 2008 and 2009 A
sought-after speaker, trainer, and business consultant she
challenges companies to look beyond just surviving Difficult to
ignore the global impact of Blue Ocean Strategy on the business and
strategy world she vehemently continues to inspire businesses to
apply Blue Ocean Strategy She asserts fighting with rivals over
competition and innovation without value is simply not enough
Earning her doctorate in Innovation Management from Wuhan
7. University of Technology in China, over six years of university
teaching experience at the undergraduate and graduate levels and
global business credentials, Dr
8. Munir creates a lasting impact on organizations eager to innovate
and grow An active Senior Global Blue Ocean Strategy Network
Member she works directly under international best-selling Blue
Ocean Strategy authors W Chan Kim and Renee Mauborgne on
cutting-edge research, projects and initiatives worldwide Her
upcoming book "Key Concepts in Innovation" published by Palgrave
McMillan transforms the complexities of innovation into clear
terminology for both students and practitioners in the field Dr
Munir's widely published articles have been featured in China
Business Review, International Review of Business and Research,
the PDMA Research Forum and many others For More Information:
Mail: 10360 Sorrento Valley Road, Suite C, San Diego CA 92121
Email: Phone: +1(858)-324-1997 Fax: +1(858)-552-8609
