The theory of creative destruction is significant in explaining the long term endogenous economic  growth phenomenon. Howe...
Creative destruction offers a partial explanation of endogenous economicgrowth and changing industrial composition Reconst...
the microprocessor Second is the creation of an entirely new industry inwhich blue oceans of uncontested market space are ...
Third is the expansion of a current market space or industrys economicgrowth generated through the reconstruction of bound...
Nintendo didnt compete in the Red Ocean: they created a Blue Oceanthat rendered the competition irrelevant As stated previ...
Zunaira Munir, the internationally acclaimed expert and Strategize Blueis powered by internationally acclaimed Blue Ocean ...
Earning her doctorate in Innovation Management from Wuhan Universityof Technology in China, over six years of university t...
blue ocean strategy framework
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The-Theory-Of-Creative-Destruction-Is-Significant-34

  1. 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 ofreconstruction provides a compelling explanation for endogenously created economic growth thatremains unexplained by creative destruction. The two theories, taken together, provide a morecomprehensive understanding of determinants of long term economic growth.blue ocean strategy framework
  2. 2. Creative destruction offers a partial explanation of endogenous economicgrowth and changing industrial composition Reconstruction however,driven by creativity as a learnable skill, is a broader concept that can beidentified in three subsidiaries, offering explanation for the creativedestructions shortcomings to the creation of the numerous new industriesthat resulted in the reconstruction of boundaries between existingwell-defined industries and the economic growth generated throughreconstruction of boundaries within existing industries that generate newdemand in the market and creates new market spaces within industriesFirst, Schumpeters creative destruction defined as an evolutionaryprocess in which companies follow the pattern of destruction and rebirth,new structures completely destroy a previous market or industry Ideas,skills, technologies, etc become obsolete as innovations to an industrydevelop in the interest to improve productivity or the standard of living Aclassic example is the death of the type writer due to the development of
  3. 3. the microprocessor Second is the creation of an entirely new industry inwhich blue oceans of uncontested market space are created due to thereconstruction of boundaries between existing well-defined industries Forexample, Cirque du Soleil created uncontested new market space byappealing to a whole new group of customers By ignoring the existingboundaries of the already shrinking circus industry and theater Cirque duSoleil successfully reinvented the circus appealing to a whole new groupof consumers
  4. 4. Third is the expansion of a current market space or industrys economicgrowth generated through the reconstruction of boundaries within existingindustries that generate new demand in the market and creates newmarket spaces within industries Take Nintendo Wii for example; Everyaspect of the Nintendo Wii is Fun Nintendo Wii has been able to outsellMicrosofts Xbox 360 and Sonys PS3 As the video gaming industry hasbecome increasingly more competitive Nintendo decided not to competein the bloody red ocean of competition Instead Nintendo applied BlueOcean Strategys six-path element of Functional/Emotional to create highprofitable growth Nintendo eliminated movie playing, reduced graphicsand physics and raised the fun of playing video games Nintendo realizedthat high-resolution movies on a game machine are TechnologicalInnovation: innovation solely for the sake of innovating Fun, an emotionelement, was placed over chips, a functional element Whereas itscompetitors, Microsoft and Sony concentrated entirely on functionalelements: great graphics processors, physics engines, specialized chips,etc
  5. 5. Nintendo didnt compete in the Red Ocean: they created a Blue Oceanthat rendered the competition irrelevant As stated previously in thisarticle Creative destruction completely wipes off previous market/industryIn contrast, reconstruction suggests new industries new wealth and newmarkets can be generated endogenously through companies conscienceefforts of reconstruction of demand side value elements Buyer valueelements can be reordered across established market and industryboundaries such that a new level of demand is generated spurringincome growth and creating wealth The central driver behind Blue OceanStrategys reconstruction is creativity which is a learnable skillKnowledge and ideas are systematically deployed in the process ofcreation to identify and minimize risks as companies attempt to maximizenew market creation opportunities Brendan Murphy is the MarketingManager for Strategize Blue , a Blue Ocean Strategy Training andConsulting company based in San Diego He works under Dr
  6. 6. Zunaira Munir, the internationally acclaimed expert and Strategize Blueis powered by internationally acclaimed Blue Ocean Strategy, InnovationManagement and Leadership Expert Dr Zunaira Munir As the founderand Managing Director of international Blue Ocean Strategy consultingfirm Strategize Blue (San Diego, CA) she has helped industry giants Intel,Hewlett Packard, T-Mobile, Honeywell, AUTODESK, Virbac, RJReynolds, DataPath and many more to create wealth and sustainablegrowth A distinguished business executive she helped lead herfamily-business Clary Business Machines to one of the fastest growingprivately held companies in the US in 2008 and 2009 A sought-afterspeaker, trainer, and business consultant she challenges companies tolook beyond just surviving Difficult to ignore the global impact of BlueOcean Strategy on the business and strategy world she vehementlycontinues to inspire businesses to apply Blue Ocean Strategy Sheasserts fighting with rivals over competition and innovation without valueis simply not enough
  7. 7. Earning her doctorate in Innovation Management from Wuhan Universityof Technology in China, over six years of university teaching experienceat the undergraduate and graduate levels and global blue ocean strategyframework business credentials, Dr Munir creates a lasting impact onorganizations eager to innovate and grow An active Senior Global BlueOcean Strategy Network Member she works directly under internationalbest-selling Blue Ocean Strategy authors W Chan Kim and ReneeMauborgne on cutting-edge research, projects and initiatives worldwideHer upcoming book "Key Concepts in Innovation" published by PalgraveMcMillan transforms the complexities of innovation into clear terminologyfor both students and practitioners in the field Dr Munirs widelypublished articles have been featured in China Business Review,International Review of Business and Research, the PDMA ResearchForum and many others For More Information: Mail: 10360 SorrentoValley Road, Suite C, San Diego CA 92121 Email: Phone:+1(858)-324-1997 Fax: +1(858)-552-8609
  8. 8. blue ocean strategy framework

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