Managing Innovation: Application of Blue Ocean Theory in WeWork

MANAGING
INNOVATION

Table of Contents
INTRODUCTION...........................................................................................................................1
BLUE OCEAN THEORY...............................................................................................................1
Definitions, Principles and Processes of Blue Ocean Theory................................................1
Evaluation of the Theory........................................................................................................3
APPLICATION OF THE THEORY...............................................................................................6
Company Background............................................................................................................6
Historical Development..........................................................................................................7
Future Development...............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation refers to a detailed combination of several processes, techniques and methods
that organisations adopt in order to enhance the importance of their offerings and make them
more useful. Furthermore, innovation is a necessary aspect that is imperative to be implemented
in order to ensure that a productive and value added feature is added and included within the
existing products and services of the company. The main purpose of innovation is to enhance the
sustainability, improvise the performance of the firm and gain a competitive edge in the market
(Mao, 2017).
Hence, in this relation, the report below is based on WeWork, which is an American real
estate organisation which provides its customers with shared spaces for several technological
start up firms and other organisation. The innovation in its offerings focuses on creating
workspaces that could be used for professionals from even distinct and different fields.
Moreover, the report also sees application of Blue Ocean Strategy, which is an innovation theory
that emphasises on creating uncontested market space, which makes the competition irrelevant
for the organisation. The report covers a detailed insight within the innovation theory, covering
its detailed evaluation, along with application of the theory on the historical and future contexts
of the company.
BLUE OCEAN THEORY
Definitions, Principles and Processes of Blue Ocean Theory
Definition of Blue Ocean Theory
Blue Ocean Strategy refers to a consistent process of differentiation, as well as low cost
alternatives which allows companies to create new demands within the market in which it
operates. Furthermore, the notion on which this theory works is related to capturing the market
spaces that are still very much uncontested, which makes the competition pretty much irrelevant
for the company (Brunswicker and Vanhaverbeke, 2015).
Another notion that is supported by this theory is that the industrial structure, as well as
the boundaries within the market could be reconstructed by the businesses that operate within the
strategy.
Principles of Blue Ocean Theory
1

There has always been two terms that have been used in this theory. The first one is Red
Ocean, which refers to all the sectors that have an existence in the market currently, which is also
referred as market space. Within this, the same, the boundaries of the industries are very much
defined, as well as are accepted to all the businesses involved, along with the competitive rules
that are required to be followed by the companies for operating within the sector. Within this
market space however, the competitive advantage is gathered through acquiring share of the
existing demand within the market. However, profits are reduced once the sector gets very much
crowded.
In contrast, Blue Ocean indicates all the sectors that haven’t yet been in existence, are
unknowns, as well as free from any sort of competition amongst companies. The demand within
the market is not being fought over, rather than is created by the players within the sector. The
flexibility provided by this sector is high, as it operates with limited or no boundaries.
Hence, this hands out certain features or principles that are related to the theory:
 Unknown Market Space:
One of the most prominent features or principles related to the Blue Ocean Strategy is that
the market in this strategy is unknown. The reason for this is the unexplored areas of the
marketplace which haven’t been chosen by any company to perform in as of yet (DeBarro and et.
al., 2015).
 No Competition:
Another principle of Blue Ocean Strategy is that the companies are yet to enter the market
space, which means that there is possibly no competition when the firm brings its competition
within the industry. Furthermore, since the motive is associated with creation of a new demand,
blue ocean strategy makes the competition irrelevant.
 Differentiation:
This principle is associated with consistent differentiation within the offerings which allows
the companies to create a market space that is yet to be explored by others. Furthermore, it is
very necessary to create a platform in the firm’s culture to encourage extensive market research
to determine the gap in the market for which the demand could be created.
 Development of Demand:
It is very necessary for companies that have been adopting the Blue Ocean Strategy to create a
new demand within amongst the customers. The strategy emphasises on innovating a product or
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