"Creating New Market Space"

Paper Summary:

This paper analyzes Kim and Mauborgne's 2001 article, "Creating New Market Space," in which they critically identify the processes through which several companies have redefined their market orientation. The paper looks at the companies: Home Depot, Quicken Software, Ralph Lauren, Bloomberg, Barnes & Nobel, Starbucks and the Body Shop. It then looks at the innovative new markets that were pioneered by these companies.

From the Paper:

"Six innovative new markets were pioneered by these companies seeking to diversify into new market spaces. These are best determined by the boundaries that affect diversity: substitute industries, strategic groups within industries, buyers, complimentary products and services, emotional appeal, and time. The rate of adoption for consumers is heavily dependent on how and to what extent the market accepts change, but also how well the company can affect the consumer's decision-making capabilities through providing a new experience. It is therefore a process of incentives, where the company needs to identify if the proposed market space offers advantages that will influence the consumer's purchasing habits. Working within the six boundaries helps to focus the discussion and determine whether innovative efforts will be worth the time and investment. Kim and Mauborgne (2001) stress that innovation in redefining market orientation is resource-intensive, and therefore steps to achieve redefinition must meet or exceed the outcome attached to it to make the reorientation worthwhile."

Sample of Sources Used:

• Kim, W. C. & Mauborgne, R. (2001). Creating new market space. Harvard Business Review on Innovation. Cambridge (MA): Marvard Business School Publishing Corporation.

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