For the past 20 years "disruption" has been a battle cry in business. Not surprisingly, many have come to see it as a near-synonym for innovation. But the obsession with disruption obscures an important truth: Market-creating innovation isn't always disruptive. Disruption may be what people talk about. It's certainly important, and it's all around us. But, as the authors of the best-selling book Blue Ocean Strategy argue, it's only one end of the innovation spectrum. On the other end is what they call nondisruptive creation, through which new industries, new jobs, and profitable growth are created without social harm. Nondisruptive creation reveals an immense potential to establish new markets where none existed before and, in doing so, to foster economic growth without a loss of jobs or damage to other industries, enabling business and society to thrive together.

Despite a long-term decline in the circus industry, Cirque du Soleil profitably increased revenue 22-fold over the last 10 years by reinventing the circus. Rather than competing within the confines of the existing industry or trying to steal customers from rivals, Cirque developed uncontested market space that made the competition irrelevant. Cirque created what the authors call a blue ocean, a previously unknown market space. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In red oceans-that is, in all the industries already existing-companies compete by grabbing for a greater share of limited demand. As the market space gets more crowded, prospects for profits and growth decline. Products turn into commodities, and increasing competition turns the water bloody. There are two ways to create blue oceans. One is to launch completely new industries, as eBay did with online auctions. But it's much more common for a blue ocean to be created from within a red ocean when a company expands the boundaries of an existing industry. In studying more than 150 blue ocean creations in over 30 industries, the authors observed that the traditional units of strategic analysis-company and industry-are of limited use in explaining how and why blue oceans are created. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major market-creating business offering. Creating blue oceans builds brands. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.