This case illustrates that if companies wish to tap into latent demand and create organic growth, they must learn from noncustomers.

This case focuses on Skype in the voice-over-IP (VoIP) industry. Its offering created such exceptional utility for users around the world that Skype has become a verb – to “skype” someone means to call someone using the Skype application. Yet despite explosive growth in demand, the company was not profitable in four out of the five years prior to its acquisition by Microsoft in 2011.

This is the first part of two-case series of Zappos's blue ocean strategic move as an innovative online shoe retailer. Part A focuses on how Zappos reconstructed the existing boundaries of the online footwear retail industry. It describes Zappos's distinctive value proposition that is neither an offline nor online shoe store in the conventional sense.

The second part of Zappos case focuses on Zappos's people proposition, which led to high performance and raised barriers to imitation.