Value innovations focus on customersrather than competitorsCharacteristicsof conventional and value innovation logicConventional logicAssumptionAnindustry'svaluecurvesfollowonebasicshapeStrategicBuild a competitive advantagefocusandbeatthecompetition.RetainandexpandcustomerCustomersbase through segmentation andcustomization.Focusonthedifferences.ResourcesUtilize existing assets andcapabilities.OfferingsOffertheproductsandservicesof your industry.COMP7880-EN-6
Value innovations focus on customers rather than competitors Characteristics of conventional and value innovation logic Conventional logic Value innovation logic Assumption Strategic focus Customers Resources Offerings An industry's value curves follow one basic shape. Build a competitive advantage and beat the competition. Retain and expand customer base through segmentation and customization. Focus on the differences. Utilize existing assets and capabilities. Offer the products and services of your industry. New value curves can be shaped that solve traditional trade-offs. Pursue a quantum leap in customer value. Competition is no benchmark. Target the mass of buyers. Let some existing customers willingly go. Focus on key commonalities in what customers value. Ask what we would do if we were starting anew? Offer the total customer solution exceeding industry boundaries. COMP7880-EN-6
The second step leading to valueinnovations is the 'visual exploration' Assignment for team exerciseActivities.Adopttheperspective ofanew industryentrantandreconsidertheexistingvaluecurves.Useoneortwoofthepathstoexperimentwiththecreationsofanewvaluecurve-Industry:Askwhichelementsofsubstituteindustriesareun/importanttotargetbuyers?Strategicgroups:Askwhichkeyelementsoftheoffercompelbuyerstobuyuporbuydown?Buyers:Askwhoarethedecisionmakersandhowwouldchangingbuyerfocusaffectthekey elements?Scope:Askhow istheoffercurrentlyusedandwhatactivities/servicesmightbevaluablyincorporated?Appeal:Askhowwecanchangethepolarityofappeal?Time: Ask what trends are impacting our industry andhowdothekeyelementsmatch.Plotanewvaluecurve.Indicatewhichkeyelementsareeliminated,reduced,raisedorcreatedCOMP7880-EN-7
Activities Objective Create a new value curve for a specific offering The second step leading to value innovations is the ‘visual exploration’ ◼ Assignment for team exercise • Adopt the perspective of a new industry entrant and reconsider the existing value curves • Use one or two of the paths to experiment with the creations of a new value curve − Industry: Ask which elements of substitute industries are un/important to target buyers? − Strategic groups: Ask which key elements of the offer compel buyers to buy up or buy down? − Buyers: Ask who are the decision makers and how would changing buyer focus affect the key elements? − Scope: Ask how is the offer currently used and what activities/services might be valuably incorporated? − Appeal: Ask how we can change the polarity of appeal? − Time: Ask what trends are impacting our industry and how do the key elements match • Plot a new value curve. Indicate which key elements are eliminated, reduced, raised or created COMP7880-EN-7