Chapter 8 – Alternative Value Propositions
© 2005 John Wiley & Sons
1. A value proposition is often an umbrella concept
under which the supporting assets & competencies
and functional strategies and programs can be
grouped.
2. A VP is a clear statement of the tangible results a
customer gets from using your products or services.
The more specific, the better.
3. A strong VP needs to be real, perceived as real by
customers, feasible, relevant and sustainable.
4. Alternative value propositions
PPT1
For Discussion:
© 2005 John Wiley & Sons
Comments on the following VPs. Identify the bottom 4
weakest VPs. What criteria do you use? And how can
you enhance a value proposition?
1. A good value
2. The most technologically advanced and robust system on the
market
3. Excellence on an important product or service attribute such as
getting clothes clean
4. Product line breadth
5. We improve communication and morale
6. We offer training classes in a wide variety of areas
7. The best overall quality
8. Innovative offering
9. My product was rated the best-in-class by leading authorities
10.A shared passion for an activity or a product
11.Global connections and prestige
PPT2
© 2005 John Wiley & Sons
For Discussion: Value Propositions (1)
1. A good value (Wal-Mart)
2. The most technologically advanced and robust system on the
market
3. Excellence on an important product or service attribute such as
getting clothes clean (Tide)
4. Product line breath (Amazon)
5. We improve communication and morale
6. We offer training classes in a wide variety of areas
7. The best overall quality (Lexus)
8. Innovative offering (3M)
9. My product was rated the best-in-class by leading authorities
10.A shared passion for an activity or a product (Harley-Davidson)
11.Global connections and prestige (CitiGroup)
PPT3
For Discussion: Value Propositions (2)
© 2005 John Wiley & Sons
We need a strong VP to break through the clutter and
get customers’ attention
A strong VP needs to be
- Real (have substance behind it)
- Perceived as real by customers
- Feasible
- Relevant to what customers want to buy
- Sustainable (represents a point of superiority over
the competition)
PPT4
For Discussion: Value Propositions (3)
Ways to enhance your weak value proposition:
• Brainstorm with your colleagues
-
Review your marketing material and what you say to customers,
keep asking each other , “so what?” So what if we use this VP, that
VP…. By asking this question over and over again, you’ll get much
closer to the real value you bring to customers.
© 2005 John Wiley & Sons
2. Talk to your customers
- Your existing customers are your best resources to find out what value
you bring. Tell your customer you need help understanding the real
value of your offering and you’d like a chance to learn their
perspective.
PPT5
Chapter 7 – SCA, Synergy and Strategic
Philosophies
© 2005 John Wiley & Sons
1. What is an SCA? What is the difference between an
SCA and a KSF – An SCA is an element or combination of
elements of the business strategy that provide a meaningful,
continuing advantage over current and potential competitors. The
KSF is about points of parity on important dimensions while the SCA
is about points of advantage.
2. What is synergy?- Two businesses operating together will be
superior to the same two businesses operating independently in that
more value is delivered to customers, lower cost, or reduce
investment.
3. For each strategic philosophy, why does it work?
what are the conditions or assumptions? what types
of organization is needed? what can go wrong?
PPT6
For Discussion:
Case: PowerBar
© 2005 John Wiley & Sons
Identify the strategic philosophy that fits PowerBar.
Justify your answers.
PPT7
For Discussion: Strategic Philosophies
Some examples:
Strategic Commitment – Wal-Mart
Strategic Opportunism – Nike, 3M
Strategic Adaptability – PowerBar
Strategic Intent – Canon, Komatsu, Samsung, Honda (requires real
innovation)
© 2005 John Wiley & Sons
Wal-Mart focuses on costs & value
Nike is extremely sensitive to emerging segments (such as
outdoor basketball) and the need for product refinements and
product innovation.
PowerBar has
- competence in identifying and evaluating trends
- A culture that supports the adaptation
- Organizational flexibility so that business creation and
modification can occur quickly
PPT8