In 03 tilt 2015 niraj dawar
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Transcript of In 03 tilt 2015 niraj dawar
01/03/15
Unleash the Spark of Innovation with
Jugaad!A One-Day Workshop
Session 3: Tilt – Innovation Goes Downstream in the Value Chain
01/03/15
Framework for the Workshop
Post-Lunch
MindspaceIDEO, 7 Rules
Manpower10 Faces
Pre-Lunch
MethodsNABC ExerciseSCAMPERMarketspaceTilt
4Ms: Methods, Marketspace, Mindspace, Manpower
01/03/15
Creative Exercise 3
Join all the dots, using only four straight lines,
without lifting the pen from the paper.
01/03/15
Creative Exercise 3
Join all the dots, using only four straight lines,
without lifting the pen from the paper.
01/03/15
Creative Exercise 3
A solution is not always possible at the same level on
which the problem exists. You need to go beyond the
current boundaries.
Connecting the dots.
01/03/15
Tilt – Repositioning Innovation
Product focused and production oriented companies think their competitive advantages lies in
sourcing, production, logistics and product feature innovation.
01/03/15
Tilt – Repositioning Innovation
However, these activities are more and more often being commoditized or outsourced.
01/03/15
Upstream
Internal – within the company
Access to low-cost suppliers; patents; efficiency in production
Cost leadership or differentiation
New products, technologies, R&D
Erodes as competitors catch up, imitate or leapfrog
Downstream
External – in the marketplace
Market information; customer relationships
Cost and risk reduction
New ways of interacting with customers
Accumulative – can grow with time, experience, networks
Locus of competitive advantage
Types of competitive advantage
Basis of customer value
Innovation
Sustainability of competitive advantage
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70
Tilt – Repositioning Innovation
01/03/15
"Innovation in a downstream facing company is no longer about manufacturing better products.
It is about better ways of interacting with customers, better ways of delivering information to customers,
and better ways of reducing customers' costs and their risks”
Tilt – Repositioning Innovation
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70
01/03/15
In a retail outlet, a
consumer buys a can of
Coke as part of a 6-pack.
The price is about
Rs.15 per can.
Tilt – Repositioning Innovation
These activities are driven by economies of scale.
01/03/15
The same consumer,
on a hot summer day,
gladly pays Rs.90
for a chilled can of Coke
sold at the point-of-thirst
through a vending machine.
Tilt – Repositioning Innovation
These activities are driven by economies of scope.
01/03/15
The focus of innovation has
shifted downstream to
customer satisfaction,
customer acquisition and
customer retention.
Tilt – Repositioning Innovation
Rs. 15
Rs. 90
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
DesigningThe ProductExperience
Data on the Experiential World of the Customer
StructuringThe Customer
Experience
Engaging inDownstreamInnovation
Building the Experiential Platform
1
2
3 4 5
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
Data on the Experiential World of the Customer
Customer Value Creation
• A customer is ready to pay a 500 per cent price premium for a can of Coke delivered to her from a tailor-made machine in whatever the circumstances she wants it.
1
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
Data on the Experiential World of the Customer
Building the Experiential Platform
• It is chilled, it is single serve and it is at the point of thirst, thus moving the concentration away from upstream activities
1
Innovation Space
2
01/03/15
Tilt – Repositioning Innovation
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70
01/03/15
In the last 10 years there have been two major innovations
in the automobile industry.
Tilt – Repositioning Innovation
http://www.dgermancar.com/volkswagen/volkswagen-golf-blue-motion-races-2011-rac-future-car-challenge.html
An Upstream Strategy(on the product side)
Electric engines
are replacing IC engines
01/03/15
What is downstream strategy?
Different customers have different needs.
Tilt – Repositioning Innovation
http://www.responsys.com/blogs/nsm/cross-channel-marketing/secret-customer-centric-innovation-qa-niraj-dawar/
01/03/15
A downstream strategy means …
Noticing how customers have very different needs than what the automobile industry typically provides.
Tilt – Repositioning Innovation
http://www.responsys.com/blogs/nsm/cross-channel-marketing/secret-customer-centric-innovation-qa-niraj-dawar/
01/03/15
What is downstream strategy?
Instead of selling a customer one car, what if you sold a temporary ownership which would allow them
to specify the type of car that they would need for a few hoursor a few days?
Tilt – Repositioning Innovation
http://www.responsys.com/blogs/nsm/cross-channel-marketing/secret-customer-centric-innovation-qa-niraj-dawar/
01/03/15
In the last 10 years there have been two major innovations
in the automobile industry.
Tilt – Repositioning Innovation
http://www.dgermancar.com/volkswagen/volkswagen-golf-blue-motion-races-2011-rac-future-car-challenge.html
DownstreamOn the customer side
temporary ownership.
01/03/15
Why would customers prefer temporary ownership?
Brands such as Zipcar have created a rental model similar to the hourly bicycle rental. This innovation is huge and will growto be even bigger as consumers realize that the cars we buy are
kept parked for 90 % of the time and are only used for 10 % of the time, so why pay for the other 90 %?
Tilt – Repositioning Innovation
http://www.responsys.com/blogs/nsm/cross-channel-marketing/secret-customer-centric-innovation-qa-niraj-dawar/
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
Data on the Experiential World of the Customer
Customer Value Creation
A customer is ready to pay a price premium for a car that can be a SUV for one weekend and a family car for the next.
1
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
Data on the Experiential World of the Customer
Building the Experiential Platform
Think of one customer who needs a variety of different vehicles for different activities who’s only interest is temporary purchase.
1
Innovation Space
2
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
DesigningThe ProductExperience
Data on the Experiential World of the Customer
StructuringThe Customer
Experience
Engaging inDownstreamInnovation
Building the Experiential Platform
1
2
3 4 5
01/03/15
Tilt – Repositioning Innovation
http://bit.ly/1k8a0Tq A T Kearney – Reducing Complexity in Retail Banking
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
“To compete effectively, companies must shift from upstream to downstream activities,
emphasizing how they define their competitive set, influence customers’ purchase criteria, innovate to solve customer problems,
and build advantage by accumulating customer data and harnessing the network effect.”
Innovation is hugely successful on more “downstream activities” close to the customer.
Tilt – Repositioning Innovation
01/03/15
Innovating in the customer experience.
The sign-on to Fidor Bank is through Facebook Connect which,
at this time, is one of the only bank that would work this way.
Tilt – Repositioning Innovation
01/03/15
For every 2,000 Facebook likes that Fidor receives, it raises the interest rate on FidorPay checking accounts by
10 basis points per year (with a cap of 15% per year).
Tilt – Repositioning Innovation
01/03/15
Fidor Bank is changing the banking service market
by understanding the
convenience of social mediaand
engaging customers toco-design products
and engaging community
to give peer-to-peer supportand
rewarding customers forspecific social interactions
Tilt – Repositioning Innovation
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70
01/03/15
Tilt – Repositioning Innovation
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
DesigningThe ProductExperience
Data on the Experiential World of the Customer
StructuringThe Customer
Experience
Engaging inDownstreamInnovation
Building the Experiential Platform
1
2
3 4 5
01/03/15
Tilt Matrix - Touchpoints, Customer Costs, Customer Risks
Prepurchase Purchase delivery,installation
Usage Maintenance Disposal, renewal
Costs incurred bycustomers
Risksincurred bycustomers
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P62
Tilt – Repositioning Innovation
Fidor Bank – Downstream Advantage
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
Tilt – Repositioning Innovation
Accenture - New Banking Distribu1on Modelshttp://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf
01/03/15
• Customer interaction, rather than the factory, becomes the core of business innovation.
• The central strategic question changes from "How much more can we sell?" to
"Why do customers buy from us?" and "What else does the customer need?”
• Innovation to focus on how to reduce customers' costs and risks.
• Competitive advantage can be gained by innovatively managing the flow of information
in marketplace networks.
Tilt – Repositioning Innovation
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70
01/03/15
Touchpoints, Customer Costs, Customer Risks
Prepurchase Purchase delivery,installation
Usage Maintenance Disposal, renewal
Costs incurred bycustomers
Risksincurred bycustomers
Tilt – Products to Customers
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P62
Apply the Tilt Matrix to ChotuKool
01/03/15
Making Innovation Work
References Tilt Shifting Your Strategy From
Products to Consumers
By Niraj Dawar Harvard Business
Review Press
01/03/15
Framework for the Workshop
Post-Lunch
MindspaceIDEO, 7 Rules
Manpower10 Faces
Pre-Lunch
MethodsNABC ExerciseSCAMPERMarketspaceTilt
4Ms: Methods, Marketspace, Mindspace, Manpower