Knowing a Winning Business Idea

Harvard Business Review

September/October 2000

W. Chan Kim & Renée Mauborgne

Knowing a

Winning Business Idea Three analytical tools

The buyer utility mapThe price corridor of the massThe business model guide

Knowing a

Winning Business IdeaThe Buyer Utility Map

Knowing a

Winning Business Idea Creating exceptional utility

Buyer experience cycle• Purchase• Delivery• Use• Supplements• Maintenance• Disposal

Knowing a

Winning Business Idea

Knowing a

Winning Business Idea Creating exceptional utility

Six utility levels• Customer productivity• Simplicity• Convenience• Risk• Fun and image• Environmental friendliness

Knowing a

Winning Business Idea How successful innovators have

staked out new spaces on the map.Using a new utility lever

at the same stage.Using the same utility lever

in a new stage.Using a new utility lever

in a new stage.

Knowing a

Winning Business Idea

Knowing a

Winning Business Idea Setting a strategic price

Price must help retain – not merely attract – customers in large numbers.

Step 1: Identify price corridor of mass• Different form, same function• Different form and function, same

objectiveStep 2: Specify a level within the price

corridor

Knowing a

Winning Business Idea

Knowing a Winning Business Idea

Building a profitable business modelWhat is the cost target?Who can we partner with?Which price model should we use?

Knowing a Winning Business Idea

Overcoming adoption hurdlesEmployeesBusiness partnersThe general public