Wednesday, January 24: Value and Growth Admin details Takeaways last time Value venue and voting...
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Transcript of Wednesday, January 24: Value and Growth Admin details Takeaways last time Value venue and voting...
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do now? Course model and conclusions
Admin Details Course handout, submitted to the copy
shop Out of all the written assignments, only 4
have to be turned in: A4, A7, A11 and A21 (Xerox case) or A22 (Dell Case)
Next week (Jan. 31)• 1 chapter (R3. Dickson chapter 1)• 1 short case (A5. JNJ Stent)• 1 longer case (A6. Reatta) • Nothing written due
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do now? Course model and conclusions
Key Takeaways: Last Week
Success in well-defined competitive games (Intergalactic Widgets) with complete information requires trying to see the world from your competitor’s perspective. See if you can encourage cooperation. If not, then defect in every period.
In real markets, a third option exists -- redefine the game and the market by creating superior customer value (e.g., Formule 1, Walter, Milliken, Compaq Servers).
Key Takeaways: Last Week
Good strategic thinking in today’s hypercompetitive environment is hindered by natural biases and organizational constraints.
Getting good requires discipline in approaching and diagnosing problems and an emphasis on experimentation and speed.
Learning how to make good strategic decisions takes practice -- that’s what simulations are all about.
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do now? Course model and conclusions
Value Venue and Voting There are 3 awards to be given
today: • Jack Welch Award: For the best
illustration of truly unique value/innovation. • Insight.Com Award: For the most
insightful presentation of value concepts; provides the most insight into the meaning of unique value
•Picasso Award: For the best design.
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do now? Course model and conclusions
Impressions of Value What are your impressions of unique
value in the marketplace? • How do companies tend to create value? • What is “value innovation?” (core philosophical
premises?) • Is it consistent with Gale’s suggested pursuit of
superior relative competitive value?” • How prevalent is value innovation?
How do companies come upon ideas for creating unique value?
Customer perceptions of value… are multi-dimensional have dimensions that can be organized into
categories have dimensions that constantly change over
time (e.g., Compaq servers) are linked directly to customer decision-making
and action can be measured. are different for different segments of the market in the end, are the core determinant of growth
and financial performance
Customer Preference
n
Preferencej = Σ Bij Ii i=1
j=brand j B = belief about brand j on attribute iI = importance of attribute i
Customer Premises Switching Equipment
Attribute Imp. US THEM
Reliability .40 4 4
Easy-to-use .20 4 2
Functions .40 3 5
Customer Premises Switching Equipment
Attribute Imp. US THEM
Reliability .40 4 4
Easy-to-use .20 4 2
Functions .40 3 5
Preference scores: US: (4*.4)+(4*.2)+(3*.4) = 3.6 THEM: (4*.4)+(2*.2)+(5*.4) = 4.0
Customer perceptions of value… are multi-dimensional have dimensions that can be organized into
categories have dimensions that change over time are linked directly to customer decision-making
and action can be measured are different for different segments of the market in the end, are the core determinant of growth
and financial performance
Categorizing Attributes/Benefits
Attribute Type Growth Questions
7. Basic: stakes of the game (we think)
6. Fading: declining weight
5. Key: makes the difference (today)
4. Pacing: getting momentum
3. Unique: pioneer scores well
2. Desired: known, not ready
1. Latent: not apparent yet
Categorizing Attributes/Benefits
Attribute Type Growth Questions
7. Basic: stakes of the game (we think)
Which factors that our industry takes for granted should be eliminated?
6. Fading: declining weight
5. Key: makes the difference (today)
4. Pacing: getting momentum
3. Unique: pioneer scores well
2. Desired: known, not ready
1. Latent: not apparent yet
Categorizing Attributes/Benefits
Attribute Type Growth Questions
7. Basic: stakes of the game (we think)
Which factors that our industry takes for granted should be eliminated?
6. Fading: declining weight Which factors should be reduced well below the industry’s standard?
5. Key: makes the difference (today)
4. Pacing: getting momentum
3. Unique: pioneer scores well
2. Desired: known, not ready
1. Latent: not apparent yet
Categorizing Attributes/Benefits
Attribute Type Growth Questions
7. Basic: stakes of the game (we think)
Which factors that our industry takes for granted should be eliminated?
6. Fading: declining weight Which factors should be reduced well below the industry’s standard?
5. Key: makes the difference (today)
4. Pacing: getting momentum
3. Unique: pioneer scores well Which factors should be raised above the industry standard?
2. Desired: known, not ready
1. Latent: not apparent yet
Categorizing Attributes/Benefits
Attribute Type Growth Questions
7. Basic: stakes of the game (we think)
Which factors that our industry takes for granted should be eliminated?
6. Fading: declining weight Which factors should be reduced well below the industry’s standard?
5. Key: makes the difference (today)
4. Pacing: getting momentum
3. Unique: pioneer scores well Which factors should be raised above the industry standard?
2. Desired: known, not ready
1. Latent: not apparent yet Which factors should be created that the industry has never offered?
Sources of Utility (value)
“Platform” Delivers:
Product Form Utility
Service Information Utility Experiential Utility Relationship Utility
Delivery Time Utility Place Utility
Mktg Program Information Utility Transaction Utility Relationship Utility
Customer perceptions of value… are multi-dimensional have dimensions that can be organized into
categories have dimensions that change over time are linked directly to customer decision-
making and action can be measured are different for different segments of the
market in the end, are the core determinant of
growth and financial performance
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do
now? Course model and conclusions
As a manager, what do I do now? Think broadly in defining define the
dimensions of value. In seeking growth: prompt your team with
good questions focused on customer value Always ask “worth what you paid for it” Benchmark competitors but don’t let
competitors define or constrain you. Using the results: important to align the
organization (e.g., processes, reward structure)
Wednesday, January 24: Value and Growth
Admin details Takeaways last time Value venue and voting Impressions of value As a manager, what do I do now? Course model and conclusions
2. Evaluate
4. Implement
5. Feedback/ Adaptation
1. UncoverGrowthOpportunities
Model of the Firm
3. Design Programs: -choose the value -design/create the value -communicate the value -deliver the value