© 2005 John Wiley & Sons PPT1 Chapter 8 – Alternative Value Propositions 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

© 2005 John Wiley & Sons PPT2 For Discussion: 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

© 2005 John Wiley & Sons PPT3 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)

© 2005 John Wiley & Sons PPT4 For Discussion: Value Propositions (2) 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)

© 2005 John Wiley & Sons PPT5 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. 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.

© 2005 John Wiley & Sons PPT6 Chapter 7 – SCA, Synergy and Strategic Philosophies 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?

© 2005 John Wiley & Sons PPT7 For Discussion: Case: PowerBar Identify the strategic philosophy that fits PowerBar. Justify your answers.

© 2005 John Wiley & Sons PPT8 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) 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