Value Innovation Tab 4

What is a Value Chain or a Value Web?
It identifies each company/entity that is involved
in a buying/selling/using transaction between the
original provider or manufacturer and the end
user
Why is understanding the Value Chain or
Web important?
Because we need to understand who the Most
Important Customer is in the Value Chain
For many B2B’s it’s not their
direct customer

Copyright Value Innovations, Inc. 2004-
© Value Innovations, Inc., 2004-2012. All rights reserved.
2012. All rights reserved

North America Europe
Manufacturer of Manufacturer of
automotive parts automotive parts

Distributor Distributor
Who is the Most
Important
Customer in these
Jobber
value chains?
Auto dealer or Auto dealer or
Repair Shop Repair Shop

Consumer Consumer
B2B


Questions to identify the Most Important Customer
(MIC)

1. If there’s a problem or issue with your offering,
who is responsible for taking the action required
to rectify the situation?

2. Who stands to lose the most financially if there’s
a problem or issue with your offering?

3. Who is the most likely to recognize the value
provided by your offering?


Questions to identify the Most Important Customer
(MIC)

1. If there is a problem or issue with your offering,
who is responsible for taking the action required
to rectify the situation?

2. Who stands to lose the most financially if there is
a problem or issue with your offering?

3. Who is the most likely to recognize the value
provided by your offering?


The 3 Question Template – Identify the MIC

Who has to fix Who stands to Who sees the
the problem? lose financially? Value?
Distributor

Jobber

Auto Dealer X X X

Repair Shop X X X

Consumer


North America Europe
Manufacturer of Manufacturer of
automotive parts automotive parts

Distributor Distributor

Most important Jobber
customer in this
value chain Auto dealer or Auto dealer or
Repair Shop Repair Shop

Consumer Consumer
B2B


Why is this important?
 The manufacturer sells to a small group of
distributors (<20).
 The most important customer is the Repair
Shop owner and the mechanic.
……They live with the problems, NOT the
distributor.
……There are >300,000 auto repair shops.
 If all you do is focus on the distributor, you
are probably not delivering exceptional
value to the Auto Repair Shop


What keeps a Repair Shop Owner awake at night?

 Belts and hoses? NO!
 Where do I find trained mechanics?
 How do I keep my trained mechanics?
 How do I make sure we handle our
customers courteously?
 How do I follow up with my customers?


Value Web


Pharmaceutical Samples
Nina Goodrich, Alcan Pharma Packaging

Who is the Most
Important
Customer in the
value web?

B2B & B2C

Pharmaceutical Samples
Nina Goodrich, Alcan Pharma Packaging

Challenge
Patient taking the right drug
at the right time

Most Important Customer
The Patient

Key Influencers
Prescribing Physician B2B & B2C
Pharmacist
Pharmaceutical Company


When do you use Value Webs?

When Regulatory Bodies affect
what you do, e.g.,
FDA
FAA
NTSB
OSHA, etc

Some Examples
Healthcare
Pharmaceuticals
Chemicals in the Environment


The Most Significant Key Influencers

Knee Replacement
Surgery Value Web
The Most Important Customer Innovations, Inc. 2004-
Copyright Value
in India

Fibers used in Vehicle Armament

Manufacturer of Fibers

Fabricator

Component Manufacturer

Vehicle Manufacturer

Most important
customer in this Military
value chain?
Soldier


Fabricator
Component
Mfr
Vehicle Mfr X

US Military X X X

Soldier X X



First Stepa

Second Step

Third Step

Fourth Step

Fifth Step

a. Step in the Value Chain



Manufacturer of Fibers

Fabricator

Component Manufacturer

Vehicle Manufacturer

Most important Military
customer in this
value chain? Soldier


 The manufacturer produces the “best
performing” fiber in the market…4X better
 But all products meet existing MIL specs.
 The fabricator purchases the lowest priced
fiber that meets MIL specs…
…providing the best protection for the US
military is not on their radar screen


Solution:
 The manufacturer meet with the US Military
share… “we have a fiber which is 4X better but
costs more”
 At that meeting, they propose to set up a
meeting with the military, the Fabricator and
the Value Innovation Team
…the message
…we want you to use this fiber
…cost is a NON ISSUE
…protecting our men and women is THE ISSUE.



Key Learnings:
The manufacturer must interface with the MIC
in order to play in this market.
Continuing to work with the Fabricators is
wasted time
……the MIL Specs have to be changed or
……the Mfr must lower its price


B2B


Thermo King Value Chain - Trucks

Parts and Component Manufacturers

Thermo King Insurance

Dealer/Installer

Truck Fleet Operator Truck Owner

Truck Driver Purchasing Operations
B2B Agent



Insurance X

Dealer X

Truck Fleet
Operator
Purchasing
Operations X X
Driver X X

Truck Owner X X X

B2B


Designed with inputs
from Fleet Ops and
Truck Drivers to
address:
• Fuel Costs
• Operating Costs
• Driver turnover


26 Languages
Touch Screen
500 Temp
settings
Reduced fuel
consumption
4 Year Warranty


Contextual
Interviewing –
3Q, 2006
Line announced
– July 15, 2008
Product shipped
– Sept, 2008



Is it always clear who the MIC is?

No, there are very few cases where you’ll have 3Xs
for one just level in the Value Chain or Value Web

You will always have 2Xs for a level in the Value
Chain or Value Web

If it’s not clear, you have 2 MICs, assume both levels
are MICs and interview both in Step 4. It will
become clear at that point who the MIC is



What do you do when the MIC is a large
organization, e.g., Mass Merchant or
Supermarket?

 You identify the MIC within the MIC using the 3
Questions and the 3 Question Template

 The process is exactly the same

 If you identify purchasing as the MIC, try again!


Value Innovation Tab 4

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