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Value Proposition

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All products and services have a Value Proposition set by the market place. What you offer to the market needs to be designed in order to exceed customer expectations. Learn more about this concept.

Publicado en: Empresariales
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Value Proposition

  1. 1. October 2008 Value Proposition www.stankirkwood.com (Make a comment)
  2. 2. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What does every customer want when making a purchase?
  3. 3. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What are you looking for when you go to buy a car, a television, computer, house,….?
  4. 4. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com You want the greatest return on your investment
  5. 5. Customer Expectations Business Blueprints ™ Copyright: www.stankirkwood.com What is Return on Investment from a customer’s perspective?
  6. 6. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Value Proposition
  7. 7. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com “ What the customer gets for what the customer pays .” Wikipedia
  8. 8. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com “ A business or marketing statement that summarizes why a consumer should buy a product or use a service.” Investopedia
  9. 9. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com How do customers define Value Proposition?
  10. 10. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap
  11. 11. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com How did suppliers meet customer expectations?
  12. 12. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap: Pick Two * http://www.sixside.com/fast_good_cheap.asp *
  13. 13. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>Good, Fast and Cheap, pick two - </li></ul><ul><li>If you want Good and Fast it will not be Cheap </li></ul><ul><li>If you want Good and Cheap it will not be Fast </li></ul><ul><li>If you want Fast and Cheap it will not be Good </li></ul>
  14. 14. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap, pick two Imagine if you are a supplier who can make all three come true at the same time? You will have the compelling Value Proposition and you will win in the market place
  15. 15. Dell Computers Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>Michael Dell – net worth $17.3 billion </li></ul><ul><li>Offered computers to customers: </li></ul><ul><li>Good – quality on par or better than competitors </li></ul><ul><li>Fast – customize PCs delivered in days </li></ul><ul><li>Cheap – equal to or lower than competition. </li></ul><ul><li>Became most profitable supplier of PCs in world </li></ul>
  16. 16. Wal-Mart Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>Wal-Mart – from one store in Arkansas to: </li></ul><ul><li>2,055,000 employees </li></ul><ul><li>$397 Billion in annual sales </li></ul><ul><li>Why? </li></ul><ul><li>Good – quality on par or better than competitors </li></ul><ul><li>Fast – product available on shelves </li></ul><ul><li>Cheap – equal to or lower than competition </li></ul><ul><li>Became largest corporation in world </li></ul>
  17. 17. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Good, Fast and Cheap - Only three of the four components of the Value Proposition There is one more component
  18. 18. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com Desirability
  19. 19. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Desirability in a House: - May be style - May be landscaping - May be number of bathrooms - May be open floor plan
  20. 20. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Desirability in a Car: - May be styling of car - May be options - May be speed - May be gas mileage
  21. 21. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>If a car is: </li></ul><ul><li>Good - has few problems </li></ul><ul><li>Fast - available immediately </li></ul><ul><li>Cheap - affordable </li></ul><ul><li>But </li></ul><ul><li>It is ugly </li></ul><ul><li>Will you buy it? </li></ul>
  22. 22. Desirability Business Blueprints ™ Copyright: www.stankirkwood.com Not if you can help it. Your decision will depend on how you view the four components of the Value Proposition.
  23. 23. Relative Value Business Blueprints ™ Copyright: www.stankirkwood.com Weight of Value Proposition (VP) Components depends on customer segment Quantify the importance of each Value Proposition Component Lead Time Quality Price Desirability VP Components Car 25 25 25 25 All things equal 10 10 5 25 40 15 15 25 70 50 25 10 Empty Nester Family of five College graduate
  24. 24. Value Proposition Attributes Business Blueprints ™ Copyright: www.stankirkwood.com Value Proposition Components are made up of VP Attributes which can be further decomposed into VP Elements. Sun Roof GPS Leather Seats Options Spoiler Mag Wheels Curved bumper Styling Desirability Elements Attributes Component
  25. 25. Management by Design Business Blueprints ™ Copyright: www.stankirkwood.com The key to the Value Proposition effort: Defining and quantifying the Value Proposition so that you can measure and manage it. DQM ² = Define, Quantify, Measure and Manage You are creating a critical path for your company
  26. 26. Management by Design Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>Defining and quantifying the Value Proposition creates a critical path for your company </li></ul><ul><ul><li>Provides clarity of purpose </li></ul></ul><ul><ul><li>Identifies where to focus resources </li></ul></ul>
  27. 27. Business Blueprints ™ Market Performance <ul><li>Focus on what is Important! </li></ul><ul><li>Which Market will you go after? </li></ul>Copyright: www.stankirkwood.com
  28. 28. Business Blueprints ™ Customer Performance <ul><li>Focus on what is Important! </li></ul>Customers use your products and services. Which customers will you appeal to? Copyright: www.stankirkwood.com
  29. 29. Business Blueprints ™ Product Performance <ul><li>Focus on what is Important! </li></ul>Your products and services must have a compelling Value Proposition. Copyright: www.stankirkwood.com
  30. 30. Value Proposition Business Blueprints ™ Copyright: www.stankirkwood.com <ul><li>Several important ideas to remember: </li></ul><ul><li>You should be intentionally designing your products and services based upon the Value Proposition </li></ul><ul><li>The market place establishes the base line for Value Proposition </li></ul><ul><li>The market place keeps changing which means the relevance of every design keeps changing </li></ul><ul><li>All designs become obsolete over time </li></ul>

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