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Inexpensively Leapfrogging the Competition<br />THE TRADE-OFF MAP & STRATEGY FOR THE IPHONEShould Apple Cut Down the Price...
DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />MARKET (CUSTOMER MAIN DE...
  Cost (Price)
Differentiation (Social Status/Cachet)
  Inaccessibility/Unavailability
Personalization (Identity/Character)
  Complexity (Time)</li></ul>TOOL<br />ALTERNATIVES:  ………………<br />Trade-off Quotient (TQ)<br />= Pain/Delight<br />= Incon...
TRADE-OFF MAP For Total Customer ExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />Ze...
TRADE-OFF MAP Illustrating All StrategiesStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />Zero...
TRADE-OFF STRATEGY For Luxury Spot Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal <br />Name of B...
 Eliminate ……………………………………………</li></ul>- Reduce ……………………………..…..……………<br />- Increase ……………………….……….……………<br />- Create/Pro...
 Eliminate ……………………………………………</li></ul>- Reduce ……………………………..…..……………<br />- Increase ……………………….……….……………<br /><ul><li> Cre...
Scenarios for Apple’s iPhone<br />Should Apple drastically cut down the price of the iPhone?<br />
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Trade-off Map and Strategy for the iPhone: Should Apple Cut Down the Price of the iPhone?

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Industry Analysts are speculating that as Apple expands coverage of the iPhone especially in Asia, Apple will have to slash the price of the iPhone. This expectation appears logical, given the laws of supply and demand. However, will the iPhone loses its 'coolness' and ultimately, its desirability and profit as Apple expands?

This presentation provides a systematic framework for analyzing and answering the above question. The Trade-Off Map as well as ideas from Kevin Maney's new book, "Trade-Off," play a key role in the analysis.

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Transcript of "Trade-off Map and Strategy for the iPhone: Should Apple Cut Down the Price of the iPhone?"

  1. 1. Inexpensively Leapfrogging the Competition<br />THE TRADE-OFF MAP & STRATEGY FOR THE IPHONEShould Apple Cut Down the Price of the iPhone?  Dr. Rod King<br />
  2. 2. DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />MARKET (CUSTOMER MAIN DESIRED EXPERIENCE/INTENT/NEED/OBJECTIVE/JOB): …………………………………………………………………..……….<br />DELIGHT (Fidelity)<br />PAIN (Inconvenience)<br /><ul><li> Quality (Content/Performance)
  3. 3. Cost (Price)
  4. 4. Differentiation (Social Status/Cachet)
  5. 5. Inaccessibility/Unavailability
  6. 6. Personalization (Identity/Character)
  7. 7. Complexity (Time)</li></ul>TOOL<br />ALTERNATIVES: ………………<br />Trade-off Quotient (TQ)<br />= Pain/Delight<br />= Inconvenience/Fidelity<br />= Customer Exp. Quotient<br />SELECTION/ACTION: ………<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  8. 8. TRADE-OFF MAP For Total Customer ExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />Zero Trade-off<br />(“What customers ultimately want:<br />Free, Perfect, Now”)<br />MARKET (CUSTOMER JOB): ………………………………….<br />Period/Year: …………….…………………………………………..<br />High<br />Luxury Spot<br />Disruption Spot<br />(+): DELIGHT<br />Low<br />Strategic Choice<br />Low<br />High<br />(-): PAIN<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  9. 9. TRADE-OFF MAP Illustrating All StrategiesStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal<br />Zero Trade-off<br />(cf. “Wrecking-ball moment”)<br />‘Hit’ Zone<br />MARKET (CUSTOMER JOB): ………………………………….<br />Period/Year: …………….…………………………………………..<br />High-end<br />SuperHit<br />Sweet Spot<br />Luxury Spot<br />Disruption Spot<br />Oasis<br />Volcano<br />DELIGHT:<br />Fidelity<br />Low-end<br />Green Ocean<br />No Man’s Land<br />Red Ocean<br />Fidelity Belly<br />Convenience<br />Inconvenience<br />PAIN: Inconvenience <br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  10. 10. TRADE-OFF STRATEGY For Luxury Spot Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal <br />Name of Business: ………………………………………………………………………………………………….… Year: ……………………<br />Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………<br />Mission/Vision: ……………………………..……………………………………………………………………………………….…………………<br />ELEMENTS OF TRADE-OFF STRATEGY FOR LUXURY SPOT-PRODUCT/SERVICE:<br />Trade-off (Value Chain) Strategy<br /><ul><li> FIDELITY (Delight) TACTICS:
  11. 11. Eliminate ……………………………………………</li></ul>- Reduce ……………………………..…..……………<br />- Increase ……………………….……….……………<br />- Create/Procure ……………….…….……………<br /><ul><li> INCONVENIENCE (Pain) TACTICS:
  12. 12. Eliminate ……………………………………………</li></ul>- Reduce ……………………………..…..……………<br />- Increase ……………………….……….……………<br /><ul><li> Create/Procure ……………….…….……………</li></ul>Customer Value Proposition<br />High performance (brand) at exclusive price<br />Targeted Customer Segment(Interviewees)<br />Well-to-do customers in the ‘short head’<br />Customer Experience/Value Proposition: …………………………………………………………………………….…………………<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
  13. 13. Scenarios for Apple’s iPhone<br />Should Apple drastically cut down the price of the iPhone?<br />
  14. 14. TRADE-OFF MAP for the iPhoneExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal(“Should Apple drastically cut down the price of the iPhone?”)<br />Zero Trade-off<br />(cf. “Wrecking-ball moment”)<br />‘Hit’ Zone<br />MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2007 to Date<br />Luxury Spot (2009)<br />SuperHit?<br />Sweet Spot?<br />High<br />Disruption Spot?<br />Oasis?<br />DELIGHT:<br />Fidelity<br />Low<br />Fidelity Belly<br />(Super-)convenience<br />Low<br />High<br />PAIN: Inconvenience <br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  15. 15. TRADE-OFF STRATEGY for the iPhone (2009 & 2011) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal Scenarios of the iPhone for 2009 and 2011<br />Name of Business: Apple, Inc. Year: 2009<br />Sector/Ecosystem/Industry: Communication/Computing<br />Mission/Vision: Platform or hub for mobile communication and information processing (computing)<br />ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER IPHONE (2011)<br />Trade-Off (Value Chain) Strategy<br /><ul><li> FIDELITY (Delight) TACTICS:
  16. 16. Eliminate ……………………………………………</li></ul>- Reduce Social Aura & Cachet/Identity (‘Character’)/Love<br />- Increase Quality (Content/Perform.)/Need<br />- Create/Procure ……………….…….……………<br /><ul><li> INCONVENIENCE (Pain) TACTICS:
  17. 17. Eliminate ……………………………………………</li></ul>- Reduce Cost (Price)/Complexity<br />- Increase Accessibility/Availability/Simplicity<br /><ul><li> Create/Procure ……………….…….……………</li></ul>Customer Value Proposition<br />High performance (brand) at lower price<br />Targeted Customer Segment(Interviewees)<br />Average customers in the ‘long tail’<br />Customer Experience/Value Proposition: High functionality-smartphone/mobile computer (that is affordable)<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
  18. 18. Scenarios for Motorola’s RAZR<br />Should Motorola have drastically cut down the price of the RAZR?<br />
  19. 19. TRADE-OFF MAP for the RAZR Experience(“Should Motorola have drastically cut down the price of the RAZR?”)<br />Zero Trade-off<br />(cf. “Wrecking-ball moment”)<br />‘Hit’ Zone<br />MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2004 to 2007<br />Luxury Spot (iPhone - 2007)<br />High<br />Volcano (2004) <br />DELIGHT:<br />Fidelity<br />No Man’s Land (2007)<br />Low<br />Fidelity Belly<br />(Super-)convenience<br />Low<br />High<br />PAIN: Inconvenience <br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  20. 20. TRADE-OFF STRATEGY for the RAZR (2004 & 2007) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal Scenarios of the RAZR for 2002 and 2007<br />Name of Business: Motorola, Inc. Year: 2009<br />Sector/Ecosystem/Industry: Communication<br />Mission/Vision: ……………………………..……………………………………………………………………………………….…………………<br />ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER RAZR (2007)<br />Trade-off (Value Chain) Strategy<br /><ul><li> FIDELITY (Delight) TACTICS:
  21. 21. Eliminate ……………………………………………</li></ul>- Reduce Social Aura & Cachet/Identity (‘Character’)/Love<br />- Increase Quality (Content/Perform.)/Need<br />- Create/Procure ……………….…….……………<br /><ul><li> INCONVENIENCE (Pain) TACTICS:
  22. 22. Eliminate ……………………………………………</li></ul>- Reduce Cost (Price)/Complexity<br />- Increase Accessibility/Availability/Simplicity<br /><ul><li> Create/Procure ……………….…….……………</li></ul>Customer Value Proposition<br />2004: Superslim camera-phone at high price<br />2007: Superslim camera-phone at low price<br />Targeted Customer Segment(Interviewees)<br />2004: Well-to-docustomers in ‘short head’<br />2007: Average customers in ‘long tail’<br />Customer Experience/Value Proposition: Highly aesthetic mobile phone that is affordable<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing<br />
  23. 23. BRAND EQUITY<br />PROFIT (REVENUE)<br />COMPETITIVE POSITION IN SECTOR<br />CUSTOMER LOYALTY<br />Higher level criteria for assessing impacts of a business strategy:<br />CUTTING DOWN THE PRICE OF THE IPHONE<br />CORE COMPETENCE (KNOWLEDGE)<br />SHAREHOLDER VALUE<br />STRATEGIIC FIT IN VALUE NETWORK<br />ECOSYSTEM GROWTH/SUSTAINABLILITY<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
  24. 24. WHO?<br />WHAT? <br />WHERE?<br />WHY?<br />DECISION-MAKING QUESTION:<br />SHOULD APPLE CUT DOWN THE PRICE OF THE IPHONE?<br />WHEN?<br />HOW MUCH?<br />HOW?<br />WHAT NEXT?<br />Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing<br />
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