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

Inexpensively Leapfrogging the Competition
THE TRADE-OFF MAP & STRATEGY FOR THE IPHONEShould Apple Cut Down the Price of the iPhone? Dr. Rod King

DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
MARKET (CUSTOMER MAIN DESIRED EXPERIENCE/INTENT/NEED/OBJECTIVE/JOB): …………………………………………………………………..……….
DELIGHT (Fidelity)
PAIN (Inconvenience)

Quality (Content/Performance)
Cost (Price)
Differentiation (Social Status/Cachet)
Inaccessibility/Unavailability
Personalization (Identity/Character)
Complexity (Time)

TOOL
ALTERNATIVES: ………………
Trade-off Quotient (TQ)
= Pain/Delight
= Inconvenience/Fidelity
= Customer Exp. Quotient
SELECTION/ACTION: ………
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing

TRADE-OFF MAP For Total Customer ExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Zero Trade-off
(“What customers ultimately want:
Free, Perfect, Now”)
MARKET (CUSTOMER JOB): ………………………………….
Period/Year: …………….…………………………………………..
High
Luxury Spot
Disruption Spot
(+): DELIGHT
Low
Strategic Choice
Low
High
(-): PAIN

TRADE-OFF MAP Illustrating All StrategiesStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Zero Trade-off
(cf. “Wrecking-ball moment”)
‘Hit’ Zone
MARKET (CUSTOMER JOB): ………………………………….
Period/Year: …………….…………………………………………..
High-end
SuperHit
Sweet Spot
Luxury Spot
Disruption Spot
Oasis
Volcano
DELIGHT:
Fidelity
Low-end
Green Ocean
No Man’s Land
Red Ocean
Fidelity Belly
Convenience
Inconvenience
PAIN: Inconvenience

TRADE-OFF STRATEGY For Luxury Spot Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Name of Business: ………………………………………………………………………………………………….… Year: ……………………
Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
ELEMENTS OF TRADE-OFF STRATEGY FOR LUXURY SPOT-PRODUCT/SERVICE:
Trade-off (Value Chain) Strategy

FIDELITY (Delight) TACTICS:
Eliminate ……………………………………………

- Reduce ……………………………..…..……………
- Increase ……………………….……….……………
- Create/Procure ……………….…….……………

INCONVENIENCE (Pain) TACTICS:
Eliminate ……………………………………………

- Reduce ……………………………..…..……………
- Increase ……………………….……….……………

Create/Procure ……………….…….……………

Customer Value Proposition
High performance (brand) at exclusive price
Targeted Customer Segment(Interviewees)
Well-to-do customers in the ‘short head’
Customer Experience/Value Proposition: …………………………………………………………………………….…………………
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net &http://businessmodels.ning.com & http://twitter.com/RodKuhnKing

Scenarios for Apple’s iPhone
Should Apple drastically cut down the price of the iPhone?

TRADE-OFF MAP for the iPhoneExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal(“Should Apple drastically cut down the price of the iPhone?”)
Zero Trade-off
‘Hit’ Zone
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2007 to Date
Luxury Spot (2009)
SuperHit?
Sweet Spot?
High
Disruption Spot?
Oasis?
DELIGHT:
Fidelity
Low
Fidelity Belly
(Super-)convenience
Low
High
PAIN: Inconvenience

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
Name of Business: Apple, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication/Computing
Mission/Vision: Platform or hub for mobile communication and information processing (computing)
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER IPHONE (2011)
Trade-Off (Value Chain) Strategy

Eliminate ……………………………………………

- Reduce Social Aura & Cachet/Identity (‘Character’)/Love
- Increase Quality (Content/Perform.)/Need

Eliminate ……………………………………………

- Reduce Cost (Price)/Complexity
- Increase Accessibility/Availability/Simplicity

High performance (brand) at lower price
Average customers in the ‘long tail’
Customer Experience/Value Proposition: High functionality-smartphone/mobile computer (that is affordable)

Scenarios for Motorola’s RAZR
Should Motorola have drastically cut down the price of the RAZR?

TRADE-OFF MAP for the RAZR Experience(“Should Motorola have drastically cut down the price of the RAZR?”)
Zero Trade-off
‘Hit’ Zone
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2004 to 2007
Luxury Spot (iPhone - 2007)
High
Volcano (2004)
DELIGHT:
Fidelity
No Man’s Land (2007)
Low
Fidelity Belly
(Super-)convenience
Low
High
PAIN: Inconvenience

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
Name of Business: Motorola, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER RAZR (2007)
Trade-off (Value Chain) Strategy

Eliminate ……………………………………………

- Reduce Social Aura & Cachet/Identity (‘Character’)/Love
- Increase Quality (Content/Perform.)/Need

Eliminate ……………………………………………

- Reduce Cost (Price)/Complexity
- Increase Accessibility/Availability/Simplicity

2004: Superslim camera-phone at high price
2007: Superslim camera-phone at low price
2004: Well-to-docustomers in ‘short head’
2007: Average customers in ‘long tail’
Customer Experience/Value Proposition: Highly aesthetic mobile phone that is affordable

BRAND EQUITY
PROFIT (REVENUE)
COMPETITIVE POSITION IN SECTOR
CUSTOMER LOYALTY
Higher level criteria for assessing impacts of a business strategy:
CUTTING DOWN THE PRICE OF THE IPHONE
CORE COMPETENCE (KNOWLEDGE)
SHAREHOLDER VALUE
STRATEGIIC FIT IN VALUE NETWORK
ECOSYSTEM GROWTH/SUSTAINABLILITY

WHO?
WHAT?
WHERE?
WHY?
DECISION-MAKING QUESTION:
SHOULD APPLE CUT DOWN THE PRICE OF THE IPHONE?
WHEN?
HOW MUCH?
HOW?
WHAT NEXT?