VALUE PROPOSITION IN KNOWLEDGE ECONOMY A.S.Rao [email_address]

Value proposition Value delivered to the customer results in a satisfied customer, who will pay a reasonable price in return for the product service. Value is the worth, importance or usefulness to the customer.

Value delivered to the customer results in a satisfied customer, who will pay a reasonable price in return for the product service.

Value is the worth, importance or usefulness to the customer.

Value creation To create value, a firm needs to : Understand how customers needs evolve Understand how technologies evolve Develop world class products and services that meet customer needs

To create value, a firm needs to :

Understand how customers needs evolve

Understand how technologies evolve

Develop world class products and services that meet customer needs

T-CUBE-INTEGRATING TLC, MARKET SEGMENTS AND INNOVATION STRATEGY To understand the complexities involved in positioning a firm, small or big, one must look at all the three dimensions; Technology Life Cycle (TLC), Market segment and Innovation strategy.

To understand the complexities involved in positioning a firm, small or big, one must look at all the three dimensions; Technology Life Cycle (TLC), Market segment and Innovation strategy.

TLC maket segments innovation strategy

STAGES IN TECHNOLOGY LIFE CYCLE Inception point Stage 1 Technology Development Stage 2 Technology Application Stage 3 Application launch Stage 4 Application growth Stage 5 Technology maturity Stage 6 Degraded technology

Inception point

Stage 1 Technology Development

Stage 2 Technology Application

Stage 3 Application launch

Stage 4 Application growth

Stage 5 Technology maturity

Stage 6 Degraded technology

Y-axis-MARKET SEGMENTS Innovator …. Technology enthusiast Early adopter …. Visionary Early majority…. Pragmatist Late majority …. conservative Laggard…. skeptic

Innovator …. Technology enthusiast

Early adopter …. Visionary

Early majority…. Pragmatist

Late majority …. conservative

Laggard…. skeptic

Z-axis-INNOVATION STRATEGY First mover strategy -Pioneering advantage, is realized only if the first mover succeeds in framing consumer preferences. Fast second strategy Imitator strategy - Best approach for a late entrant is to imitate and improve. Pure imitations, blatant knock-offs do not work well. Lower price matters if market can also be expanded like in Micro ovens. Innovation is all about finding new ways to do things and to obtain strategic advantage, so there will be room for new ways of gaining and retaining advantage .

First mover strategy -Pioneering advantage, is realized only if the first mover succeeds in framing consumer preferences.

Fast second strategy

Imitator strategy - Best approach for a late entrant is to imitate and improve. Pure imitations, blatant knock-offs do not work well. Lower price matters if market can also be expanded like in Micro ovens. Innovation is all about finding new ways to do things and to obtain strategic advantage, so there will be room for new ways of gaining and retaining advantage .

Value drivers Product- performance, quality, features, brand, selection, search, ease to use, safe Price -fair, visible, consistent, reasonable Access -convenient, location, nearby, at-hand, easy to find Services - ordering, delivery, return, check-in Experience -emotional, respect, ambience, fun, intimacy, relationship, community

Product- performance, quality, features, brand, selection, search, ease to use, safe

Price -fair, visible, consistent, reasonable

Access -convenient, location, nearby, at-hand, easy to find

Services - ordering, delivery, return, check-in

Experience -emotional, respect, ambience, fun, intimacy, relationship, community

Value creation from technology license Technology Acquisition technology absorption Including Adoption targeted learning Creative adaptation Value added innovation

Technology Acquisition

technology absorption Including Adoption

targeted learning

Creative adaptation

Value added innovation

Value creation from lab technologies- Triple helix model The triple helix comprises universities and other knowledge producing institutions, industry including high tech start-ups, MNCs and government at various levels. In-house absorption capacity

The triple helix comprises universities and other knowledge producing institutions, industry including high tech start-ups, MNCs and government at various levels.

In-house absorption capacity

VALUE CAPTURE with IPR PROTECTION OF IDEAS AND INFORMATION-Innovative Ideas are protected under Patents, confidential information is protected under Trade Secrets. PROTECTION OF FORM AND APPERANCE- Copyright, Industrial Designs and IC layout PROTECTING IMAGE AND REPUTATION- Trademark and Geographical Indications

PROTECTION OF IDEAS AND INFORMATION-Innovative Ideas are protected under Patents, confidential information is protected under Trade Secrets.

PROTECTION OF FORM AND APPERANCE- Copyright, Industrial Designs and IC layout

PROTECTING IMAGE AND REPUTATION-

Trademark and Geographical Indications

VALUE DELIVERY VALUE DELIVERY THROUGH PRODUCT INNOVATIONS Value delivery with organizational innovations Technology fort

VALUE DELIVERY THROUGH PRODUCT INNOVATIONS

Value delivery with organizational innovations

Technology fort

When markets tip probably next consumer buys product A

Dealing with front end fuzziness Quality Function Deployment (QFD) How to spot a winner Stage-gate model of innovation

Quality Function Deployment (QFD)

How to spot a winner

Stage-gate model of innovation

Timing Late entry does not postpone earnings 6 months delay-1/3 rd reduction 12months delay-market disappears

Late entry does not postpone earnings

6 months delay-1/3 rd reduction

12months delay-market disappears

Value proposition delivered Product, price, access, service, experience One value is selected to dominate the value proposition offered to the customer A second value differentiates the offering And remaining 3 must meet the industry norms

Product, price, access, service, experience

One value is selected to dominate the value proposition offered to the customer

A second value differentiates the offering

And remaining 3 must meet the industry norms

Examples Google- primary value is product with fast , relevant results. Secondary value is access-easy online. Service is secondary for Intel. Wal mart, Deccan primary value is price. Spice jet in addition offers experience. McDonald primary offer is access and secondary service. Dell computer-primary service, secondary access. Harley motor bikes primary offer is experience, which is secondary for Mercedes.

Google- primary value is product with fast , relevant results. Secondary value is access-easy online. Service is secondary for Intel.

Wal mart, Deccan primary value is price. Spice jet in addition offers experience.

McDonald primary offer is access and secondary service.

Dell computer-primary service, secondary access.

Harley motor bikes primary offer is experience, which is secondary for Mercedes.

Thank U Questions please?

Questions please?