Geert Desmet                                               Maastricht, 15-06-2011                      value creation & su...
Geert Desmet                                                                                                      Maastric...
Geert Desmet                                                            Maastricht, 15-06-2011                            ...
Geert Desmet                                                                                    Maastricht, 15-06-2011    ...
Geert Desmet                                                                                      Maastricht, 15-06-2011  ...
Geert Desmet                                                                                             Maastricht, 15-06...
Geert Desmet                                                                         Maastricht, 15-06-2011               ...
Geert Desmet                                                                               Maastricht, 15-06-2011         ...
Geert Desmet                                                                              Maastricht, 15-06-2011          ...
Geert Desmet                                                                             Maastricht, 15-06-2011           ...
Geert Desmet                                                                              Maastricht, 15-06-2011          ...
Geert Desmet                                                                            Maastricht, 15-06-2011            ...
Geert Desmet                                                                                  Maastricht, 15-06-2011      ...
Geert Desmet                                                                              Maastricht, 15-06-2011          ...
Geert Desmet                                                                                                Maastricht, 15...
Geert Desmet                                                                               Maastricht, 15-06-2011         ...
Geert Desmet                                                                            Maastricht, 15-06-2011            ...
Geert Desmet                                                                                 Maastricht, 15-06-2011       ...
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CFO/Controllers Circle 2011, sessie 2

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CFO/Controllers Circle sessie 2, 15 juni 2011

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CFO/Controllers Circle 2011, sessie 2

  1. 1. Geert Desmet Maastricht, 15-06-2011 value creation & sustainable competitive advantage waardecreatie & duurzaam concurrentievoordeel Geert Desmet Adjunct Professor of Strategic Marketing the big pictureControllers Circle 1
  2. 2. Geert Desmet Maastricht, 15-06-2011 the ‘Value Model’ © Prof. F. Caeldries • what is perceived • external analysis to deliver value to • market & business the customer: value developments value proposition creation • business modelling • value chain & web • strategic leadership • capturing value value value VISION control delivery • performance • what business are we in measurement • vision • mission • ambition value • organizational modelling architecture • organizational challenges Maastricht, 15-06-2011 Controllers Circle 4 the ‘Value Model’ © Prof. F. Caeldries value creation value value VISION control delivery value architecture Maastricht, 15-06-2011 Controllers Circle 5Controllers Circle 2
  3. 3. Geert Desmet Maastricht, 15-06-2011 (customer) value creation (klant-) waardecreatie business strategy “Strategy is the art of creating value for the customer. This can only be done by offering a product or service that corresponds to customer needs. In a fast changing business environment, the factors that determine value are constantly changing.” Adrian Slywotzky Maastricht, 15-06-2011 Controllers Circle 7Controllers Circle 3
  4. 4. Geert Desmet Maastricht, 15-06-2011 customer value build up customer value creation - problem solving capacity - what the product does product - technical quality benefits - complementarities brand - compatibility benefits - innovativeness service benefits - up-to-datedness - etc. (Based on Kotler, 2001,, Frambach, 2001, Anderson & Narus, 1999, Best 2000, ) Maastricht, 15-06-2011 Controllers Circle 8 customer value build up customer value creation - its claim to fame product - trust benefits - reliability - status brand benefits - brand personality / image service benefits - etc. (see also Kapferer, 2003) Maastricht, 15-06-2011 Controllers Circle 9Controllers Circle 4
  5. 5. Geert Desmet Maastricht, 15-06-2011 customer value build up - SLA’s customer value creation - location (retailer) product benefits - parking space - speed of delivery brand - never out of stock benefits service - on-site assistance benefits - pre & after sales services - etc. Maastricht, 15-06-2011 Controllers Circle 10 customer value build up customer value creation product benefits all efforts a customer must price make to obtain the brand product benefits service acquisition benefits costs Maastricht, 15-06-2011 Controllers Circle 11Controllers Circle 5
  6. 6. Geert Desmet Maastricht, 15-06-2011 customer value build up customer value creation customer value product benefits price brand benefits service acquisition benefits costs Maastricht, 15-06-2011 Controllers Circle 12 how customers perceive value customer H excitement ‘Wow’ loyalty attributes performance attributes L H competitive performance threshold attributes (basic requirements) L Maastricht, 15-06-2011 Controllers Circle 16Controllers Circle 6
  7. 7. Geert Desmet Maastricht, 15-06-2011 value proposition waardepropositie value proposition who who: served customer groups (segments) what: served customer functions (needs) how: technologies utilised (satisfaction mechanism) what how Derek F. Abell domain matrix (Harvard) Maastricht, 15-06-2011 Controllers Circle 22Controllers Circle 7
  8. 8. Geert Desmet Maastricht, 15-06-2011 value proposition - what who ‘what’ = bundle of attributes • threshold attributes • performance attributes • excitement attributes what how Maastricht, 15-06-2011 Controllers Circle 23 historical perspective: what is a “value proposition”? The ‘product’…. is the total bundle of benefits the customer receives when he or she buys it” Theodore Levit, 1980 Maastricht, 15-06-2011 Controllers Circle 24Controllers Circle 8
  9. 9. Geert Desmet Maastricht, 15-06-2011 what to offer: value proposition from the 4 P’s to the 4 (value driven) C’s Product to Customer value Promotion to Communication Place to Convenience Price to Costs (based on Kotler, 2001,, Frambach, 2001, Anderson & Narus, 1999, Best 2000, ) Maastricht, 15-06-2011 Controllers Circle 25 value creation & innovation customer H excitement ‘Wow’ attributes satisfaction radical ? performance ? attributes incremental L H competitive performance threshold ? process attributes (basic requirements) L Maastricht, 15-06-2011 Controllers Circle 26Controllers Circle 9
  10. 10. Geert Desmet Maastricht, 15-06-2011 sustainable competitive advantage duurzaam concurrentievoordeel competitive advantage competitive advantage is all about choosing a distinctive customer value proposition: “A (marketing) strategy must start with a different value proposition. Strategy delineates a territory in which a company seeks to be unique. It is about making choices. You can’t be all things to all people” M. Porter, interview in Fast Company (March 2001) Maastricht, 15-06-2011 Controllers Circle 30Controllers Circle 10
  11. 11. Geert Desmet Maastricht, 15-06-2011 distinctive value proposition who how to make the value proposition distinctive: – be different or – be better (one way to be better is to what be cheaper) how Maastricht, 15-06-2011 Controllers Circle 32 developing a differentiated value proposition REDUCE what factors should be reduced well below the industry standard? ELIMINATE CREATE what factors should what factors should be eliminated that NEW VALUE be created that the the industry has PROPOSITION industry has never taken for granted? offered? what factors should be raised well beyond the industry standard? RAISE Maastricht, 15-06-2011 Controllers Circle 33Controllers Circle 11
  12. 12. Geert Desmet Maastricht, 15-06-2011 differentiation: “typical” industry value industry curves player average “almost ideal” value-attributes attribute 1 value attribute 2 curve - …… - …… - …… - …… - …… “ideal” value - …… curve - …… - …… - …… - attribute last low performance high Maastricht, 15-06-2011 Controllers Circle 35 competitive advantage “Competitive Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” Maastricht, 15-06-2011 Controllers Circle 39Controllers Circle 12
  13. 13. Geert Desmet Maastricht, 15-06-2011 competitive advantage … per segment not alle customers want the same … so: * niche-marketing or * portfolio-management Maastricht, 15-06-2011 Controllers Circle 40 unsegmentation segmentation segmentation • comprehensive / portfolio • selective niche customization / 1-to-1 • pure • tailored • standardized Maastricht, 15-06-2011 Controllers Circle 41Controllers Circle 13
  14. 14. Geert Desmet Maastricht, 15-06-2011 fundamental options for business strategy Treacy & Wiersema’s 3 strategies product leadership “best product” “best product” focus: innovation operational excellence product leadership “best total cost” focus: supply chain management operational customer excellence intimacy customer intimacy “best solution” “best total cost” “best solution” focus: customer insights Maastricht, 15-06-2011 Controllers Circle 45Controllers Circle 14
  15. 15. Geert Desmet Maastricht, 15-06-2011 Treacy & Wiersema’s 3 strategies product leadership State-of-the-art nieuw product/dienst * Nieuw type dienstverlening Premium prijs * Snel door de klant te verwerven operational excellence Gestandaardiseerde, modulaire product/dienst * Beperkte, iedereen-is-gelijk dienstverlening Relatief lage prijs * Gemakkelijk door de klant te verwerven customer intimacy Totaaloplossing product/dienst * Op klanten toegesneden dienstverlening Premium prijs * Gegevens beschikbaar stellen aan de leverancier Maastricht, 15-06-2011 Controllers Circle 46 - blanc - Maastricht, 15-06-2011 Controllers Circle 47Controllers Circle 15
  16. 16. Geert Desmet Maastricht, 15-06-2011 value capturing the ‘Value Model’ © Prof. F. Caeldries value creation value value VISION control delivery value architecture Maastricht, 15-06-2011 Controllers Circle 49Controllers Circle 16
  17. 17. Geert Desmet Maastricht, 15-06-2011 who captures value not the firm due to • resource suppliers increasing price of their resources whereby price increase = differential value won from customers – result from comparisons customers make & comparisons resource suppliers make (differences in expectations about the resource’s value) – perceived bargaining relationships – the absence / presence of close substitutes & low / high switching costs • no relation between – the nature of the value supplied by the resource supplier – the role of this value in the production process – the amount of value that the resource supplier captures Maastricht, 15-06-2011 Controllers Circle 50 VC2 framework © Prof. Paul Verdin value creation H legend: nightmare heaven V = value V>C V>C P=C P>C P = price C = cost hell dream V=C V=C P=C P>C L value capturing L H Maastricht, 15-06-2011 Controllers Circle 51Controllers Circle 17
  18. 18. Geert Desmet Maastricht, 15-06-2011 VC2 framework value creation new business model H nightmare heaven V>C V>C law of gravity P=C P>C horizontal game hell dream innovation V=C V=C P=C P>C L value capturing L H Maastricht, 15-06-2011 Controllers Circle 52 never stop asking g.a.desmet@tiasnimbas.eduControllers Circle 18

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