Value Management by Jan ten Bosch


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method to increase your profitability by creating value for your customers

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  • Value Management by Jan ten Bosch

    1. 1. Value management Jan ten Bosch JtB Management 2011
    2. 2. How to get profitable customers? Create value for your customers by solving their problems and in such a perfect why that you make your customer excited
    3. 3. An excited customer <ul><li>Pays a premium </li></ul><ul><li>Recommend you to others </li></ul><ul><li>Gives repeat orders </li></ul><ul><li>Drops his present supplier </li></ul><ul><li>Goes up to 100% share of volume </li></ul>
    4. 4. But our objective is… <ul><li>more sales at existing customers </li></ul><ul><li>new customers </li></ul><ul><li>better prices </li></ul>
    5. 5. Analysis <ul><li>External analysis </li></ul><ul><ul><li>Key Success Factors </li></ul></ul><ul><ul><li>Sustainable Competitive Advantages </li></ul></ul><ul><li>Internal analyse </li></ul><ul><ul><li>Capability to compete </li></ul></ul><ul><ul><li>Competence, skills </li></ul></ul>
    6. 6. From customer to capabilities his customer Our customer supplier What makes customers excited <ul><li>segments </li></ul><ul><li>which PMC </li></ul><ul><li>choose </li></ul>analysis Do better than competitors our personal skills Summarised in Key Success factors KSF Summarised in Sustainable Competitive advantage: SCA Capabilities the company
    7. 7. How <ul><li>First: I must know my customer </li></ul><ul><ul><li>how is he making money </li></ul></ul><ul><ul><li>how is his production process </li></ul></ul><ul><ul><li>how is his organisation </li></ul></ul><ul><li>and I must know better than my customer and </li></ul><ul><li>more exhaustively than my competitor </li></ul>
    8. 8. So what do I need to know? What are the cost and profit drivers for my customers and prospects or what is his business model ?
    9. 9. The value creation process of my customer porter General management Human Capital & Management Technology & Development Procurement Inbound logistics Operations outbound logistics marketing Sales Total margin Total Margin
    10. 10. The drivers of the value system trading SAP systems edi e-commerce lean mean production jobbers scale advantages low cost labour just in time warehouse transportation branding PMC selection communication customer selection negotiations right contacts cost and profit drivers General management Human Capital & Management Technology & Development Procurement Inbound logistics Operations outbound logistics marketing Sales Total margin Total Margin
    11. 11. How is the value chain ore de business drivers concessions location, efficiency, application know how innovation, creative branding, design availability, stock, maintenance safety, status steel mill automobile producer Importer/ dealer consumer system integrator
    12. 12. The oil value system Automobile drivers Oil distribution petrol distribution Catalyst supplier for oil refineries Variation in feedstock efficiency consumer behaviour environmental chances Oil exploitation
    13. 13. What kind of value Product Innovator Early supplier involvement cooperative development Strategic partner Intensive learning Jobber Process automation and value engineering Weak supplier review your position price fighting High Low Supply a competitive advantage to your customer High Low Make your customer an efficient producer
    14. 14. Total Cost of Ownership <ul><li>Pre-transaction costs </li></ul><ul><ul><li>identification of problem, new application </li></ul></ul><ul><ul><li>short list </li></ul></ul><ul><ul><li>qualification of suppliers </li></ul></ul><ul><li>Transaction costs </li></ul><ul><ul><li>preparation of orders and ordering </li></ul></ul><ul><ul><li>inspection and delivery </li></ul></ul><ul><ul><li>invoice control and payment </li></ul></ul><ul><li>Post transaction costs </li></ul><ul><ul><li>training </li></ul></ul><ul><ul><li>production waste </li></ul></ul><ul><ul><li>maintenance, repair and replacement </li></ul></ul>price
    15. 15. Value drivers <ul><li>Personal interaction </li></ul><ul><li>Supplier Know How </li></ul><ul><li>Time to market </li></ul><ul><li>Delivery </li></ul><ul><li>Service support </li></ul><ul><li>Product quality </li></ul><ul><li>Process costs </li></ul><ul><li>Price </li></ul>Capturing Value Creation in Business Relationships Wolfgang Ulaga; 2003
    16. 16. Value chain <ul><li>business value </li></ul><ul><li> drivers propositions </li></ul>Makes your customer successful Your contribution to make your customer successful
    17. 17. Work out value models per micro segment <ul><li>Take a segment and choose a typical customer: </li></ul><ul><li>1. Draw up the value chain with the business drivers </li></ul><ul><li>What are the value propositions </li></ul><ul><li>3. What role should you play </li></ul>
    18. 18. Key success factors Factors effect the value for the customer and in such way that these factors do change the behaviour of the customer
    19. 19. Key success factors There are factors , the customer expects Some of them are important the success factors A part of those factors are really important: the key success factors
    20. 20. External analyses Customers Competition Environment Opportunities and Threats Weakness and Strengths Key Success Factors
    21. 21. Level of competition <ul><li>Generic competition </li></ul><ul><li>Product competition </li></ul><ul><li>Supplier competition </li></ul>
    22. 22. Competition benchmark delivery solving cost/ product time problems price portfolio competitors (group) I -3 3 -2 -1 competitor (group) II 2 2 0 -1 competitor (group) III -1 -2 3 -2 ourselves 0 0 0 0 Key Success Factors
    23. 23. Value for who or what 1. The customer as a business where is he making profit, where are his costs 2. The customer as organisation what are the objectives of the employees?
    24. 24. …and their values Consumers users are also buyers emotional decision impulse decisions lack market knowledge B-to-B The company The employees economic value status risk rewards career
    25. 25. Define S and W <ul><li>Define KSF’s </li></ul><ul><li>Make competition benchmark </li></ul><ul><li>Define strength and weakness </li></ul>
    26. 26. Remember <ul><li>more sales at existing customers </li></ul><ul><li>new customers </li></ul><ul><li>better prices </li></ul>