Coffee, Clowns, Airplanes and Commodity Addiction
In the Translation and localization industry, players tend to focus their attention on benchmarking the competition, implementing technology innovations or simply extending service offerings. The more they benchmark their competition, the more they look like them. When markets are reconstructed and value breakthroughs are created for buyers and the organization, the new demand is unlocked, giving place to value innovation. There is no longer a need for new technologies or pricing strategies. The conventional assumptions about how to compete are simply challenged. By looking at other industries, the presentation showed how Starbucks, Cirque de Soleil and Southwest Airlines came up with a value curve based on differentiation and the right price strategy by implementing the Blue Ocean Strategy. By changing the service offering and finding new customers, it is possible for LSPs to create a new customer value proposition and a new market space. That is called “Value Innovation.” By providing an overview of how these three companies were able to reach uncontested markets, the attendees will walk away with a framework that can be considered for creating a new way of creating value innovation in their service offerings.
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Coffee, Clowns, Airplanes and Commodity Addiction
- 1. Coffee, Clowns, Airplanes and Commodity Addic5on Marcela Jenney-‐Reyes, MBA CBO, La5tudes
- 2. A bit about me • 20+ years industry experience • 10+ years as a ATA cer5fied Eng>SP translator • Cer5fied Localiza5on Project Manager • MBA in Marke5ng • Blue Ocean Strategy Cer5fied Prac55oner • Professional business, marke5ng coach and branding coach • Reach Cer5fied Personal Branding Strategist ‣ Reach Cer5fied Online Iden5ty Strategist ‣ Cer5fied 360Reach™ Brand Assessment Analyst ‣ 2010-‐2012 ATA’s Spanish Language Division Administrator
- 3. Costs Buyer Value The Simultaneous Pursuit of Differentiation and Low Cost Value Innova5on
- 4. 4 Blue Ocean Strategy Value Innovation: The simultaneous pursuit of differentiation and low cost Eliminate Reduce Raise Create Cost Buyer Value
- 7. • Canada based circus entertainment company • Founded by two street performers in 1984 • Circus arts and street theater, featuring original music, special effects and spectacular costumes • No animal acts • 19 shows in over 270 ci5es around the world • Es5mated annual revenue exceeding $810 million • “The New Circus”
- 8. • Circuses focused on benchmarking one another • Demand was decreasing • Rising costs without rising revenues • Many of the elements considered essen5al to the fun and thrill of the circus were unnecessary and in many cases costly
- 9. • Animal acts • Three-‐ring shows • Focused on “non-‐customers”
- 13. By elimina*ng many of the most expensive elements of the circus, it has been able to drama*cally reduce its cost structure, achieving both differen*a*on and low cost.
- 15. • Seable in 1971 • Two local Seable teachers and a writer • Originally called Starbucks Coffee, Tea and Spices. • $10.7 billion in revenue last year • 16,850 shops in 40 countries
- 16. • How would you describe Starbucks in three words? • Coffee, People, Stores • The “Starbucks Experience”
- 18. • Starbucks turned the coffee industry on its head by shiging its focus from commodity coffee sales to the emo5onal atmosphere in which customers enjoy their coffee.
- 20. • Texas-‐based company • Started 1971 • 72 ci5es • 38 consecu5ve years of profitability • The US ' most successful low fare, high-‐ frequency, point-‐to-‐point carrier • More than 3,300 flights a day • The largest U.S. carrier based on domes5c passengers boarded
- 21. • “If you get your passengers to their des5na5ons when they want to get there, on 5me, at the lowest possible fares, and make darn sure they have a good 5me doing it, people will fly your airline”.
- 22. 0 1 2 3 4 5 6 7 8 9 10 Offerings Factors of Competition Strategy Canvas of Short-Haul Airline Industry Southwest Other airlines Car Value Element Price Meals Lounges Seating choice Hub connectivity Friendly service Speed Frequent departures
- 23. • Low price • Friendly service • Speed • Point-to-point routes
- 24. Take-‐aways • De-‐segment the market by focusing on commonali5es between customers and noncustomers • Create new demand and new uncontested market spaces where your compe55on becomes irrelevant • Iden5fy and eliminate barriers to customer delight • Get the eyes out into the field to uncover addi5onal opportuni5es
- 25. Thank You!!!