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Daniel Pandza, M.A. Centro de  Innovación CERTIFICADO EN INNOVACIÓN G2 - ENERO-MAYO 2009 INNOVACIÓN DE MODELOS DE NEGOCIOS SESSION 03  VALUE DISCIPLINES FOR COMPETITIVE ADVANTAGE FACULTY TEAM Ing. Jorge Valdes Simancas  Ing. Angel Tonatiuh Flores [ atflores@itesm.mx ]  [email_address] Tel 01-(33) 3669 3000 ext. 2266 www.gda.itesm.mx/innovar  GAP CAP
Competitive Advantage over Time ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Moore (2002) Living on the Fault Line. Harper Business Press GAP Time Returns CAP
GAP/CAP Check: Where are Your Offers on this Grid? Toyota Corolla PT  Cruiser Porsche Carrera Sustainability Ford Explorer Atos Sedan Differentiation Moore (2002) Living on the Fault Line. Harper Business Press CAP high low GAP low high Chrysler Minivan Audi TT Ford Mustang VW Bug
GAP/CAP matrix Where are Your Offers on this Grid? Sustainability Differentiation 2002) Living on the Fault Line. Harper Business PressMoore ( CAP high low GAP low high
In a Downturn ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Moore (2002) Living on the Fault Line. Harper Business Press
Value definition
Effective strategy answer three key questions How will we Deliver value? How will we capture value? How will we create value? Developing and Managing a Successful Technology & Product Strategy;  Rebeca Henderson
Effective strategy answer three key questions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Developing and Managing a Successful Technology & Product Strategy;  Rebeca Henderson
Maximizing shareholder value gives you a “workable” target ,[object Object],Price Easy, but wrong target! Correct, but difficult target! Shareholder value! Customer satisfaction ☺
Added Value Appropiated Value Imitation Slack Substitution Holdup The four threats to sustainability Threats to the appropiability of added value; Cinthia Montgomery
Scarcity Value creation zone The dynamic interplay of three fundamental market forces Threats to the appropiability of added value; Cinthia Montgomery What makes a resources valuable? Appropiability Demand
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Hold up Slack Appropriability of added value   Manufacturer Distributor Suppliers Value captured Total value created WTP
Managing Inertia The Core/Context Analysis Framework Mission Critical Process shortfall creates serious and immediate risk Non-Mission-Critical All other processes Supports change Retards change Risk Reward Disengages from a process but still have active control over its outcomes (2003) Living on the Fault Line. Harper Business PressMoore  Core Targeted Innovation Vector(s) Context All other  Activities Differentiation Risk
Core & Context Context Core (2003) Living on the Fault Line. Harper Business PressMoore
The elements of the Business Model Value Proposition Partner Network Core Capacities Value Configuration Customer Relationship Distribution Channel Customer  Segment Cost Structure Revenue Streams Success / Failure
Differentiation Markets Value Chains Technologies Industry advantage Competitive Advantage Drivers Competitive Advantage Effects Types of competitive advantage Each lower layer provides a stronger basis for power in the marketplace (2003) Living on the Fault Line. Harper Business PressMoore  Offer advantage Category advantage Customer advantage I n c r e a s i n g I m p a c t GAP CAP Competitive Advantage Hierarchy
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Offer power
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Differentiated offerings
 
Market segments ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Value Chain competition ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Competitive advantage hierarchy Should be read from the bottom up.  ,[object Object],[object Object],[object Object],[object Object],[object Object]
 
 
The  Product Complex configurations Hardware  Software Peripherals Connectivity Installation Presales services Postsales service & support Based on understanding customer’s problem and its solution What other competitors in category have in common with you What you can show based on commitment to solve problem through a preengineered solution Complementary Products Complementary Services Whole Product Analysis
 
 
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Why Morphing Between Groups is Hard Complex Systems Volume Operations
Value disciplines ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Customer  Intimacy Value  Network Architect Best  Product Process Orientation Degree of Differentiation Through Processes
Product leadership ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Product leadership ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Product leadership ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Best product
Consumer Value Perception Enabling Technology Aggressive High Competitive Strength but High Risk Vulnerable Easily imitated product or service Reactive  Low Risk but Low Competitive Strength Reckless High Risk Low Business Gains Radical Next Generation Incremental Base New Core Product Product New Benefit Product Improvement Product Variant No Change Developing and Managing a Successful Technology & Product Strategy;  Rebeca Henderson Unilever’s Managing  Risk in Innovation
Operational excellence ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Operational excellence ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Operational excellence ,[object Object],[object Object],[object Object]
Value network arquitects/ Operational efficiency
Customer Intimacy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customer Intimacy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customer Intimacy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customer Intimacy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customer Intimacy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customer intimacy
Core Commodities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The progression of economic value from  core commodities to optimum experiences  (adapted from The Experience Economy by Pine and Gilmore). High Relevance CUSTOMER NEEDS Low Relevance Low Differentiation POSITIONED COMPETITIVELY High Differentiation Cost Driven Premium PRICING STRATEGY
Strategy Space business model framework Product  Innovator “ Dominate the Eco-System” “ Creative Destruction” “ Work Backwards from the Customer” Process Orientation Many worlds Relationship Owner Value  Network Architect Degree of Differentiation Through Processes
Associated core value drivers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Relationship Owner Value  Network Architect Product  Innovator Process Orientation Degree of Differentiation Through Processes Many worlds
Example business model paths over time Relationship Owner Value  Network Architect Product  Innovator Many worlds 2000 2000 or here . . . 2000 1985 and sometimes  move here . . . businesses  start here . . . 1990  1962 1990 1996
Example competitive migration paths Amazon vs Wal mart Degree of  differentiation through process Process Orientation Relationship Owner Value  Network Architect Product  Innovator Many worlds ,[object Object],[object Object],[object Object],[object Object],Stalemate! ,[object Object],[object Object],[object Object],[object Object]
Innovation Economy Business Model Options The Economics of the Three Basic Positions Product Innovation Customer  Solutions Infrastructure Economies Of  Scope Economies Of  Scale Dis economies Of Scale Winner-take-all Positions Many worlds
Competitive Advantage Grid Sorcerers eBay, Yahoo, Nintendo, Polaroid. Disrupters Amazon, AOL, Time Warner, Qualcomm, Enron. Enchanters   Home, Shopping, Tivo, Intuit, Pleasant Company Flashers Priceline, eTrade, Netscape, Napster. Disruptive Innovation Innovators Ipod, Iphone, Sharper Image. Excluders   Cisco, Microsoft, Mercedes, Nokia, Toyota Excellers REI, Adobe, Ferrari, Lawson, Reiek Reassures Duracell, Sony, Tumi, Dyson. Product Leadership Niche-carvers   Silicon Vailey Bank. Pleasant Company. Market- Makers Merril Lynch, N.Y. Yankees, Disney, IBM. Includers McKinsey, Martha Stewart, Saturn, Starbucks. Delighters Nordstrom’s, Nike, Crystal Geyser, Hold Everything. Customer Intimacy Reinventors McDonalds, Fed Ex, Jiffy-Lube, Charles Schwab, Colora Genomics. Dominators Walmart, Dell, Visa, Exxon. Satisfiers Kinko’s, IKEA Southwest Airlines Economizers   BIC, Motel 6, Costco Operational Excellence Category Advantage Industry Advantage Customer Advantage Offer Advantage (2003) Living on the Fault Line. Harper Business PressMoore
CONTACT: Daniel Pandza | Innovation Center Tecnológico de Monterrey | Campus Guadalajara Tel: 0052 (33) 3669 3000 ext. 2266 E-Mail:  [email_address]   URL:  http://www.gda.itesm.mx/innovar Center Blog:  http://paradygnamics.wordpress.com  CENTRO DE INNOVACIÓN TECNOLÓGICO DE MONTERREY SERVICES Innovation Certificate for Undergraduate Students Innovation Consulting for the Business Community International Seminars and Executive Training NUEVAS PERSPECTIVAS  PARA EL ÉXITO  EMPRESARIAL http://paradygnamics.wordpress.com

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Session 03 - Value Disciplines (Compacto)

  • 1. Daniel Pandza, M.A. Centro de Innovación CERTIFICADO EN INNOVACIÓN G2 - ENERO-MAYO 2009 INNOVACIÓN DE MODELOS DE NEGOCIOS SESSION 03 VALUE DISCIPLINES FOR COMPETITIVE ADVANTAGE FACULTY TEAM Ing. Jorge Valdes Simancas Ing. Angel Tonatiuh Flores [ atflores@itesm.mx ] [email_address] Tel 01-(33) 3669 3000 ext. 2266 www.gda.itesm.mx/innovar GAP CAP
  • 2.
  • 3. GAP/CAP Check: Where are Your Offers on this Grid? Toyota Corolla PT Cruiser Porsche Carrera Sustainability Ford Explorer Atos Sedan Differentiation Moore (2002) Living on the Fault Line. Harper Business Press CAP high low GAP low high Chrysler Minivan Audi TT Ford Mustang VW Bug
  • 4. GAP/CAP matrix Where are Your Offers on this Grid? Sustainability Differentiation 2002) Living on the Fault Line. Harper Business PressMoore ( CAP high low GAP low high
  • 5.
  • 7. Effective strategy answer three key questions How will we Deliver value? How will we capture value? How will we create value? Developing and Managing a Successful Technology & Product Strategy; Rebeca Henderson
  • 8.
  • 9.
  • 10. Added Value Appropiated Value Imitation Slack Substitution Holdup The four threats to sustainability Threats to the appropiability of added value; Cinthia Montgomery
  • 11. Scarcity Value creation zone The dynamic interplay of three fundamental market forces Threats to the appropiability of added value; Cinthia Montgomery What makes a resources valuable? Appropiability Demand
  • 12.
  • 13. Managing Inertia The Core/Context Analysis Framework Mission Critical Process shortfall creates serious and immediate risk Non-Mission-Critical All other processes Supports change Retards change Risk Reward Disengages from a process but still have active control over its outcomes (2003) Living on the Fault Line. Harper Business PressMoore Core Targeted Innovation Vector(s) Context All other Activities Differentiation Risk
  • 14. Core & Context Context Core (2003) Living on the Fault Line. Harper Business PressMoore
  • 15. The elements of the Business Model Value Proposition Partner Network Core Capacities Value Configuration Customer Relationship Distribution Channel Customer Segment Cost Structure Revenue Streams Success / Failure
  • 16. Differentiation Markets Value Chains Technologies Industry advantage Competitive Advantage Drivers Competitive Advantage Effects Types of competitive advantage Each lower layer provides a stronger basis for power in the marketplace (2003) Living on the Fault Line. Harper Business PressMoore Offer advantage Category advantage Customer advantage I n c r e a s i n g I m p a c t GAP CAP Competitive Advantage Hierarchy
  • 17.
  • 18.
  • 19.  
  • 20.
  • 21.  
  • 22.
  • 23.  
  • 24.
  • 25.  
  • 26.  
  • 27. The Product Complex configurations Hardware Software Peripherals Connectivity Installation Presales services Postsales service & support Based on understanding customer’s problem and its solution What other competitors in category have in common with you What you can show based on commitment to solve problem through a preengineered solution Complementary Products Complementary Services Whole Product Analysis
  • 28.  
  • 29.  
  • 30.
  • 31.
  • 32.
  • 33.
  • 34.
  • 36. Consumer Value Perception Enabling Technology Aggressive High Competitive Strength but High Risk Vulnerable Easily imitated product or service Reactive Low Risk but Low Competitive Strength Reckless High Risk Low Business Gains Radical Next Generation Incremental Base New Core Product Product New Benefit Product Improvement Product Variant No Change Developing and Managing a Successful Technology & Product Strategy; Rebeca Henderson Unilever’s Managing Risk in Innovation
  • 37.
  • 38.
  • 39.
  • 40. Value network arquitects/ Operational efficiency
  • 41.
  • 42.
  • 43.
  • 44.
  • 45.
  • 47.
  • 48. Strategy Space business model framework Product Innovator “ Dominate the Eco-System” “ Creative Destruction” “ Work Backwards from the Customer” Process Orientation Many worlds Relationship Owner Value Network Architect Degree of Differentiation Through Processes
  • 49.
  • 50. Example business model paths over time Relationship Owner Value Network Architect Product Innovator Many worlds 2000 2000 or here . . . 2000 1985 and sometimes move here . . . businesses start here . . . 1990 1962 1990 1996
  • 51.
  • 52. Innovation Economy Business Model Options The Economics of the Three Basic Positions Product Innovation Customer Solutions Infrastructure Economies Of Scope Economies Of Scale Dis economies Of Scale Winner-take-all Positions Many worlds
  • 53. Competitive Advantage Grid Sorcerers eBay, Yahoo, Nintendo, Polaroid. Disrupters Amazon, AOL, Time Warner, Qualcomm, Enron. Enchanters Home, Shopping, Tivo, Intuit, Pleasant Company Flashers Priceline, eTrade, Netscape, Napster. Disruptive Innovation Innovators Ipod, Iphone, Sharper Image. Excluders Cisco, Microsoft, Mercedes, Nokia, Toyota Excellers REI, Adobe, Ferrari, Lawson, Reiek Reassures Duracell, Sony, Tumi, Dyson. Product Leadership Niche-carvers Silicon Vailey Bank. Pleasant Company. Market- Makers Merril Lynch, N.Y. Yankees, Disney, IBM. Includers McKinsey, Martha Stewart, Saturn, Starbucks. Delighters Nordstrom’s, Nike, Crystal Geyser, Hold Everything. Customer Intimacy Reinventors McDonalds, Fed Ex, Jiffy-Lube, Charles Schwab, Colora Genomics. Dominators Walmart, Dell, Visa, Exxon. Satisfiers Kinko’s, IKEA Southwest Airlines Economizers BIC, Motel 6, Costco Operational Excellence Category Advantage Industry Advantage Customer Advantage Offer Advantage (2003) Living on the Fault Line. Harper Business PressMoore
  • 54. CONTACT: Daniel Pandza | Innovation Center Tecnológico de Monterrey | Campus Guadalajara Tel: 0052 (33) 3669 3000 ext. 2266 E-Mail: [email_address] URL: http://www.gda.itesm.mx/innovar Center Blog: http://paradygnamics.wordpress.com CENTRO DE INNOVACIÓN TECNOLÓGICO DE MONTERREY SERVICES Innovation Certificate for Undergraduate Students Innovation Consulting for the Business Community International Seminars and Executive Training NUEVAS PERSPECTIVAS PARA EL ÉXITO EMPRESARIAL http://paradygnamics.wordpress.com