The document discusses different types of value propositions for businesses, including providing the highest quality products, the best value for price, products that are essential "must-haves", and lifestyle brands that promote aspirational experiences of luxury. While luxury brands may see downturns during difficult economic times, the document notes that luxury consumers often have discretionary income and return to these brands when the economy rebounds. It also advocates that companies should aim to set new standards with their products or services rather than remain positioned in the middle of the market.

1. Luxury and Aspiration
Alongside bang-for-buck players are luxury
Wisdom Manifesto Principle 2: providers that dangle the experience of a gilded
lifestyle to aspirational consumers. Ralph Lauren,
Be the Best at Something
Rolex, BMW, and Hermès are among the most
masterful purveyors of lifestyle luxury brands.
The best way to align employees and management is to understand the
While the luxury segment can take a hit during
benefit that the business is trying to deliver to its customers. Only four
difficult times, consumers make their way back
types of consumer benefits matter, and by extension, only four categories
as the economy rebounds. Not to mention that
of value propositions work.
many luxury goods consumers have ample discretionary spending, even
during tough times.
Best Quality
Richard Branson once commented that being Must-Have
the best at something is a pretty good business T! W!
model. We couldn’t agree more. Consider brands BES One of the most attractive value proposi- NE
that set a standard, such as Louisville Slugger tions we have seen and studied consists of
baseball bats or Stradivarius violins. You don’t the must-haves. These include basic goods,
have to be a sports nut or a classical music aficio- up to and including certain foodstuffs. At
nado to be familiar with these brand benchmarks. Thomson, we often talked about must-
Brands that set unmatched standards are often luxury brands; but even a have content, without which business
less luxurious brand like Benjamin Moore can create a long-lasting value professionals simply could not do their jobs. One example? The critical
proposition by establishing a best-in-class quality reputation. legal information and tools Westlaw provides lawyers. As long as there is a
case to be filed, lawyers need legal information, and Westlaw is the leading
Best Bang for the Buck source for that information.2 There will always be competition between
the must-haves, but must-have market leaders ultimately win a great
Some consumers will always buy on price; still, prize: mega value generation.
best-in-class value doesn’t always mean the lowest
at
price, but rather the best quality-to-price ratio. Gre
eal!! Reach a New Level!
One good example is JetBlue, a company that d
may not offer the cheapest or best in comfort Does your company’s value proposi-
travel, but that does a superior job of communi- tion fit in one or more of the categories
cating its superior value relative to its price point. above? If not, it’s time to adjust. Quit
Chipotle, Ikea, and Toyota are other illustrations being stuck in the middle. Consider
of best-in-class value, and through the years, repositioning your offering, and aiming
they’ve sustained their value propositions. to set a wholly new standard.

2. Start Small!
Wisdom Manifesto Principle 3:
Think Big, Start Small, then Scale Fast
In execution, it’s almost impossible to think big and start big. That’s why Bake Sale:
we always recommend thinking big, starting small, then scaling (or failing)
fast. As Professor Bill Sahlman of Harvard Business School has said, “Busi-
Anna’s Chocolate
nesses should begin as a series of sensible experiments.”3 Cookies - $5
There’s nothing wrong with having a formidable idea, then proceeding
to launch miniature versions of it that allow you to continually tweak your
concept. Take Chipotle, the Mexican food chain, whose motto and purpose
statement are “Food with integrity . . . the very best ingredients raised with
respect for the animals, the environment, and the farmers.” Steve Ells had Scale Fast!
a very big idea about food, but rather than executing 100 percent of his vi-
sion overnight, he gradually made his way there to really proving concept
before sealing it.
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