BUILDING AND SUSTAINING INNOVATIVE

ORGANIZATIONS
RAJ ECHAMBADI

Crafting a Great Value

Proposition
A Concise Framework to Analyze
Innovation Problems
IMPLICATIONS FOR STRATEGIC INNOVATION

Company 9X Effect Customer

Developer’s curse

Source: Gourville, John, Eager Sellers and Stony Buyers, Harvard Business Review, June 2006
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BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI

Crafting a Great Value

Proposition
Prospect Theory: Minimizing Losses
and Maximizing Gains
BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI

Crafting a Great Value

Proposition
Marketing Myopia: Focus on
“Needs” for Long-Term Advantage
RAILROADS IN THE 1950’s
“The railroads are in trouble today, not because its need was filled by others
(cars, trucks, airplanes, and even telephones) but because it was not filled by the
railroads themselves. They let others take customers away from them because
they assumed themselves to be in the railroad business rather than in the
transportation business. They were product-oriented instead of customer-
oriented.” – Levitt, 1960

Remember markets evolve, consumers change. Define your business with an

eye towards the future.

Source: Levitt, Theodore, 1960, “Marketing Myopia,” July – August 1960.

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 Always define the business in terms of needs of the
consumers and not wants.

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NEEDS ARE COMPLEX
Self-
actualization

Esteem

Social

Safety

Physiological
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 Building capabilities within the company and
resource allocations follow the business definition.

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BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI

Crafting a Great Value

Proposition
Developing a Value Proposition
THE BASIC BUILDING BLOCK OF
STRATEGIC INNOVATION IS VALUE

How do How do
companies companies
create value capture value
for back from
customers? customers?

Value = Quality obtained / Price paid

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A COMPANY ENDURES IN THE LONG-TERM
When a company endures in the long-term, it does both the value creation and
value capture as well.

How do
companiesHow do we
How do we execute the
capture value
create value for“creation and
back from
customers? capture” of
customers?
value over
time?

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

CVP

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

What value does the

offering deliver?

CVP

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

What value does the

Bundle of benefits
offering deliver? What are the pain points?
What are the points of
difference?

CVP

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

What value does the

Bundle of benefits
offering deliver? What are the pain points?
What are the points of
difference?

CVP

Who is the target segment?

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

What value does the

Bundle of benefits
offering deliver? What are the pain points?
What are the points of
difference?

CVP

How are we reaching the

Who is the target segment? segment(s)?

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CRAFTING A CUSTOMER VALUE
PROPOSITION (CVP)

What value does the

Bundle of benefits
offering deliver? What are the pain points?
What are the points of
difference?

CVP
What are the channels?

How are we reaching the

Who is the target segment? segment(s)?

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REGULAR TAXI

Wait for
Call Pay
the Taxi

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 This is the part of the framework that gest expanded.

Refer to ANIMATION

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 Refer to ANIMATION

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This is the part of the framework that gest expanded.
GENERIC COMPETITIVE STRATEGIES

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Treacy & Wiersema (1995)
MAPPING COMPANY CAPABILITIES
AND CUSTOMER NEEDS
Balance what the customer wants and what the company can really produce

Relevance to Relative Capability of Company

Segment Low High

Low Irrelevant. Do not Resource Drain. Stay

spend resources. away from the
developer’s curse.

High Table Stakes. Build Differentiator.

these features. Emphasize these
points of difference.
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 Refer to ANIMATION

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WHAT SHOULD COMPANIES ASPIRE FOR
WHEN IT COMES TO CREATION OF VALUE?
Ensure alignment with collaborators and

environmental contexts for market success.

VHS versus Betamax

HD-DVD versus Blu-ray

Josch13 |Pixabay (2014)

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CVP IS A BUNDLED PROPOSITION

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REFERENCES
Andrys | Pixabay (2014). Newspapers [Online Image]. Retrieved from
https://pixabay.com/static/uploads/photo/2014/09/13/21/40/newspapers-444447_960_720.jpg

Dollar Shave Club. (2016). Untitled [Online Image]. Retrieved from https://www.dollarshaveclub.com/how-it-works

FirmBee| Pixabay. (2014). Untitled [Online Image]. Retrieved from

https://pixabay.com/static/uploads/photo/2015/02/04/12/38/smartphone-623722_960_720.jpg

Hans | Pixabay. (2014). Sony ilce-7 [Online Image]. Retrieved from

https://pixabay.com/static/uploads/photo/2014/02/22/19/56/display-272270_960_720.jpg

Josch13 | Pixabay. (2014). Untitled [Online Image]. Retrieved from

https://pixabay.com/static/uploads/photo/2014/06/25/06/33/light-bulb-376926_960_720.jpg

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REFERENCES
Narayan, P. Yugesh. (2007). Govindappa_Venkataswamy [Online Image]. Retrieved from
https://upload.wikimedia.org/wikipedia/commons/7/70/Govindappa_Venkataswamy.jpg

National Geographic Magazine (1913). Advertisement for the 1911 Encyclopaedia Britannica [Online Image].
Retrieved from https://upload.wikimedia.org/wikipedia/commons/7/7d/EncycBrit1913.jpg

NIST. (2012). Normal Distribution NIST [Online Image]. Retrieved from

https://upload.wikimedia.org/wikipedia/commons/9/9e/Normal_Distribution_NIST.gif

Nuttall, John. (2012). Eljy Lumiere [Online Image]. Retrieved from

https://www.flickr.com/photos/16822508@N05/6972495879/in/photostream/

PeteLinforth | Pixabay. (2015). Untitled [Online Image]. Retrieved from https://pixabay.com/p-685015/?no_redirect

Treacy, M., & Wiersema, F. (1995). The Discipline of Market Leaders [Image]. New York, NY: Perseus Books.

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