Value Curves Methodology

Reference Books:
Blue Ocean Strategy – Kim, Mauburgne

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 Elements of Performance

 Elements in aggregate define a

product or a service
 Attributes that different customers
associate different “value” to
 Its measurable
 Its not a feature/benefit

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 Elements of Performance
 Online Pharma
 Availability of drugs
 Price
 Delivery times
 Availability of service
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 Cisco Router
 Configuration
Interface
 Replacement Service
 Power consumption
 Price
 Case study: Samsung

2005: Samsung LCD HDTV launch in US

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 Value Curve:: Samsung
Sony Sharp Samsung
Elements of
High Value Performance
 Price

 Picture Quality

 Emotional Appeal

Low Value  Décor

 Sound Quality

 HDTV

 Functionality

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 Value Differentiation Identification

 Six Question test-

1. What elements can we eliminate or reduce the value
delivered?
2. For what elements should we increase the value
delivered?
3. What new elements could we introduce?
4. Do these changes make for compelling value
proposition to MIC?
5. Is our position unique?
6. Is this position sustainable?

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 Value Curve:: Samsung Revisited
Sony Sharp Samsung
Elements of
High Value Performance
 Price

 Picture Quality

 Emotional Appeal

 Décor
Low Value
 Sound Quality

 HDTV

 Functionality

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 Value Delivered

 Samsung 51/52
(LN52A650) model
introduced in US in
Feb 2006

Company Jan 06 May 06

Samsung 12.1% 26.4%
Sony 24.6%
Sharp 8.4%

TV Market share
Source: BusinessWeek Online June 22, 2006

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 Case Study: OnlinePharma.in

Develop a service where customers can order

their prescription/normal medicines through a
portal and get it delivered.

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 Onlinepharma.in
List elements of performance

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 Elements of Performance

 Drug Catalog – will I get the medicine I want?

 Time to Deliver – how long before I get it in my hands?
 Price – what is going to be my final price?
 Payment – can i pay through my insurance? (cashless,
reduced paperwork)
 Reminders – can I setup a recurring schedule
 Open – can I get a medicine in the middle of the night?
 Support – can I have access to pharmacist if I have
questions on dosage?
 Medical Advice – can I get medical advice for non critical
issues?
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 Elements - Ranked
10 1
9 2
8 3
7
6
5
4
3
2 Madhya Pradesh
1 Kerala
0 Punjab

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 Value Curve – As is
Online pharma
 “Aushadh” chain of All competitors

pharmacies in 6 High Value

metros
 “All competition” –
broadly representing
all others
 Online pharma – our
idea Low Value

Drug Variety Access Price Cashless Time to

Deliver
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 Value Curves – Tier2 cities

Online pharma
All competitors Ranked Value Elements:
General
High Value
Cashless 3%

Home Delivery 17%

Access 25%

Price 20%

Time to Deliver 5%
Low Value
Drug Variety 30%
Drug Access Price Cashless Time to
Availability Deliver
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 Value Curves – Tier1 NonCritical

Online pharma
All competitors Ranked Value Elements:
General
High Value
Cashless 25%

Home Delivery 10%

Access 25%

Price 5%

Time to Deliver 20%

Low Value
Drug Variety 15%
Drug Access Price Cashless Time to
Availability Deliver
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 Which of the two models will you build?

Whichever makes more profit!

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