VALUE INNOVATION:

THE STRATEGIC LOG

IC OF HIGH Presented
GROWTH by: Luis Shrestha
Nishant Singh Bam
Ujjwal Shrestha
 WHAT ACTUALLY IS VALUE INNOVATION?
• STRATEGY TO DO THINGS COMPLETELY IN A DIFFERENT WAY I.E. DIFFERENT
COMPETITIVE MINDSET AND SYSTEMATIC WAY OF LOOKING FOR
OPPORTUNITIES.
 ACCORDING TO THE CASE
• FROM 1960S TO 1980S THE MOVIE THEATER IN BELGIUM WAS DECLINING
STEADILY.
• BY THE 1980S MANY CINEMA OPERATORS WERE FORCED TO SHUTDOWN.
• THE COS THAT FOUND THEMSELVES COMPETING HEAD-TO-HEAD IN
SHRINKING MARKET TOOK SIMILAR ACTIONS.
CONVENTIONAL LOGIC VS VALUE INNOVATION

• INDUSTRY ASSUMPTIONS
• STRATEGIC FOCUS
• CUSTOMERS
• ASSETS AND CAPABILITIES
• PRODUCT AND SERVICE OFFERINGS
INDUSTRY ASSUMPTIONS
• COMPANIES THINK THEIR INDUSTRY’S CONDITION ARE GIVEN AND SET
THEIR STRATEGY ACCORDINGLY
• NO MATTER HOW THE REST OF THE INDUSTRY IS FACING, VALUE
INNOVATORS LOOK FOR BLOCK BLUSTER IDEAS AND QUANTUM LEAPS IN
VALUE
 STRATEGIC FOCUS
• COMPARE THEIR COMPANY’S STRENGTH AND WEAKNESS WITH THEIR
COMPETITORS AND FOCUS ON BUILDING ADVANTAGES
• THEY DON’T BUILD UP ADVANTAGES OVER THE COMPETITIONS BUT THEY
END UP ACHIEVING COMPETITIVE ADVANTAGES
•
CUSTOMERS
MANY COMPANY SEEKS GROWTH THROUGH RETAINING THEIR CUSTOMER
BASES OFFERING THEM FINER SEGMENTATION AND MEETING THEIR
SPECIALIZED NEEDS.
• INSTEAD OF FOCUSING ON THE DIFFERENCES AMONG CUSTOMERS, VALUE
INNOVATORS BUILD ON THE POWERFUL COMMONALITIES IN THE FEATURES
THAT CUSTOMER VALUE.
THE THREE PLATFORMS
1. PRODUCT: PHYSICAL PRODUCTS
2. SERVICE : SUPPORT SUCH AS
DELIVERY PRODUCT MAINTENANCES, CUSTOMER
SERVICE, WARRANTIES, AND
TRAINING FOR DISTRIBUTERS AND
RETAILERS
3. DELIVERY: LOGISTICS AND THE
CHANNEL USED TO DELIVER THE
SERVICE
PRODUCT TO CUSTOMERS
PRODUCT SERVICE
HOW HAS COMPAQ STAYED ON TOP OF THE
SERVER INDUSTRY?
• DELIVERY
1) REDUCE THE DELIVERY TIME
2) QUANTUM LEAP IN VALUE FOR CUSTOMERS
3) REDUCE INVENTORY COSTS
4) MINIMIZE THE ACCUMULATION OF OUTDATED
STOCK
CASE OF VIRGIN ATLANTIC
• PRODUCT
1. CUT FIRST CLASS SERVICE
2. LARGE, RECLINING SLEEPER SEATS, RAISING SEATS
IN BUSINESS CLASS
• SERVICE
1. FREE TRANSPORTATION TO-FROM AIRPORT
2. LIMO BIKES TO COUNTER CITY TRAFFIC
3. LOUNGES FOR PASSENGERS BETWEEN FLIGHTS
• RESULT:
1. ATTRACTED LARGE BUSINESS CLASS AND SOME
FULL-ECONOMY AND FIRST CLASS CUSTOMERS.
2. HIGHEST SALES PER EMPLOYEE
3. LOWEST COST PER PASSENGER MILE
CASE OF GOOGLE MOTO
• SERVICE
1. COMPLETE COLOR CUSTOMIZATION

• DELIVERY
1. DELIVERY OF THE CUSTOMIZED PHONE WITHIN
6DAYS OF ORDER

• RESULT:
1. NEW VALUE PROPOSITION
2. AWAY FROM THE TRAP OF COMPETING FOR SPEC,
FEATURE OR PRICE
3. NEW CUSTOMER MARKET
THE PIONEER-MIGRATOR-SETTLER MAP
• HOW TO CONTINUE INVESTING IN EXISTING
REVENUE-GENERATING BUSINESS WHILE AT THE
SAME TIME CREATING AND LAUNCHING BUSINESS
OF TOMORROW?
THE PIONEER-MIGRATOR-SETTLER MAP
1. ALLOWS TO SEE THE
RELATION BETWEEN CURRENT
PORTFOLIO OF BUSINESS AND
FUTURE GROWTH PROSPECT.

2. HOW TO DRIVE YOUR

COMPANY TO LIFT YOUR
PROSPECT OVER TIME.

3. PORTFOLIO OF BUSINESS ARE

SETTLERS, MIGRATORS, AND
PIONEERS.
THE PIONEER-MIGRATOR-SETTLER
MAP

1. SETTLERS : BUSINESS
OFFERING ME-TOO VALUE

2. MIGRATORS: BUSINESS WITH

VALUE IMPROVEMENT OVER
COMPETITORS

3. PIONEERS: BUSINESS THAT

OFFER UNPRECEDENTED VALUE
THE PIONEER-MIGRATOR-
SETTLER MAP(APPLE)

1. IN 2003, APPLE INTRODUCED IPOD AS A

NEW PIONEER.
2. APPLE’S IPOD BEGAN TO BE IMITATED.
3. COUNTERING, APPLE LAUNCHED
VARIOUS PRICE POINT WITH IPOD MINI,
SHUFFLE, NANO, TOUCH, AND SO ON.
4. ALLOWED APPLE TO CAPTURE THE
LION’S SHARE OF THE PROFIT TILL IT
BECAME MIGRATORS IN 2008 AND
APPLE LAUNCHED NEW PIONEER
IPHONE AND OTHER.
5. APPLE HAS MAXIMIZED GROWTH
PROSPECT BY MAINTAINING HEALTHY
BALANCE OF PIONEER-MIGRATOR-
SETTLERS OVER TIME EVEN WITH THE
COMPETITION
THE PIONEER MIGRATOR-SETTLER
MAP

1. IF BOTH TODAY AND TOMORROW

CONSISTS OF MAINLY SETTLERS,
COMPANY HAS LOW GROWTH
TRAJECTORY.

2. NEEDS TO PUSH FOR VALUE

INNOVATION.

3. COMPANY MAY HAVE FALLEN

UNDER THE TRAP OF COMPETING.
THE PIONEER-MIGRATOR-SETTLER
MAP

1. IF BOTH TODAY AND

TOMORROW CONSISTS OF
MANY MIGRATORS,
REASONABLE GROWTH IS
EXPECTED.

2. COMPANY IS NOT FULLY

UTILIZING ITS POTENTIAL FOR
GROWTH.