Showing papers on "Value proposition published in 1999"

Strategy and the new economics of information

Abstract: We are in the midst of a fundamental shift in the economics of information--a shift that will precipitate changes in the structure of entire industries and in the ways companies compete. This shift is made possible by the widespread adoption of Internet technologies, but it is less about technology than about the fact that a new behavior is reaching critical mass. Millions of people are communicating at home and at work in an explosion of connectivity that threatens to undermine the established value chains for businesses in many sectors of the economy. What will happen, for instance, to dominant retailers such as Toys "R" Us and Home Depot when a search through the Internet gives consumers more choice than any store? What will be the point of cultivating a long-standing supplier relationship with General Electric when it posts its purchasing requirements on an Internet bulletin board and entertains bids from anybody inclined to respond? The authors present a conceptual framework for approaching such questions--for understanding the relationship of information to the physical components of the value chain and how the Internet's ability to separate the two will lead to the reconfiguration of the value proposition in many industries. In any business where the physical value chain has been compromised for the sake of delivering information, there will be an opportunity to create a separate information business and a need to streamline the physical one. Executives must mentally deconstruct their businesses to see the real value of what they have. If they don't, the authors warn, someone else will.

Managing Customer Value

Abstract: This paper builds the framework for linking the established work of competitive advantage with the emerging discipline of value marketing. The outcome of this linkage is the concept of strategic value management. Strategic value management focuses on the right combinations of product quality, customer service and fair prices as the key to selling to today’s value conscious consumers. The core of the strategy stresses the firm’s ability to combine and manage these dimensions of value in a way that a strategic value advantage is created and maintained. This advantage provides long‐term profitability for the firm and satisfaction for the customer segment. Three companies that excel at strategic value management, Southwest Airlines, Hewlett‐Packard, and Nordstrom, illustrate how this advantage provides long‐term profitability for their firm and satisfaction for their customer segment. Value oriented actions have been developed to support a strategic value approach.

Creating New Market Space

Abstract: Most companies focus on matching and beating their rivals. As a result, their strategies tend to take on similar dimensions. What ensues is head-to-head competition based largely on incremental improvements in cost, quality, or both. The authors have studied how innovative companies break free from the competitive pack by staking out fundamentally new market space--that is, by creating products or services for which there are no direct competitors. This path to value innovation requires a different competitive mind-set and a systematic way of looking for opportunities. Instead of looking within the conventional boundaries that define how an industry competes, managers can look methodically across them. By so doing, they can find unoccupied territory that represents real value innovation. Rather than looking at competitors within their own industry, for example, managers can ask why customers make the trade-off between substitute products or services. Home Depot, for example, looked across the substitutes serving home improvement needs. Intuit looked across the substitutes available to individuals managing their personal finances. In both cases, powerful insights were derived from looking at familiar data from a new perspective. Similar insights can be gleaned by looking across strategic groups within an industry; across buyer groups; across complementary product and service offerings; across the functional-emotional orientation of an industry; and even across time. To help readers explore new market space systematically, the authors developed a tool, the value curve, that can be used to represent visually a range of value propositions.

Knowledge transfer: Discover your value proposition

Abstract: Does managing and transferring knowledge really work? Absolutely. Dramatic results for a growing number of companies—large and small, private and public—have encouraged other organizations to follow suit.

A Review of the ‘Value’ Literature and Implications for Relationship Marketing

Abstract: The creation and delivery of value to customers is of increasing interest to researchers and practitioners. This paper identifies and reviews nine core streams of literature that have been influent...

Value Transformation in Relationship Marketing

Abstract: Based on the principle that customer value is a key concept in the marketing discipline, this paper presents a review and critique of current knowledge in this field. Customer value is a dynamic an...

Rosenbluth international: strategic transformation of a successful enterprise

Abstract: Successful companies find it exceedingly difficult to change their business strategy radically in response to impending changes in their competitive environment. Here, we analyze how Rosenbluth International, one of the largest travel agencies, was able to accomplish that. Threatened with disintemediation during the period of drastic restructuring of travel brokerage, the company strategically revised its value proposition. It has divested itself of its leisure travel segment and offered a range of its services on a fee basis to its customers, rather than rely on commissions by the suppliers of travel services, as it had done previously. This strategic change was enabled by information systems, several of them highly innovative, which Rosenbluth had used strategically in its prior business initiatives. The paper analyzes the management of strategic transition at Rosenbluth International in the light of general theory of organizational resistance to change.

Mastering the Digital Marketplace: Practical Strategies for Competitiveness in the New Economy

Abstract: From the Publisher: The last word on the digital economy. Based on research developed within A. T. Kearney's industry-leading Strategic Information Technology Practice, this accessible book describes the new business strategies created by electronic business and the emerging digital economy. Aldrich identifies three key strategic considerations: the development of a powerful new consumer value proposition, time value and its impact on products and services; the growth of new electronic networked business models; and the evolution of a value-based organizational model tuned for success in this new business environment. The book provides practical ways to develop business strategies around these concepts and organize for their implementation, using case studies of both successes and failures and diagnostic tools. The book presents three specific strategies to master the digital marketplace: intelligent products, intelligent markets, and intelligent organizations.|

Quest for value mix

Abstract: This paper reexamines the traditional approaches to study value and quality, and suggests the need of linking these isolated approaches. A new concept called value mix which focuses on the customers’ perception of the value of a product or service in terms of function, quality and price is developed to provide a vehicle for an amalgamation of varied management thinking. Value is suggested to form the core of organisations’ strategic process of pursuing customer satisfaction. Leading edge can be forged by formulating and applying an appropriate value mix. Given that quality is the focus of total quality management (TQM) while value is that of value analysis/value engineering (VA/VE), researchers should explore the opportunity of integrating TQM and VA/VE tools and techniques to enhance product or service value.

Marketing in 3-D

Abstract: Functional, process, and relationship benefits are the hat trick of contemporary marketing. To score, follow three rules. Marketers used to succeed by providing superior products and other distinctive functional benefits. Today this is no longer enough, for such benefits can readily be imitated; in the automobile industry, for instance, quality and performance increasingly meet--and are perceived by consumers to meet--uniformly high standards (Exhibit 1, on the next spread). Today's marketers must therefore find new ways of differentiating their products and services. The solution is to emphasize process benefits (which make transactions between buyers and sellers easier, quicker, cheaper, and more pleasant) and relationship benefits (which reward the willingness of consumers to identify themselves and to reveal their purchasing behavior). In other words, the basis for creating successful marketing strategies has expanded to three dimensions, from one. McKinsey research on marketing in four industries--automobiles, cosmetics, credit cards, and long-distance telephone services--shows that many people have come to value these new types of benefit as highly as their functional predecessors, if not more highly (Exhibit 2, on the next page). The implication: if your company doesn't satisfy the demand for all three kinds of benefit in its value propositions, it will be vulnerable to competitors that do. Our research also shows that consumers can be segmented by all three dimensions of benefit to create more complex and powerful maps of preferences. The size and nature of the important clusters vary substantially in the four categories we studied (Exhibit 3). Only in automobiles did we find a true "want-it-all" cluster, and this may reflect the fact that autos are a high-ticket purchase. Otherwise, different people seem to want different combinations of the three kinds of benefit--a pattern we think characterizes many industries. The ability of process and relationship benefits to transform the customer's shopping experience is becoming more and more apparent. On the process side, look at Streamline, a grocery home-delivery service expanding into Washington, DC, from its base in Boston. Representatives of the company visit each client's home to scan the products in the pantry and draw up a customized shopping list, including staples to be replenished automatically every week. Additional items can be ordered by telephone, fax, or the Internet, and they are delivered to a Streamline-supplied refrigerator installed in the customer's garage, so that he or she need not be at home to receive them. Streamline also delivers prepared meals and videos and takes care of dry cleaning and film processing. The Streamline value proposition: "Life just became a whole lot simpler!" People who take advantage of Streamline's service might also avail themselves of the relationship benefits offered by American Express. Under the slogan "Membership has its rewards," it has countered the functional features of products from Visa and other competitors by pioneering benefits such as the instant replacement of lost or stolen cards and the elimination of preset spending limits. When the competitors imitated those benefits, too, American Express introduced its Membership Miles program, rewarding loyal customers with purchase points that can be used on a number of airlines. The program has since been extended to a wider range of relationship benefits, including special services, events, and programs; high-value customers, for example, get preferred seating in special American Express hospitality areas at major golf and tennis tournaments. Saturn, a General Motors (GM) car division, famously offers both process and relationship benefits. It gave consumers greater control over the buying process by reducing showroom pressure and introducing no-haggle pricing. It forged individual relationships by welcoming purchasers into the "Saturn family," whose advantages include membership in owners' groups and access to on-line information. …

The Clickable Corporation: Successful Strategies for Capturing the Internet Advantage

Abstract: From the Publisher: In business, it hasn't always hurt to "wait and see." But the experience of companies engaged in the fast-moving world of Internet commerce strongly suggests that it's vital for businesses to become involved -- now, say Arthur Andersen experts Jonathan Rosenoer, Douglas Armstrong, and J. Russell Gates -- and capture a strong advantage as customers and business partners integrate new Internet technologies into their day-to-day activities. Users are adopting the Internet at a very rapid pace, and the Internet stands today as both the greatest opportunity and the greatest threat to established businesses. It's not enough for a company simply to commission a Web site; the company needs to focus on strengths that it can leverage into an Internet advantage and strive to be consistently more effective, more accessible, and more exciting, than any other site in its category. Eight value propositions Rosenoer, Armstrong, and Gates present case studies of 25 well-known companies engaged in e-commerce, including details on how some initially stumbled and then recovered. These studies reveal how any company can capture meaningful Internet advantage for its stakeholders -- customers, shareholders, or business partners. The authors describe how the achievements of enterprises such as MSN Expedia, Marshall Industries, Federal Express, Dell Computer, Northwest Airlines, 1-800-FLOWERS, GeoCities, Charles Schwab & Company, and Wells Fargo can be successfully put to work for any company. They isolate each of the eight value propositions a company can offer online: information, choice, convenience, customization, savings, community, entertainment, and trust, and illustrate, with multiple case studies for each, how these are achieved. This guided tour to maximizing Internet advantage walks the reader through the steps to crystallizing a company's mission, goals and organization, customer identification and needs assessment, as well as interaction with business partners. The authors focus on keeping ahead of competition through discerning emerging Internet business standards, online positioning, and foreseeing impending competition from new technologies. A final chapter sets forth the skills managers need to capture the Internet advantage for their own companies. About the Authors: Jonathan Rosenoer is Director, Electronic Commerce Readiness, in Arthur Andersen's computer risk management practice. For the past decade, he has developed commercial online systems and concentrated on associated business risk and process issues. He is the author of Cyberlaw: The Law of the Internet. Cyberlaw, which began as a monthly newsletter for computer users in 1990, was rated by MacWorld magazine as one of "18 Great Mac Resources" in 1994. He has also written for Wired magazine and numerous other journals. Douglas E. Armstrong serves as Director of Marketing and Digital Communications for Arthur Andersen's Knowledge Enterprises. He directs the marketing and business development activities for KnowledgeSpace, Arthur Andersen's electronic knowledge services, and the Virtual Learning Network. He also leads the Web design and development of www.knowledgespace.com and www.arthurandersen.com, the Firm's global Internet sites. Doug regularly consults with organizations about how they can achieve their business objectives through Internet technology and interactive media. J. Russell Gates is a partner in the Chicago office of Arthur Andersen LLP and leads the Firm's Computer Risk Management practice in North America. He is also the worldwide head of Arthur Andersen's Electronic Commerce Risk Consulting and Assurance initiatives, developing and coordinating service offerings relating to various aspects of e-commerce. In addition, Russ is the co-author of Arthur Andersen's Information Security Framework, a tool for assisting organizations in implementing information and network security policies, processes, and technologies to meet their specific business needs.

Organising for the interactive marketing of tomorrow

Abstract: The author argues that consumer expectations are being redefined, while technologies are enabling new marketing capabilities which meet and feed these expectations. In particular, consumers want more than functional benefits which seem increasingly undifferentiated. In addition to product quality and value, they are looking for process and relationship benefits which ‘access’ and ‘interfacing’ technologies are increasingly able to provide. Traditional businesses are being attacked by new competitors who use technology to meet consumer expectations with innovative value propositions.