Redifferentiating Products

1. Redifferentiating Products Recognizing the Potential of an Innovation

2. Why Business Models Matter “During the dot-com boom, ‘Business Model’ was a buzzword routinely invoked to glorify all manner of half-baked plans” -- Michael Lewis

3. Why Business Models Matter • Telling a good story • Part of selling your strategy / investment • Tying Narrative to Numbers • Strategy becomes less philosophy • More performance and outcome • When business models don’t work • It’s because the fail either • The ‘Narrative’ test • Or the ‘Story’ test

4. A business model is not strategy • It doesn’t describe external forces: • Competition • Environment • Scaling • It only depicts the systems that will be put into place to achieve a strategic objective • A good model is not enough • The boxes on the value map need to be understood in depth • In order to develop a good strategy

5. Graphing the Value Map • External competitive environment (supply & demand curves) • Internal strategies, competencies, knowledge, assets ‘owned’ • Value flows between owners and/or the external environment

6. Taxonomy of Network Business Models Mad Catz is an example of A Network Business Models

7. Business ModelsValue Chain IntegratorUses both Electronic and Logistic Networks

8. Business ModelsAggregator (e-Tailor)

9. Prosu mer Prosu mer Prosu mer Prosu mer Value Space Business ModelsDistributive Net, Agora & Alliance

10. Creative Tension • On the one-side are arguments about what the customer wants (demand-side) • On the other-side are arguments about what we can do (supply-side) • Assets and core competences • Which in turn are determined by • Mission and Vision statements, • Business Model and Strategy

11. Why Redifferentiate • The Encore Problem • “Show me a manger who claims he’s in a mature business.. • … and I’ll show you a manger who’s asleep at the wheel” • --Shelly Weinig • Redifferentiating is a skill that can be learned • Quizzing • Consumption Chain Analysis

12. Quizzing • Detailed look at customer usage and decision making regarding your product • Looks for ideas to Change the Customer’s Experience • i.e., to redifferentiate your product • Remember: Experience is dynamic • So are the questions in quizzing

13. How to Quiz Ask Questions Who? • … is with customers while hey use the product • How much influence do they have • If we could arrange it, who would we want the customer to be with … • What? • … Do our customers experience when the use the product • … needs provoked our offering • What else? … might customers have on their minds • When? … do our customers use this .. • Where? … are our customers when they use this • How? … do customers learn to use the product ..

14. Mind Maps Mind Maps are a tool to Organize the Products of Quizzing

15. Function of Consumption Chain Analysis • A complement to quizzing … • Quizzing is random • Consumption Chain Analysis • Time sequenced • From the time customers first become aware of their need for your product or service • To the time thy finally dispose of the remnants of the used up product

16. Consumption Chain Analysis

17. The Purpose of a Business is to Create a Customer-- Peter Drucker • Even if you create marvelous inventions • Your customers won’t care unless that is exactly what they need • Business customers are especially impatient • With any product that doesn’t help them gain competitive advantage • CCA is about keeping your customer at each step

18. Every Link in the Consumption Chain has its Own Attribute Map • The Attribute Map compares your product to those of others

19. Attribute Maps • Are applied: • Before CCA • At each step of the consumption chain • This can get complex • This forces you to simplify • Minimize strategy drivers • Minimize essential features

20. Summary: Steps for Redifferentiating • For each customer segment sketch the consumption chain • Identify the trigger events that precipitate customer movement from link to link • Put in place procedures to alert you when the trigger is pulled (and plan your response) • Quiz to assess needs that may not be met currently • Create an attribute map for each significant link in the Consumption Chain • Use your knowledge of Customer Experience to create Blockbuster Products • Put the ideas you generate into your opportunity register Repeat this process for each class of stakeholders

21. Case Study: Mad Catz Quizzing, Consumption Chain Analysis, Attribute Maps to optimize (1) Design, (2) Business Model (For Presentation)

22. Mad CatzWhat are Critical Drivers of the Business • Apply Consumption Chain Analysis at each stage of the game controller consumption change • Log each potential customer defection or advancement towards purchasing the controller • Differentiators, exciters, enragers?

23. Mad CatzCreative Tension: Design vs. Competences • Core Competences are the things that the firm does • That they do better than other firms • That are the source of their competitive advantage • They are not necessarily what the customer wants (!!) • Firms establish their core competences by: • Investing in people • Investing in assets, plant and land • Identifying and focusing their mission • How do you reconcile Mad Catz design and business model with their competences?

24. Mad CatzDesign a New Controller • Take what you know of Mad Catz business to design a new controller that: • Fits with Mad Catz capabilities • Maximizes sales • Maximizes profits

25. Innovation Workout Design and Value Map a Business (commercializing an innovation) Morphological boxes