A Brief Introduction to BMFO Gemini Consulting

1. A Brief Introduction to BMFO Gemini Consulting February 1992

2. What is a BMFO Framework? Benefits Value Propositions Value Delivery Systems Segments Value Delivery Chains Applying the BMFO Framework How might BMFO principles be applied at xxxxx? Agenda

3. Building aMarketFocussedOrganization

4. Benefits are the desirable end-results we offer target customers Benefits are easily confused with the means of accomplishing them, e.g.: Sometimes benefits are expresses in vague terms, e.g., “superior service” But “peeling the onion” can lead to discovery of benefits BMFO Framework: Benefits The BMFO Approach Means Redefining the Organizationas Providing Benefits, not Products True Benefits (end result for the customer) “Benefits” (means) • R&D capabilities • Inventory in stock • Inventory control • Product development that is proactive in meeting customer needs. • Can obtain the products quickly • Timely shipment of supplies to customers

5. A Value Proposition is a simple, clear internal statement of: Target customers Key Benefits we offer them Priced asked BMFO Framework: Value Proposition The Concept of Value Proposition is at the Core of the BMFO Approach

6. Implementing programs that make target customers aware of the value being offered and that help make the offer credible. BMFO Framework: A Value Delivery System for xxxxx An xxxxx Value Delivery System Would Orient xxxxx Around Delivering Selected Benefits to Target Customer at a Chosen Price Each Business is a Value Delivery System Choose the Value Proposition Selecting the target customer group and deciding the exact combination of benefits and cost to deliver to that group. Choose the Value Proposition Integrating all functional activities so that target customers actually receive chosen benefits at chosen costs. Choose the Value Proposition

7. End-user are the individuals who ultimately derive the benefits delivered by the value delivery system Segments are identified by grouping together end-user deriving similar bundles of fundamental end-result benefits The key to understanding segmentation under BMFO is to understand benefits (as defined earlier), and who the end users who ultimately derive those benefits are. These are generally derived from interviewing, especially in a BMFO Workshop or modified Interface Study format. BMFO Framework: Segments “Customer” Segments are End-User of Benefits, Grouped by Benefits Sought

8. Chains can be viewed as stages in the delivery of benefits to the end user. A value delivery chain is a linked set of value delivery systems. A traditional example would be a raw materials value delivery system, a manufacturing value delivery system, a distribution value delivery system, and a retail value delivery system linked into a value delivery chain. Value delivery systems within the chain may be under the control of one or more organizations. (Example: xxxxx controls part of raw materials value delivery, manufacturing value delivery and distribution value delivery.) It is important to know not only your role in the chain, but what upstream and downstream value delivery systems are like, and the linkages between value delivery systems. BMFO Framework: Value Delivery Chains A Value Delivery Chain Is the Total of All Value Delivery Systems Required to Deliver the Benefit

9. Applying the BMFO Framework: A Schematic Segment Selected Markets by Value Proposition Identify Performance Benchmarks by Segment Define Desired Value Delivery System by Segment Assess Required vs. Current Capabilities Determine Target Segments Monitor Trends and Discontinuities Build or Acquire Capabilities

10. Three primary areas to explore are: Current approach to the business Is it market focused, internally driven, or customer compelled? Current Culture Is it market focused? Does the organization posses the skills and the willingness Need for Change Does management perceive a need to change? Do they perceive a need for increased market focus? Is the organization ready to change? Applying BMFO at xxxxx The xxxxx A&D can be Easily Modified to Includesome A&D Diagnostics