Message Board 3: Applying Value Innovation Techniques to the SBA Apply the concepts and techniques learned in this module to answer the following questions: 1. Widener’s School of Business...

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Message Board 3: Applying Value Innovation Techniques to the SBA

Apply the concepts and techniques learned in this module to answer the following questions:
1. Widener’s School of Business Administration (SBA) competes in the business education industry in the Greater Philadelphia metropolitan market. This is a highly competitive market that includes Ivy League schools like Wharton, state schools like West Chester, and private schools like Drexel. Apply the concepts and techniques learned this week to develop value curves for Widener’s SBA and for each of its competitors listed above.
2. (a) Apply the six value innovation approaches learned this week to identify new market spaces and value-adding opportunities that Widener’s SBA could pursue. (b) Based on the results of this exercise, what additional dimensions would you add to Widener's value curve that you developed in Question #1?
Post your answers to these questions by 11:55pm EST on Friday of this week. Also, post at least one follow-up comment to the answers posted by another class member. Your comment should provide your peer with a constructive evaluation and recommendation aimed at improving he
his answers. Post your follow-up comment by 11:55pm on Sunday.

Creating New Market Space
Managing for Results through Value Innovation
How to Achieve Superior Results by Creating New Market Space
Blue Ocean Strategy
1
Learning Objectives
Understand the concept of value innovation & how it differs from conventional competitive logic
https:
youtu.be/clp-IMpuwaQ (Mauborgne: 6:02)
Understand the various approaches to the creation of new market space (i.e. value innovation approaches)
https:
youtu.be/2N3XqyuOwIM (2:26)
Learn how to plot value curves and how to use the 4-Action framework to create a new value curve for the firm
2
1. What is Value Innovation?
Create products/services for which there are no direct competitors by staking out new market spaces
Why?
Constraints of conventional competitive logic
Convergence of strategy as a result of ↑ competition
↑ competition lowers profitability
Limited perspective of who customers are & what they value
Value innovators can
eak away from the competitive pack
Instead of fighting over cost/differentiation advantages, stake out new market space where competitors have not ventured
XXXXXXXXXXThe Blue Ocean
3
Value Innovation vs. Convention
        Conventional approach    Value Innovation
    Industry assumption    Conditions are given    Conditions can be changed
    Strategic focus    Beating the competition    Maximize value to customers
    Customers    Existing target markets    New target markets
    Capabilities and assets    Leverage existing ones    Less of a constraint
    Product/service offerings    Within traditional boundaries    Establishing new boundaries
4
2. Value Innovation Approaches
Break free from the conventionally defined boundaries of competition – look for new market spaces across:
Substitute industries Ex: Home Depot & Intuit
Strategic groups XXXXXXXXXXEx: Ralph Lauren & Sony Walkman
Buyer groups XXXXXXXXXXEx: Bloomberg & Philips Lighting
Complimentary products XXXXXXXXXXEx: B&N & Dyson
Functional-emotional orientations Ex: Sta
ucks & Body Shop
Time (decisive, i
eversible, & clear trajectory XXXXXXXXXXEx: Cisco
Southwest
5
Example: Virgin Atlantic
Value innovation & creating new market space across complimentary products/services for business travelers
Eliminated first class
Focused on improving business class
Sleeper seats
Added new amenities
The total solution for the busy executive
Lounges with relevant services: showers, apparel XXXXXXXXXXservices, office services, massages
Transportation to/from airport
Maximize value for customers → Business travelers
Extending boundaries
& developing new capabilities
esources
6
3a. Value Curves
A value curve is a graphic depiction of the way a firm or industry configures its offering to customers by plotting the level of a firm’s product/service relative to other alternatives along key success factors
Here value innovation can occur along 3 platforms
Product platform – physical offering
Service platform – support, maintenance, skills
Delivery platform – logistics, channel
7
Example: Airline Industry Value Curves
8
3b. Creating New Value Curves: The 4 Actions Framework
Ask four questions – to challenge industry norms and the firm’s business model
What features should be reduced well below the cu
ent industry standard?
What taken-for-granted features should be eliminated because they add no value?
What features should be raised well above the cu
ent industry standard?
What new factors should be created – features that the industry has never offered before?
9
An Example: Creating New Value Curves & the 4 Actions Framework
Virgin Atlantic
What features should be reduced well below the cu
ent industry standard? # of classes & locations served
What taken-for-granted features should be eliminated because they add no value? First class seating
What features should be raised well above the cu
ent industry standard? In-flight & airport lounge amenities
What new factors should be created – features that the industry has never offered before? Transportation
10
Airline Industry Value Curve
with new Virgin Atlantic value curve
11
An Example of Value Innovation: Yellow Tail Winery
The wine industry is not an attractive one
Intense global competition – flat demand in US
Mounting price pressure → Increasing bargaining power of retail/distributors (i.e. buyers)
Threat of substitutes – beer, malt beverages & spirits
Many new entrants – low ba
iers to entry
Agricultural input/product (i.e. suppliers)
Key Question
How do you
eak out of the vicious competition and find uncontested market space?
Consider value innovation approaches?
Consider the 4 actions framework to create a new value curve?
12
Segmentation in the Wine Industry
Premium wines
High on price, terminology, marketing, aging, legacy, complexity, range
Budget (table or jug) wines
Low on all these features
Wine is promoted as a unique beverage for a sophisticated consumer for special occasions
13
Industry Value Curve: Wine
Industry competes on following dimensions:
Price
Marketing – retail incentives
Esoteric terminology & labeling
Appellation, chateau, vintage, & varietal
Prestige/legacy of winery
Aging as a sign of quality
Complexity – e.g. tannins, oak, minerals
14
Creating a New Value Curve – Yellow Tail Winery
Yellow Tail used the 4 Actions framework
Reduced/eliminated factors that did not add value and which in fact intimidated potential customers
Tannins, complexity, aging, jargon
Raised/added factors not normally offered by wine that attracted consumers of substitute products
Ease of selection, fun labels, smooth taste/fruitiness, retail ambassadors
Found opportunities for value creation by targeting consumers of substitute products, facilitating buying decisions, adding function
https:
www.youtube.com/watch?v=_uVTsle9AIA
15
Value Curves in the Wine Industry
16
Results of Yellow Tail’s Value Innovation Strategy
Within 2 years, Yellow Tail became #1 wine in U.S.
Instead of stealing customers from other wine makers, it created new market space:
Attracted 6 million new customers – those who consumed substitutes (beer, cocktails, coolers)
Increased consumption levels among novices
Drink wine more frequently, not just special occasions
Encouraged jug wine drinkers to trade up
17
Where did Yellow Tail create new market space?
Between substitutes – attracted consumers who wanted simplicity & fun as well as sophistication
Between strategic groups – less of a trade-off between price & quality
Across “buyers” - targeted influencers (retail salespeople)
Combined emotion & functionality of the purchase
Tapped into trends of global affluence – higher global consumption
ought economies of scale
18
Appendix
Value Innovation Approaches & Examples
XXXXXXXXXXfrom “Creating New Market Spaces”
19
New Space Between Substitutes
Understand why/how customers choose between substitutes & offer a product that eliminates the need for trade-offs
Examples
Home Depot – expertise of contractor market vs. cost of hardware stores & DIY
Southwest – speed of flying vs. low cost of driving
Intuit – speed & accuracy of computers vs. simplicity & low cost of pencils
20
New Space Between Strategic Groups
Understand why customers move from one group to another & offer a product that eliminates need for trade-offs
Examples
Lexus & Schwab – quality at an affordable price
Sony Walkman – boom-box acoustics with portable (transistor) radio size
Ralph Lauren – traditional style with haute couture appeal
21
New Space Across “Buyer” Groups
Understanding the different perception of value across purchasers, users, & influencers to uncover new targeted “buyers”
Example
Bloomberg – IT managers and traders defined value differently & Bloomberg targeted traders
Pharmaceutical firms – Shift in focus from influencers (physicians) to users (patients)
22
New Space Across Complements
Understanding the total solution that buyers seek & offering a product that meets other needs related to your product
Examples
Virgin Atlantic – additional services for traveling executives
Borders – additional opportunities/ambience for readers
Dyson – eliminated the need for bags
23
New Space Across Emotional and/or Functional Orientation
Understand that customers may value functionality and/or emotional appeal & offering a product that also addresses the other dimension
Examples
Swatch – added style to a budget watch
Sta
ucks – added ambience/an experience to a commodity product
24
New Space Across Time
Understand significant & i
eversible trends to offer a product that meets the needs created by such trends
Trends must be decisive, i
eversible, & have a clear trajectory
Examples
Google – Using the Internet for information
Cisco Systems – the need to high-speed data exchange
25
High
Legacy
LowLCC
price
locations
# classes
amenities
Legacy and LCC
        High
                                    Legacy
        Low                            LCC
            price    locations    # classes    amenities
Virgin Atlantic Ex
        High
                                    Virgin
                                    Legacy
        Low                            LCC
            price    locations    # classes    amenities    transportation
Sheet3
High
Virgin
Legacy
LowLCC
price
locations
# classes
amenities
transportation
Answered 2 days AfterApr 04, 2022

Solution

Rudrakshi answered on Apr 07 2022
13 Votes
Last Name 9
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Title: Message Board 3: Applying Value Innovation Techniques to the SBA
Contents
1. Value Curves    3
Widener University    3
Drexel    3
West Chester University    4
Wharton Business School    5
2. Six-Value Innovation Approaches    6
(a) Six Value Innovation Approaches    6
(b) Additional Dimensions on Value Curve of Widener    7
Works Cited    9
1. Value Curves
Widener University
Last one is the comparison of Widener University against the five parameters is identified with its pricing through which it is determined that the University has low pricing strategy. The infrastructure parameter of the university is high when it is compared to other Universities.
Next is the environment, which is low as only Wharton Business School has high environment university. Next is the career-relevant education of the University through which it is determined that University offers high career-relevant education facility. Last is the promotion, which is also analyzed that it is having high promotional facility.
Drexel
Based on the various parameters of the blue ocean strategy difference can be seen in the graph. Where the price compared to all the other universities was low except for the Drexel University. When it comes to the infrastructure parameter the competitors of the Drexel University has low infrastructure except for Widener University (Lim et al.).
Next is the environment, which is low of the university and even the competitors having low environment except for Wharton Business School. Another parameter is the career-relevant education and it can be seen from the curve that Drexel University has low parameter when compared to other competitors. Last is the promotion, which is high in case of Drexel University.
Graph 1: Drexel vs. Widener University
West Chester University
When it comes to the comparison of West Chester Prices are low when it is compared to any other University. However, Wharton Business School and Widener University also offers low prices but where chest a University has some other parameters that are comparable to these universities. When it comes to the infrastructure parameter, it is also low in the case of this university as well as Wharton Business School.
Next is environment parameter which is low is well in this university case however on the other hand the university offers high career-relevant education to every...
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