Davida Vogel 4/8/22 Discussion 3: Applying Value Innovation Techniques to the SBA (1) While examining the highly competitive business education market in the Philadelphia area, it becomes apparent...

1 answer below »

Davida Vogel
4/8/22
Discussion 3: Applying Value Innovation Techniques to the SBA

(1)
While examining the highly competitive business education market in the Philadelphia area, it becomes apparent that there exist a diverse group of key players who compete on a variety of strategic dimensions. The value curve elements that I have focused on for Widener, Wharton, WCU, and Drexel include price, reputation (quality), campus location desirability, availability of online program delivery options, acceptance rate, and student outcomes (graduation and employment rates).
(2)    
Looking across substitute industries- competition with companies in other industries that produce substitute services. With rising tuition costs across the industry, substitutes are gaining more traction. Alternative learning and skill-development options like “mini-MBA” programs or business bootcamps that are only weeks or months long, and learning through conference attendance can be options for those who do not wish to invest thousands of dollars in a traditional MBA program. How can Widener rival some of these alternative options? In some ways, Widener SBA is already trying to do so with the offering of various certificate programs that are shorter, skills-based learning options. Another substitution for pursuing a degree in business is pursuing degrees in other academic fields. Widener SBA does offer joint degree programs, such as the PsyD/MBA to hope to attract learners that may be interested in other fields of study to the value of an MBA as well. A new market space in this respect would be creation of additional joint degrees (at both the undergraduate and graduate level) that Widener SBA has not already established.
Looking across strategic groups within industries- groups of companies within an industry that pursue similar strategy. For Widener, this might include the schools discussed above. Widener SBA should analyze why certain students choose a higher cost program like Wharton or Drexel over schools like Widener and WCU. Widener SBA could explore ways to enhance program quality (like
inging in distinguished adjuncts or lecturers) without increasing price.
Looking across the chain of buyers- understanding who the purchasers are and when that differs from the actual users. In the case of graduate business education, influencers may include employers that encourage, or even pay for, employees to obtain MBA degrees in order to bolster their skills and leadership abilities, and positively affect their company. Widener SBA could promote the value of their programs to employers, such that they might encourage their employees to enroll in one of SBA’s programs.
Looking across complementary product and service offerings- examining the total solution buyers seek when choosing a product or service. When choosing to do an MBA or another business degree, students often seek a well-rounded educational experience with abilities to network, try new skills in practice, and have fun. An area of untapped potential may include opportunities or locations for students to gain practical experience in the area. If it is difficult to get an internship because of lack of relevant businesses in the area around a school, students will be less likely to want to pursue a specific program. Widener SBA could focus on developing strategic partnership in the Chester and su
ounding areas, and a special track for hands-on learning, so that this is exceedingly easy for students to obtain.
Looking across functional or emotional appeal to buyers- competition on emotional appeal vs. rational appeal. In the case of the business education environment, most consumers focus on the practical, rational aspects of whether the program offers a quality education and whether graduation and employment rates indicate that they will be able to find a good job afterwards. SBA could position itself and its faculty as highly supportive and the most inspirational environment in order to appeal to the emotions of consumers.
Looking across time- examining external trends that might affect need for change. Things like focus on climate change and sustainability, as well as diversity, equity and inclusion are becoming more and more central to the decisions that students make when looking at institutions of higher education. By anticipating the needs in these areas, Widener SBA could cater to important values of consumers by considering new offerings. This might include specialty tracks for those looking to implement green and sustainable business practices, as well as tracks for those interested in workplace diversity, equity, and inclusion.
Based on the above approaches, I think that the dimensions that should be added to the value curve include dual-degree options and new tracks or elective course offerings related to sustainability and diversity. These options seem to capture a new market space in ways that other programs do not. Therefore, in these areas, Widener would not have to compete as intensely with other programs.
Widener    Price    Reputation    Desirable Location    Online Program Options    Acceptance Rate    Student Outcomes    3    4.3    1.5    5    3    3.9    Wharton    Price    Reputation    Desirable Location    Online Program Options    Acceptance Rate    Student Outcomes     XXXXXXXXXX    5    4.8    1    0.8    5    Drexel    Price    Reputation    Desirable Location    Online Program Options    Acceptance Rate    Student Outcomes    4.5    4.5    4.7    5    3.2    4    WCU    Price    Reputation    Desirable Location    Online Program Options    Acceptance Rate    Student Outcomes    1.2    1    1    5    5    2    
Low XXXXXXXXXXHigh

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
Answered Same DayApr 08, 2022

Solution

Sudipta answered on Apr 09 2022
9 Votes
2
Comment
As per your post, I can see that you have developed a line graph to determine the position of four companies from six different elements such as price, reputation, desirable location, online programming option, acceptance rate, and student outcomes. The graph is a bit complicated; I would highly recommend you to...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here