Tuesday, September 14, 2004

Core Value Proposition

In the most recent HBR (Augusts 2004), George Day makes a case for determining a growth S. based on your company's value proposition. "To craft a winning growth S, you must first firmly identify your company’s value proposition—including its capabilities, assets, and cultural DNA. What is your company really good at? Do you best compete on price, on integrated solutions, or on innovation? Based on your true value proposition, you should select the S. that imbues this proposition with meaning and direction. Growth will naturally follow". Day recommends:
- Price-value leaders grow best by extending their low-cost value proposition to adjacent markets.
- Relational players can look for latent customer needs that they can solve well.
- Performance-value leaders grow best through continuous innovation—think. These companies should exploit emerging and converging technologies.
To achieve superior profitability, you need to beat your competition in at least one of these value arenas and equal them in the other two.
Remarkably Mr. Day not even mentions the book "The Discipline of Market Leaders" from Treacy and Wiersema (1994).