On The Verge

In my previous post that introduces Marco's fruit stand, we identify that he has chosen a very specific value proposition and strategy. Marco provides his customers with the "best-tasting fruit." He has invested time and resources in creating business activities and processes that deliver his value proposition to the customer. At the same time he knows the importance of delivering other components of value reasonably and adequately. We call this the Verge. Marco doesn't differentiate his fruit stand from Ray by delivering vast selection, low price, or even convenience. However, he knows that if he doesn't meet basic standards and expectations in these components that his customers will cease from coming. The art of a successful business and successful management is understanding how to differentiate the product or service while maintaining these basic standards. The management team at Apple knows that it's products are differentiated by its cutting-edge and innovative image. However, they also know that "verge" standards must also be met in the pricing area or demand will vanish.

As you take your business through the strategic planning process you must ensure that you differentiate your product or service without ignoring other non-core types of customer value.

(Start at the beginning) http://mybilliondollarfruit-stand.blogspot.com/2006/11/introduction-to-fruitstand-concept.html

Technorati Profile

Default Customer Value (AKA..."we suck less")

We've covered the three primary ways in which organizations can create value for customers. These groups have been discussed to great extent by several well-known and respected authors such as Micheal Treacy, Michael Porter, and Geoffrey Moore. We're not breaking new ground here. However, we have added a fourth value strategy or value proposition. This can easily be categorized as an organization's "default" strategy. I refer to this strategy as the "we suck less" position. Essentially, any organization that creates a strategy without customer value as the central focus is planning for certain mediocrity. Firms that don't position their entire operating model around a clear and specific value proposition are sure to wind up competing on price. These organizations are basically saying, although most certainly not out loud, that we just attemp to "suck less" than our closest competition. If we are not as bad as our competitor and our price is lower then we win the business.

If you've read previous posts then you know that our fruitstand owner, Ray, has adopted an "all things to all people" strategy. We quickly categorize this strategy as no strategy at all. Where is the squirrel-like focus? Ray, without being aware, has adopted the "we suck less" strategy.