Redifferentiating Products

1
Redifferentiating Products

• Recognizing the Potential of an Innovation

2
Why Business Models Matter

• During the dot-com boom, Business Model was a
  buzzword routinely invoked to glorify all manner
  of half-baked plans
• -- Michael Lewis

3
Why Business Models Matter

• Telling a good story
• Part of selling your strategy / investment
• Tying Narrative to Numbers
• Strategy becomes less philosophy
• More performance and outcome
• When business models dont work
• Its because the fail either
• The Narrative test
• Or the Story test

4
A business model is not strategy

• It doesnt describe external forces
• Competition
• Environment
• Scaling
• It only depicts the systems that will be put into
  place to achieve a strategic objective
• A good model is not enough
• The boxes on the value map need to be understood
  in depth
• In order to develop a good strategy

5
Graphing the Value Map

• External competitive environment (supply demand
  curves)
• Internal strategies, competencies, knowledge,
  assets owned
• Value flows between owners and/or the external
  environment

6
Mad Catz is an example of A Network Business
Models

• Taxonomy of Network Business Models

7
Business ModelsValue Chain IntegratorUses both
Electronic and Logistic Networks
8
Business Models Aggregator (e-Tailor)
9
Business Models Distributive Net, Agora
Alliance
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Creative Tension

• On the one-side are arguments about what the
  customer wants (demand-side)
• On the other-side are arguments about what we can
  do (supply-side)
• Assets and core competences
• Which in turn are determined by
• Mission and Vision statements,
• Business Model and Strategy

11
Why Redifferentiate

• The Encore Problem
• Show me a manger who claims hes in a mature
  business..
• and Ill show you a manger whos asleep at the
  wheel
• --Shelly Weinig
• Redifferentiating is a skill that can be learned
• Quizzing
• Consumption Chain Analysis

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Quizzing

• Detailed look at customer usage and decision
  making regarding your product
• Looks for ideas to Change the Customers
  Experience
• i.e., to redifferentiate your product
• Remember Experience is dynamic
• So are the questions in quizzing

13
How to Quiz

• Ask Questions
• Who?
• is with customers while hey use the product
• How much influence do they have
• If we could arrange it, who would we want the
  customer to be with
• What?
• Do our customers experience when the use the
  product
• needs provoked our offering
• What else? might customers have on their minds
  
• When? do our customers use this ..
• Where? are our customers when they use this
• How? do customers learn to use the product ..

14
Mind Maps

• Mind Maps are a tool to Organize the Products of
  Quizzing

15
Function of Consumption Chain Analysis

• A complement to quizzing
• Quizzing is random
• Consumption Chain Analysis
• Time sequenced
• From the time customers first become aware of
  their need for your product or service
• To the time thy finally dispose of the remnants
  of the used up product

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Consumption Chain Analysis
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The Purpose of a Business is to Create a
Customer-- Peter Drucker

• Even if you create marvelous inventions
• Your customers wont care unless that is exactly
  what they need
• Business customers are especially impatient
• With any product that doesnt help them gain
  competitive advantage
• CCA is about keeping your customer at each step

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Every Link in the Consumption Chain has its Own
Attribute Map

• The Attribute Map compares your product to those
  of others

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Attribute Maps

• Are applied
• Before CCA
• At each step of the consumption chain
• This can get complex
• This forces you to simplify
• Minimize strategy drivers
• Minimize essential features

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Summary Steps for Redifferentiating

• For each customer segment sketch the consumption
  chain
• Identify the trigger events that precipitate
  customer movement from link to link
• Put in place procedures to alert you when the
  trigger is pulled (and plan your response)
• Quiz to assess needs that may not be met
  currently
• Create an attribute map for each significant link
  in the Consumption Chain
• Use your knowledge of Customer Experience to
  create Blockbuster Products
• Put the ideas you generate into your opportunity
  register
• Repeat this process for each class of stakeholders

21
Case Study Mad Catz

• Quizzing, Consumption Chain Analysis, Attribute
  Maps to optimize (1) Design, (2) Business Model
• (For Presentation)

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Mad Catz What are Critical Drivers of the
Business

• Apply Consumption Chain Analysis at each stage of
  the game controller consumption change
• Log each potential customer defection or
  advancement towards purchasing the controller
• Differentiators, exciters, enragers?

23
Mad Catz Creative Tension Design vs. Competences

• Core Competences are the things that the firm
  does
• That they do better than other firms
• That are the source of their competitive
  advantage
• They are not necessarily what the customer wants
  (!!)
• Firms establish their core competences by
• Investing in people
• Investing in assets, plant and land
• Identifying and focusing their mission
• How do you reconcile Mad Catz design and business
  model with their competences?

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Mad Catz Design a New Controller

• Take what you know of Mad Catz business to design
  a new controller that
• Fits with Mad Catz capabilities
• Maximizes sales
• Maximizes profits

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Innovation Workout

• Design and Value Map a Business
• (commercializing an innovation)
• Morphological boxes