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 don’t work
It’s because the fail either
The ‘Narrative’ test
Or the ‘Story’ test

4. A business model is not strategy
It doesn’t 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 Models Value Chain Integrator Uses both Electronic and Logistic Networks

8. Business Models Aggregator (e-Tailor)

9. Business Models Distributive Net, Agora & Alliance
Prosu
mer
Value Space

10. 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 he’s in a mature business..
… and I’ll show you a manger who’s asleep at the wheel”
--Shelly Weinig
Redifferentiating is a skill that can be learned
Quizzing
Consumption Chain Analysis

12. Quizzing
Detailed look at customer usage and decision making regarding your product
Looks for ideas to Change the Customer’s Experience
i.e., to redifferentiate your product
Remember: Experience is dynamic
So are the questions in quizzing

13. How to Quiz Ask Questions Who? What?
… 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 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

16. Consumption Chain Analysis

17. The Purpose of a Business is to Create a Customer -- Peter Drucker
Even if you create marvelous inventions
Your customers won’t care unless that is exactly what they need
Business customers are especially impatient
With any product that doesn’t help them gain competitive advantage
CCA is about keeping your customer at each step

18. Every Link in the Consumption Chain has its Own Attribute Map
The Attribute Map compares your product to those of others
Basic
Discriminator
Energizer
Positive
Nonnegotiable
Differentiator
Exciter
Negative
Tolerable
Dissatisfier
Enrager
Neutral
So What?
Parallel

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

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

22. 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?

24. 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

25. Innovation Workout Design and Value Map a Business Morphological boxes
(commercializing an innovation)
Morphological boxes