Post on 21-Oct-2014
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THE TRADE-OFF MAP & STRATEGY FOR THE IPHONEShould Apple Cut Down the Price of the iPhone?
Dr. Rod King
Inexpensively Leapfrogging the Competition
ALTERNATIVES: ………………Trade-off Quotient (TQ)= Pain/Delight= Inconvenience/Fidelity= Customer Exp. Quotient
SELECTION/ACTION: ………
DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
• Personalization (Identity/Character)
• Differentiation (Social Status/Cachet)
• Quality (Content/Performance)
DELIGHT (Fidelity)
• Complexity (Time)
• Inaccessibility/Unavailability
• Cost (Price)
PAIN (Inconvenience)
TOOL
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
MARKET (CUSTOMER MAIN DESIRED EXPERIENCE/INTENT/NEED/OBJECTIVE/JOB): …………………………………………………………………..……….
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP For Total Customer Experience Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
(-): PAIN
(+): DELIGHTDisruption Spot
Luxury Spot
Strategic Choice
High
Low
Low High
Zero Trade-off(“What customers ultimately want:Free, Perfect, Now”)
MARKET (CUSTOMER JOB): ………………………………….Period/Year: …………….…………………………………………..
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP Illustrating All StrategiesStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ Zone
Convenience Inconvenience
High-end
Low-end
Disruption Spot
SuperHit
Green Ocean
Oasis
Sweet Spot
No Man’s Land
Volcano
Luxury Spot
Red Ocean
Fidelity Belly
MARKET (CUSTOMER JOB): ………………………………….Period/Year: …………….…………………………………………..
Zero Trade-off(cf. “Wrecking-ball moment”)
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF STRATEGY For Luxury Spot Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Name of Business: ………………………………………………………………………………………………….… Year: ……………………
Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for Typical Product/Service inLuxury Spot
Zero Trade-off Luxury Spot
ELEMENTS OF TRADE-OFF STRATEGY FOR LUXURY SPOT-PRODUCT/SERVICE:
Trade-off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………
• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………
Customer Value PropositionHigh performance (brand) at exclusive price
Targeted Customer Segment (Interviewees)Well-to-do customers in the ‘short head’
Customer Experience/Value Proposition: …………………………………………………………………………….…………………
Scenarios for Apple’s iPhone
Should Apple drastically cut down the price of the iPhone?
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP for the iPhone ExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
(“Should Apple drastically cut down the price of the iPhone?”)
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ Zone
Disruption Spot?
Luxury Spot (2009)
Zero Trade-off(cf. “Wrecking-ball moment”)
High
Low
Low High
Fidelity Belly(Super-)convenience
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2007 to Date
SuperHit? Sweet Spot?
Oasis?
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Customer Experience/Value Proposition: High functionality-smartphone/mobile computer (that is affordable)
TRADE-OFF STRATEGY for the iPhone (2009 & 2011) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Scenarios of the iPhone for 2009 and 2011Name of Business: Apple, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication/Computing
Mission/Vision: Platform or hub for mobile communication and information processing (computing)
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for the iPhone Experience
Zero Trade-off iPhone (2009) iPhone (2011)
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER IPHONE (2011)
Trade-Off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce Social Aura & Cachet/Identity (‘Character’)/Love- Increase Quality (Content/Perform.)/Need- Create/Procure ……………….…….……………
• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce Cost (Price)/Complexity- Increase Accessibility/Availability/Simplicity- Create/Procure ……………….…….……………
Customer Value PropositionHigh performance (brand) at lower price
Targeted Customer Segment (Interviewees)Average customers in the ‘long tail’
Scenarios for Motorola’s RAZR
Should Motorola have drastically cut down the price of the RAZR?
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP for the RAZR Experience(“Should Motorola have drastically cut down the price of the RAZR?”)
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ ZoneZero Trade-off(cf. “Wrecking-ball moment”)
High
Low
Low High
Fidelity Belly(Super-)convenience
No Man’s Land (2007)
Volcano (2004)
Luxury Spot (iPhone - 2007)
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2004 to 2007
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Customer Experience/Value Proposition: Highly aesthetic mobile phone that is affordable
TRADE-OFF STRATEGY for the RAZR (2004 & 2007) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Scenarios of the RAZR for 2002 and 2007Name of Business: Motorola, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for the RAZR Experience
Zero Trade-off RAZR (2004) RAZR (2007)
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER RAZR (2007)
Trade-off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce Social Aura & Cachet/Identity (‘Character’)/Love- Increase Quality (Content/Perform.)/Need- Create/Procure ……………….…….……………• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce Cost (Price)/Complexity- Increase Accessibility/Availability/Simplicity- Create/Procure ……………….…….……………
Customer Value Proposition2004: Superslim camera-phone at high price2007: Superslim camera-phone at low priceTargeted Customer Segment (Interviewees)2004: Well-to-do customers in ‘short head’2007: Average customers in ‘long tail’
CUSTOMER LOYALTY
Higher level criteria for assessing impacts of a
business strategy:CUTTING DOWN THE PRICE
OF THE IPHONE
CORE COMPETENCE (KNOWLEDGE)
SHAREHOLDER VALUE
BRAND EQUITY
STRATEGIIC FIT IN VALUE NETWORK ECOSYSTEM GROWTH/SUSTAINABLILITY
PROFIT (REVENUE) COMPETITIVE POSITION IN SECTOR
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
WHY?
DECISION-MAKING QUESTION:
SHOULD APPLE CUT DOWN THE PRICE OF THE IPHONE?
WHEN?
HOW MUCH?
WHO?
HOW? WHAT NEXT?
WHAT? WHERE?
Copyright 2009. Dr. Rod King. rodkuhnking@sbcglobal.net & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing