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NB. To see slide transitions download. This is another presentation made for Lean Liverpool on 13th Dec 2012. It follows on from the previous presentation in which CATWOE was introduced as a means of defining the value proposition. This goes deeper and also looks at the increases in corporate innovation and revenue streams that flow from realising the true purpose of an enterprise and its value proposition. We also have some fun with David Beckham's package and the Wondabra
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The Systemic Nature of the Value PropositionUsing CATWOE to define the value proposition for a Lean Startup. Lean Liverpool 13th Dec 2012.
C is for CUSTOMER—the principal beneficiary and for whom the system exists
A is for ACTORS—those with knowledge and skill underpinning service to C
*T is for TRANSFORMATION —the effect/benefit felt by the customer
Places emphasis on the functionality of the system from the customer POV*
W is for WORLDVIEW or values of the actors involved (manager dominant)
O is for OWNERSHIP—the person or entity able to stop the system
E is for ENVIRONMENT—the context (e.g. physical, regulatory) of operation
CATWOE-Mnemonic
Part of the soft systems method of system or organisational analysis, design (business model) with a view to improving performance
used to generate a concise statement of core purpose also called the root definition which contains the value proposition.
The model of an organisation/enterprise cascades from its core purpose or reason for existing
It has to be customer focused
Enterprise System
Customer System
Supplier Enterprise
System
Conventional use of CATWOE to define separate systems
Customer System
Transformation becomes the beneficial effect on the customer system-value proposition
Unconventional use of CATWOE to define the value proposition
Enterprise System
Core Purpose
Activity 1
Activity2
Activity 3
CATWOE and Business Model Canvas
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Illustration of CATWOE in action…1
ABC Ltd is a company based in Merseyside (E) owned by Mr Y (O) and provides an excellent service (W), at a profit (W), to manufacturers (C) requiring the application of performance enhancing surface coatings (T) to metallic substrates (components) used in high value added machinery and systems (for example aircraft parts). The core purpose is, therefore, not to make or manufacture, but to increase the performance of components through the application of a surface coating.
ABC described itself as a manufacturer, involved in metal coating.
Illustration of CATWOE in action…2
This company considered itself a hat manufacturer, but they also imported hats and supplied to retailers through a wholesaling activity. They mostly made hats to order, but they also make hats for stock. Hats fell into three categories: uniform hats, leisure hats, technical hats (H&S) related. They also designed hats.
A company owned by its MD (O) and embedded in Merseyside (E) that makes a profit (W) and created employment (W) by designing, making, and otherwise supplying head wear as a functional element of a uniform set of clothes so satisfying a user’s desire or need for dress uniformity (C) as an integral part of establishing or building an identity (T). This definition excludes hats designed for specific ‘technical’ functions because they require different actors to design and make them, and may be marketed to customers with special needs. CATWOE analysis suggests this aspect of the business should be pursued as a distinct but complementary business.
Business core purpose should be expressed or captured in a single sentence,
CATWOE and Discovering Revenue StreamsActivity 1 Activity 2
What’s the common factor? Cleaner teeth? Oral hygiene? Oral Care?
Value proposition is improved oral hygiene, giving healthier teeth and gums for longer.
Innovation- Multiple revenue streams
Marx and the manipulation of the value proposition
Karl Marx distinguished between
Exchange-value and Use-value
Product design
Advertisingcopy
packaging
Enhance the value proposition and increasethe exchange-value
THE PROMISE OF USE-VALUE
THE PROMISE OF USE-VALUE
