The Value Proposition (Unique Market Positioning Statement) Customer Criteria Do target customers understand the value proposition? Is the value relevant to the target customers’ needs? Do target customers believe the value proposition? Will the value proposition provoke customer action?

Company Criteria Will the company support the proposition? Does the company have the resources and capabilities to “own” the

proposition? Does selection of the proposition limit future growth into other markets?

Competitor Criteria Are competitors trying to provide a similar value proposition? Do current competitors have the resources and capabilities to copy the

proposition? How easy is it for the required resources and capabilities to be developed?

The Value Proposition (Unique Market Positioning Statement)

Focuses Key Benefit on Key (usually primary) Target Market group

What is the value proposition for:

Volvo ?

Four Seasons Hotels?

WestJet?

Resource Systems (in-house and partners)

Align these with the Value Proposition

Unique: Good resource systems provide benefits, capabilities and activities that are different from those of competitors

Linked: Good resource systems have links between capabilities and benefits, among capabilities, among resources, and between virtual-world and physical-world business systems

Sustainable: Good resource systems are difficult for competitors to replicate

Resources Systems for an on-line venture often include: Domain Hosting on a server often through an Internet Service Provider

(ISP) eCommerce solutions such as Shopping Carts for on-line transactions (a

simple eCommerce solution for a small- to medium-sized business could be Pay Pal (http://www.paypal.com)

a delivery provider for distribution, such as a popular courier company like FedEx, UPS or Purolator

Direct vs. Indirect Competitors

– Direct Competitors are rivals in the same industry products are “close substitutes” reach and compete for same customers (ex. Dell and Compaq)

– Indirect Competitors include:

– Substitute Producers produce products and services that serve the same function

Compare britannica.com with google or portal sites

– Adjacent Competitors have the potential to offer “close substitutes” quickly

MSN GameZone was popular gamer site but offered no direct competition to Nintendo or Sony until they produced the XBox

– Or use similar technologies or systems Ex. Apple iPhoto competes with Kodak indirectly

Customer Dynamics

Magnitude of unmet need Look for trapped or new-to-the-world value here as the most profitable Ex. eBay found customers who wanted to sell goods in the challenging auction

market eBay unlocked the trapped value (created a more efficient market) and used new-to

the -world technology to do so

Interaction between segments measures the level of reinforcing activity that generates more purchase and usage.

Customers can create a “viral” effect here How does bluemountain.com do this?

Likely rate of growth estimates annual growth of underlying customer-unit market– E.g. onvia.com takes advantage of the fast-growing, small-business market by

connecting them to government contracts

Technology Vulnerability

Technology adoption measures customers’ adoption of the technologies required to recognize the value of the offering

What penetration level is necessary (ex. Broadband modems)

Impact of new technologies considers the likelihood of a new technology radically altering the economics or attractiveness of the offering

ex. file-sharing (peer-to-peer) and MP3

Microeconomics

Market size is the dollar value of all sales generated in a particular market

Profitability is the profit margin that can be realized in the market Always consider how the company will make money

direct sales advertising subscriptions purchases merchandisingthird-party partners and affiliatessponsored contentEvents (possibly sponsored or co-sponsored)

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