Developing Value Proposition, Defining Core

1.

Developing Value
Proposition,
Defining Core
& Planning for
Competitive
Advantage
NVC – Session 5
By Alisher Ismailov

2.

Agenda
• Concept of Value Proposition
• Value Proposition Canvas
• Defining Core Assets
• Understanding Moats
• Analysing Competitive Position

3.

4.

What is Value Proposition
• A value proposition is a simple
statement that summarizes why a
customer would choose your product
or service. It communicates the clearest
benefit that customers receive by giving
you, their business.

5.

Understanding
Customers Needs
1. Who they are
If you sell directly to individuals, find out your customers' gender, age and
occupation. If you sell to other businesses, find out what industry they are in, their
size and the kind of business they are. For example, are they a small private
company or a big multinational? Knowing this can help you identify similar
businesses that you could target.
2. What they do
If you sell directly to individuals, it's worth knowing their occupations and interests.
If you sell to other businesses, it helps to have an understanding of what their
business is trying to achieve.
3. Why they buy
If you know why customers buy a product or service, it's easier to match their needs
to the benefits your business can offer.
4. When they buy
If you approach a customer just at the time they want to buy, you will massively
increase your chances of success.
5. How they buy
For example, some people prefer to buy from a website, while others prefer a faceto-face meeting.

6.

Understanding
Customers Needs
6. How much money they have
You'll be more successful if you can match what you're offering to what you
know your customer can afford. Premium, higher priced products are
unlikely to be successful if most of your customers are on a limited budget.
This is the case unless you can identify new customers with the spending
power to match.
7. What makes them feel good about buying
If you know what makes them tick, you can serve them in the way they
prefer.
8. What they expect of you
For example, if your customers expect reliable delivery and you don't
disappoint them, you stand to gain repeat business.
9. What they think about you
If your customers enjoy dealing with you, they're likely to buy more. And you
can only tackle problems that customers have if you know what they are.
10. What they think about your competitors
If you know how your customers view your competition, you stand a much
better chance of staying ahead of your rivals.

7.

How to write
a value
proposition

8.

Test the Value Proposition
Ask customers:
• Do we really understand the
customer problem the business
model is trying to address?
• Do these customers care enough
about this problem to spend their
hard-earned money on our
product?
• Do these customers care enough
about our product to help us by
telling others through word-ofmouth?

9.

Value
Proposition
Canvas

10.

Value
Proposition
Canvas

11.

12.

Exercise:
• In your mini groups come up with a
business idea that is not present on
the market of Uzbekistan. Try to
think outside of the box.
• Create your Value Proposition
Canvas for your business idea

13.

DEFINE YOUR CORE
• The core is somethings that allows you
to deliver the benefits the customer
value with much greater effectiveness
than your competitors.
• Determine the single thing you will do
better than anyone else that will be
difficult for others to copy.
• Defining Core will allow you to focus
your limited resources to build and
reinforce it.

14.

Three fundamental
elements to a strong Core
1. Unique: This asset will be difficult for anyone
else to replicate.
2. Important: This asset ties directly to your
ability to produce something your target
customer values very highly
3. Grows: To be a strong Core, it should increase
in strength over time relative to competitors.

15.

Warren Buffett on Moats, Castles and Lords
• https://www.youtube.com/watch?v=10
y0kekBO7E&t=82s

16.

What is a
Moat?

17.

VRIO Framework

18.

Exercise
• Think about the industry in which you want to
submit your CW. Select the assets that you
consider core for that industry.
• Define your moats and proposed core assets
• Think about whether those assets are
(Valuable, Rare, Inimitable)

19.

Chart Your Competitive
Position
• Customers don’t really care about your Core.
What they care about are the unique benefits to
them in the areas they are most concerned
about.
• You can leverage your core and your value
proposition to demonstrate whether your
product truly represents a breakthrough in the
customer’s mind.
• The competitive positioning is the link between
your core and your persona’s priorities and
logically make sense for your target market

20.

Understanding
Competitions
You can learn who your customers are from:
Local business directories/ Yellow Pages
Companies' directory/ Registrar of Companies
Your local Chamber of Commerce
Advertising
Press reports
Exhibitions and trade fairs
Questionnaires
Searching online for similar products or services
Information provided by customers
Flyers and marketing literature that have been sent to you - quite common if
you're on a bought-in marketing list
Searching for existing patented products that are similar to yours
Planning applications and building work in progress

21.

Understanding competitors
the products or services they provide and how they market them to customers
the prices they charge
how they distribute and deliver
the devices they employ to enhance customer loyalty and what back-up service
they offer
their brand and design values
whether they innovate - business methods as well as products
their staff numbers and the caliber of staff that they attract
how they use IT - for example, if they're technology-aware and offer a website
and email
who owns the business and what sort of person they are
their media activities - check local newspapers, radio, television and any outdoor
advertising
their online presence - check online networking sites as well as their website

22.

How to chart competitive position?
• You must know the major competitors.
• Take the Persona’s top two priorities and put
them on the worksheet’s grid.
• Plot all the major alternatives the customer
has.
• Options that are plotted closer to the lowerleft corner are bad in all dimensions, whereas
options plotted toward the upper-right corner
are very attractive.
• Finally, plot your position. If you are not in the
upper right-hand corner, you need to go back
and revisit your Core and your market
selection.

23.

Innovate not Imitate
If your competitors are doing something better
than you, you need to respond and make some
changes. This could involve:
• improving customer service
• reassessing your prices
• updating your products
• changing the way you market yourself
• redesigning your literature and website
• changing your suppliers