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Value Innovation: The Strategic
Logic of High Growth
How
do you sustain high growth and high
profits? According to Kim and
Mauborgne in the January - February
1997 issue of Harvard Business
Review, the answer is to approach
strategy using value innovation.
This value innovation focus is not
on beating competitors, but on
adding quantum leaps in value for
the customer. Value innovators look
for powerful new ideas that offer
great benefit to the customer. Value
innovators want to dominate the
market by offering great increases
in value.
The
authors say examine the factors
which impact your value curve, such
as:
Ask
four questions about the factors
on the value curve:
-
What can be eliminated?
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What can be reduced?
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What can be moved well above
industry standards?
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What can we create that has
never been offered?
And,
work on one of the three platforms
where value innovation can occur: ·
Product - Often companies only focus
here for innovation · Service - Make
the experience completely different
and irresistible · Delivery - Drive
delivery time down significantly
This
is an excellent article on strategic
planning and strategic focus. As you
work on your strategic planning,
consider bringing value innovation
into your planning process. It may
help bring innovation and new
insight to your company's direction.
Significant Gains from Business
Process Improvement
We are
assisting a client with a Business
Process Improvement project looking
at processes from order entry to
shipping of the finished product.
And, where are the significant
gains?
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Driving down cycle times
to quickly ship the product to
the customer
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Expanding standardization
to reduce costs and improve
efficiencies
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Implementing teams to
solve problems in scheduling,
quality assurance, purchasing
and cost estimating.
These
critical success factors are used to
measure performance as processes are
examined:
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Effectiveness - Meets
internal and external customer's
needs and is continually
improved.
-
Efficiency - Most output
for a minimum input and waste is
reduced.
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Adaptable - Flexible to
changing customer needs.
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