compared to other organizations A different tailored value chain Clear

Compared to other organizations a different tailored

This preview shows page 24 - 29 out of 46 pages.

compared to other organizations A different , tailored value chain Clear tradeoffs, and choosing what not to do Activities that fit together and reinforce each other Continuity of strategy with continual improvement in realizing the strategy
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25 Copyright 2005 © Professor Michael E. Porter 20060606 HSM Chicago – 06052006 Final NV.ppt Defining the Value Proposition What Relative Price? What Customers? Which Needs? What end users? What channels? Which products? Which features? Which services? A novel value proposition can also grow the pie/expand the industry
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26 Copyright 2005 © Professor Michael E. Porter 20060606 HSM Chicago – 06052006 Final NV.ppt Strategic Positioning Enterprise Rent-A-Car Home-city replacement cars for drivers whose cars are being repaired or who need an extra vehicle, at low rates (30% below airport rates) Numerous, small, inexpensive offices in metropolitan areas, including on-premises offices at major accounts Open during daylight hours Deliver cars to customers’ homes or rental sites, or deliver customers to cars Acquire new and older cars, favoring soon-to-be discontinued older models Keep cars six months longer than other major rental companies In-house reservations Grassroots marketing with limited television Cultivate strong relationships with auto dealerships, body shops, and insurance adjusters Hire extroverted college graduates to encourage community interaction and customer service Employ a highly sophisticated computer network to track its fleet Value Proposition Distinctive Activities
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27 Copyright 2005 © Professor Michael E. Porter 20060606 HSM Chicago – 06052006 Final NV.ppt Strategic Positioning Whole Foods Markets Natural, fresh, organic, and prepared foods and health items with excellent service at premium prices Educated, middle class, and affluent customers passionate about food as a part of a healthy lifestyle Well-lit, inviting supermarket store formats with appealing displays and extensive prepared foods sections Produce section as “theater” Café-style seating areas with wireless internet for meetings and meals Each store carries local produce and has the authority to contract with the local farmers Information and education provided to shoppers along with products High touch in-store customer service via knowledgeable, non-unionized, highly motivated personnel Egalitarian compensation structure Own seafood procurement and processing facilities to control quality (and price) from the boat to the counter Donates 5% of profits to non-profits Each store has “green projects,” directed by employees to improve environmental performance Value Proposition Distinctive Activities Excellent strategies often include a social dimension of the value proposition
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28 Copyright 2005 © Professor Michael E. Porter 20060606 HSM Chicago – 06052006 Final NV.ppt Making Strategic Tradeoffs Tradeoffs occur when strategic positions are incompatible the need for a choice
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