Idea in Practice: Focus On What The Majority of Your Buyers Value

KIM AND MAUBORGNE
Idea in Practice
To become a value innovator, sive and superior accommodations
consider the following strategies, to cost-conscious travelers.
as exemplified by French hotelier
Accor: Focus on what the majority of your
buyers value. Accor identified what
Assume that you can shape your customers of all budget hotels
industry’s conditions. In the mid- wanted: a good night’s sleep for a
1980s, the budget hotel industry in low price.
France had two markets: inexpen-
sive hotels that had poor beds and Consider how you might change
noise, and pricier hotels that pro- your offering to capture the
vided upscale amenities and a de- market you’ve identified. Eliminate
cent night’s sleep. Accor redefined features that offer no value for
the industry by providing inexpen- customers—or that detract from
How Kinepolis achieves profitable growth
Go for a quantum leap Go for the mass of Think beyond

in value; competition moviegoers; let some existing assets
is not the benchmark. customers go. and capabilities.
Industry’s conditions Think in terms of the total

can be transcended. Kinepolis solution buyers seek.
Company’s Perspective Customers’ Perspective

Economies Low Better
of personnel land overall Free and Superior screens, Best pick of
and overhead costs margins easy parking sound, and seats blockbusters
Low
marketing
costs
Cost Cost
savings additions
Low cost Competitive Radically superior

position price cinema experience
High Expanded Quantum leap

volume market in value
High growth in revenues and profits
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KIM AND MAUBORGNE
Two strategic logics
The five
dimensions Conventional Value innovation
of strategy logic logic
Industry Industry’s conditions are given. Industry’s conditions can be

assumptions shaped.
Strategic A company should build competitive Competition is not the

focus advantages. The aim is to beat the benchmark. A company should
competition. pursue a quantum leap in value
to dominate the market.
Customers A company should retain and ex- A value innovator targets the
pand its customer base through mass of buyers and willingly
further segmentation and custom- lets some existing customers
ization. It should focus on the go. It focuses on the key
differences in what customers value. commonalities in what
customers value.
Assets and A company should leverage its A company must not be con-
capabilities existing assets and capabilities. strained by what it already has.
It must ask, What would we do
if we were starting anew?
Product and An industry’s traditional boundaries A value innovator thinks in

service determine the products and services terms of the total solution
offerings a company offers. The goal is to customers seek, even if that
maximize the value of those offerings. takes the company beyond its
industry’s traditional offerings.
and quantum leaps in value. Had Bert Claeys, for example, taken its
industry’s conditions as given, it would never have created a mega-
plex. The company would have followed the endgame strategy of
milking its business or the zero-sum strategy of competing for share
in a shrinking market. Instead, through Kinepolis, the company
transcended the industry’s conditions.
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VALUE INNOVATION
Formule 1’s value curve

Formule 1 offers unprecedented value to the mass of budget hotel customers
in France by giving them much more of what they need most and much less of
what they are willing to do without.
High
Average two-star
Relative level
hotel’s value curve
Average one-star
hotel’s value curve
Formule 1’s value curve

Low
Eating Lounges Availability Bed quality Room
facilities of receptionist quietness
Architectural Room size Furniture Hygiene Price
aesthetics and amenities
in rooms
Elements of product or service
mass of buyers. Instead of competing on customers’ differences, SAP

sought out commonalities in what customers value. The company
correctly hypothesized that for most customers, the performance
advantages of highly customized, individual software modules had
been overestimated. Such modules forfeited the efficiency and in-
formation advantages of an integrated system, which allows real-
time data exchange across a company.
In 1979, SAP launched R/2, a line of real-time, integrated business
application software for mainframe computers. R/2 has no restric-
tion on the platform of the host hardware; buyers can capitalize on
the best hardware available and reduce their maintenance costs dra-
matically. Most important, R/2 leads to huge gains in accuracy and
efficiency because a company needs to enter its data only once. And
R/2 improves the flow of information. A sales manager, for example,
can find out when a product will be delivered and why it is late by
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KIM AND MAUBORGNE
How has Compaq stayed on top of the server industry?
By following its first value innovation . . .

High
1989: 1992:
SystemPro ProSignia
Low
. . . with another
High
1993: ProLiant 1000
Relative level
Feature
innovations
1992:
ProSignia
Low
. . . and then another.

High
Feature
innovations
1994: ProLiant 1000

rack-mountable
1993: ProLiant 1000 server
Low
Expandability File and print Price Configurability Storability Security
compatibility
General Performance Reliability Manageability Serviceability

application
compatibility
Elements of product or service
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KIM AND MAUBORGNE
Testing the growth potential of a portfolio of businesses
Current portfolio Planned portfolio
Pioneers
Businesses
that represent
value innovations
Migrators
Businesses
with value
improvements High growth
trajectory
Settlers
Businesses that
offer me-too
products and
services
can be expected. But the company is not exploiting its potential for
growth and risks being marginalized by a value innovator. This ex-
ercise is especially valuable for managers who want to see beyond
today’s performance numbers. Revenue, profitability, market share,
and customer satisfaction are all measures of a company’s current
position. Contrary to what conventional strategic thinking suggests,
those measures cannot point the way to the future. The pioneer-
migrator-settler map can help a company predict and plan future
growth and profit, a task that is especially difficult—and crucial—in
a fast-changing economy.
Originally published in January–February 1997. Reprint R0407P
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FAIR PROCESS
Two complementary paths to performance
Distributive justice Procedural justice
Traditional tools Fair process

Management Resource allocation Engagement
tool Economic incentives Explanation
Organizational structure Expectation clarity
Outcome satisfaction Trust and commitment

Attitude
“I got what I deserved.” “I feel my opinion counts.”
Voluntary cooperation
Compulsory cooperation
Behavior “I’ll go beyond the call
“I’ll do what I’m told.”
of duty.”
Exceed expectations
Performance Meet expectations
Self-initiated
Performance frontier
of voluntary cooperation
Performance frontier
of compulsory cooperation
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KIM AND MAUBORGNE
Creating a new value curve

The value curve—a graphic depiction of the way a company or an industry con-
figures its offering to customers—is a powerful tool for creating new market
space. It is drawn by plotting the performance of the offering relative to other
alternatives along the key success factors that define competition in the indus-
try or category.
To identify those alternatives, Intuit, for example, looked within its own in-
dustry—software to manage personal finances—and it also looked across sub-
stitute products to understand why customers chose one over the other. The
dominant substitute for software was the lowly pencil. The value curves for
these two alternatives map out the existing competitive space.
The value curves in personal finance before Quicken
The software offered relatively high levels of speed and accuracy. But customers
often chose the pencil because of its advantages in price and ease of use, and
most customers never used the software’s optional features, which added cost
and complexity to the product.
High
Relative level
Personal financial
software
The pencil
Low
Price Ease of use Optional Speed Accuracy
features
Key elements of product, service, and delivery
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CREATING NEW MARKET SPACE
The key to discovering a new value curve lies in asking four basic questions:
Reduce
What factors should be reduced well below the industry standard?
Eliminate Create
What factors should What factors should
be eliminated that New value be created that the
the industry has curve industry has never
taken for granted? offered?
What factors should be raised well beyond the industry standard?

Raise
Quicken’s value curve

Answering the four questions led Intuit to create a new value curve, which
combines the low price and ease of use of the pencil with the speed and
accuracy of traditional personal-financial software.
High
Quicken
Relative level
Other personal
financial
software
The pencil
Low
Price Ease of use Optional Speed Accuracy
features
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KIM AND MAUBORGNE
Bloomberg’s value curve at its debut

To establish its value curve, Bloomberg looked across the chain of buyers from
the IT managers that had traditionally purchased financial information systems
to the traders who used them. Its value innovation stemmed from a combi-
nation of creating new features—such as on-line analytic capabilities—that
traders rather than IT managers value and raising ease of use by an order of
magnitude.
High On-line financial information industry
Bloomberg
Relative level
Low
Price Coverage of Coverage Terminal On-line Historical Lifestyle
price quotes of news ease of use analytics price data information
did not account for the full cost of lighting. Because lamps con-
tained environmentally toxic mercury, companies faced high dis-
posal costs at the end of a lamp’s life. The purchasing department
never saw those costs, but CFOs did. So in 1995, Philips introduced
the Alto, an environmentally friendly bulb that it promotes to CFOs
and to public relations people, using those influencers to drive
sales. The Alto reduced customers’ overall costs and garnered com-
panies positive press for promoting environmental concerns. The
new market Alto created has superior margins and is growing rap-
idly; the product has already replaced more than 25% of traditional
T-12 fluorescent lamps used in stores, schools, and office buildings
in the United States.
Many industries afford similar opportunities to create new mar-
ket space. By questioning conventional definitions of who can and
should be the target customer, companies can often see fundamen-
tally new ways to create value.
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CREATING NEW MARKET SPACE
Value innovation in book retailing

Borders and Barnes & Noble looked across complementary products and ser-
vices to establish a new value curve in book retailing. Their book superstores
raised the selection of books, the level of staff knowledge, and the range of
store hours well above the industry standards while lowering price and creat-
ing a wholly new reading environment.
High
Borders and Barnes & Noble
Relative level
Independent
bookstores
Mall
bookstores
Low
Price Knowledgeable Selection Store Store Café and
staff of books ambience hours lounge area
sure of reading and intellectual exploration. In less than six years,

Borders and B&N have emerged as the two largest bookstore chains
in the United States, with a total of more than 650 superstores
between them.
We could cite many other examples of companies that have fol-
lowed this path to creating new market space. Virgin Entertain-
ment’s stores combine CDs, videos, computer games, and stereo
and audio equipment to satisfy buyers’ complete entertainment
needs. Dyson designs its vacuum cleaners to obliterate the costly
and annoying activities of buying and changing vacuum cleaner
bags. Zeneca’s Salick cancer centers combine all the cancer treat-
ments their patients might need under one roof so they don’t have
to go from one specialized center to another, making separate
appointments for each service they require.
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KIM AND MAUBORGNE
uses simple refillable plastic bottles. The Body Shop spends little
on advertising, again because its customers get no functional value
from it. In short, the Body Shop hardly looks like a cosmetics com-
pany at all. The company’s approach— and its emphasis on natu-
ral ingredients and healthy living—was so refreshingly simple that
it won consumers over through common sense and created new
market space in an industry accustomed to competing on a tried-
and- true formula. (See the graph “Is the Body Shop a cosmetics
company?”)
A burst of new market creation is under way in a number of
service industries that are following this pattern. Relationship
businesses like insurance, banking, and investing have relied
heavily on the emotional bond between broker and client. They
are ripe for change. Direct Line Insurance in Britain, for example,
Is the Body Shop a cosmetics company?

By reconsidering the traditional basis of appeal of its industry, the Body
Shop created a value curve so divergent that it hardly looks like a cosmetics
company at all. In appealing to function rather than emotion, the Body Shop
reduced price, glamour, and packaging costs while creating a new emphasis
on natural ingredients and healthy living.
High
Relative level
Cosmetics industry
The Body Shop
Low
Price Packaging High-tech Glamourous Natural Representation
and cosmetics image ingredients of healthy
advertising science living
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KIM AND MAUBORGNE
Shifting the focus of strategy

From head-to-head competition to creating new market space
The conventional
boundaries of Head-to-head Creating new market
competition competition space
Industry Focuses on rivals within Looks across substitute

its industry → industries
Strategic group Focuses on competitive Looks across strategic

position within strategic → groups within its
group industry
Buyer group Focuses on better Redefines the buyer group

serving the buyer group → of the industry
Scope of product Focuses on maximizing Looks across to com-

and service the value of product → plementary product and
offerings and service offerings service offerings that go
within the bounds of its beyond the bounds of its
industry industry
Functional- Focuses on improving Rethinks the functional-

emotional price-performance in → emotional orientation of
orientation of line with the functional- its industry
an industry emotional orientation of
its industry
Time Focuses on adapting to Participates in shaping

external trends as they → external trends over time
occur
talking about predicting the future, which is inherently impossible.

We’re talking about finding insight in trends that are observable
today. (See the diagram “Shifting the focus of strategy.”)
Three principles are critical to assessing trends across time. To
form the basis of a new value curve, these trends must be decisive to
your business, they must be irreversible, and they must have a clear
trajectory. Many trends can be observed at any one time—a discon-
tinuity in technology, the rise of a new lifestyle, or a change in regu-
latory or social environments, for example. But usually only one or
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KIM AND MAUBORGNE
The buyer utility map

By locating a new product on one of the 36 spaces shown here, managers can
clearly see how the new idea creates a different utility proposition from exist-
ing products.
The six stages of the buyer experience cycle

Purchase Delivery Use Supplements Maintenance Disposal
Convenience Simplicity productivity
Customer
The six utility levers
Risk
Fun and
image
friendliness
Environ-
mental
do their thing faster, better, or in different ways. The financial infor-

mation company Bloomberg, for example, makes traders more effi-
cient by offering on-line analytics that quickly analyze and compare
the raw information it delivers.
By locating a new product on one of the 36 spaces of the buyer
utility map, managers can clearly see how the new idea creates a dif-
ferent utility proposition from existing products. In our experience,
managers all too often focus on delivering more of the same utility
at the same stage of the buyer’s experience. That approach may be
reasonable in emerging industries, where there’s plenty of room for
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Uncovering the buyer experience cycle

A customer’s product experience passes through six basic stages. To help companies assess the quality of a buyer’s total
experience, we have identified the key questions for each stage. Individually, these questions may be obvious, but taken
together, they uncover the full picture of the experience cycle.
KNOWING A WINNING BUSINESS IDEA WHEN YOU SEE ONE

The buyer experience cycle
How long does it How long does Does the Do you need Does the product Does use of
take to find the it take to get product require other products require external the product
product you need? the product training or and services to maintenance? create waste
delivered? expert make this items?
Is the place of assistance? product work? How easy is it to
purchase How difficult maintain and How easy is it
attractive and is it to unpack Is the product If so, how upgrade to dispose
accessible? and install the easy to store costly are they? the product? of the product?
new product? when not in use?
How secure is
the transaction How effective are
environment? the product’s
features and
How rapidly functions?
can you make
a purchase?
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KNOWING A WINNING BUSINESS IDEA WHEN YOU SEE ONE
to lead rests on its ability to keep staking out new utility spaces before its
competitors do.
The six stages of the buyer experience cycle

Convenience Simplicity productivity
Customer
OneSource
The six utility levers
24/7 service
Schwab One
cash manage-
ment account
Secure
transactions
Risk
Instantaneous
confirmations
Fun and
image
friendliness
Environ-
mental
establishing chic coffee bars that offer an exotic mix of brews, the
company injected fun and cachet into the coffee-purchasing experi-
ence. As a result, middle class America has become coffee literate,
and coffee bars have become American fixtures.
Using the same utility lever in a new stage. Companies can also
innovate by extending a familiar utility to different parts of the
customer’s product or service experience. That’s how Michael Dell
changed the computer business. Computer manufacturers used
to compete by offering faster computers with more features and
software. In terms of the map, they offered customers more pro-
ductivity in the use of the machines. Dell extended the same util-
ity to the delivery experience. By bypassing dealers, Dell delivers
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KIM AND MAUBORGNE

The price corridor of the mass
To find the right price for your new product, you must first identify the price corridor of the mass—that is, the price bandwidth
that captures the largest groups of customers. Then, depending on how much legal and resource protection you have, deter-
mine how high a price you can set without inviting in competitors with imitation products.
Step 1 Step 2
Three product types
Different form
Different form, and function,
Same form same function same objective
High degree of legal

and resource protection
High
g Difficult to imitate
pricin
-level
Upper
Some degree of legal
and resource protection
Price
Mid-level pricing
Relatively easy to imitate
Lower-le Low degree of legal and

vel pricin
g resource protection
Low
Easy to imitate
Size of circle indicates the relative market volume of alternatives

Price corridor of the mass
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The business model guide
The questions “What is the cost target?” and “Who can we partner with?” are closely related. That’s because a company’s
cost target will influence how it obtains the capabilities it needs, and the capabilities it needs will affect its ability to change
its cost structure. Once costs and capabilities are optimized toward the cost target, which is driven by the strategic price, the
company should challenge the industry’s standard pricing model to reach more customers and increase profitability.
What is the cost target? Who can we partner with?

• Is your cost target set by the strategic price? • What capabilities do you need to achieve the
value proposition, and which ones do you lack?
• Can the product’s raw materials be replaced by
unconventional, less expensive ones? • Which companies have those missing capabilities?
• Did you significantly eliminate, reduce, and • Based on cost, quality, and speed, should you
outsource high-cost, low-value-added activities acquire those companies or partner with them?
in your value chain?
• Can you reduce costs by digitizing assets or
activities?
Which price model should we use?

• Is your industry’s pricing model a barrier to your
business idea’s success?
• What pricing model—direct selling, leasing,
time-share, slice-share, or equity payment—
would create a greater profit pool?
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CHARTING YOUR COMPANY’S FUTURE
The strategy canvas of the short-haul airline industry

The strategic profile of Southwest Airlines differs dramatically from those of its
competitors in the short-haul airline industry. Note how Southwest’s profile has
more in common with the car’s than with the profile of other airlines.
High
Other
airlines
Offerings
Southwest Car
Low
Meals Seating Friendly Frequent
Price Lounges choices Hub service Speed departures
connectivity
Factors of competition
Southwest Airline’s profile is a perfect example of a good strategy,

because it shows the three complementary qualities that character-
ize an effective strategy: focus, divergence, and a compelling tag
line. If your company’s strategic profile does not clearly reveal those
qualities, your strategy will likely be muddled, undifferentiated, and
hard to communicate.
Focus
Every great strategy has focus, and a company’s strategic profile, or
value curve, should clearly show it. Looking at Southwest’s profile,
for example, you can see at once that the company emphasizes just
three factors: friendly service, speed, and frequent point-to-point
departures. By focusing in this way, Southwest has been able to
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KIM AND MAUBORGNE
The strategy canvas of corporate foreign exchange

When EFS executives compared the strategic profiles of the main players in the
traditional corporate foreign exchange business, they discovered some alarm-
ing similarities. In fact, EFS and its nonbank competitors actually shared the
same profile. The profile of commercial banks, the other providers of corporate
foreign exchange services, also resembled the EFS profile in many respects.
Off -line
High
EFS and
nonbank
competitors
Offerings
Banks
Low
Price Corporate Speed Ease of use Knowledge
Risk dealers Flexible Relationship Responsiveness
management payment management
consultancy terms
Fortunately, we’ve found that asking executives to draw the value

curve of their company’s strategy brings forcefully home the need
for change. It serves as a wake-up call. That was certainly the ex-
perience at EFS, which had been struggling for a long time with an
ill-defined and poorly communicated strategy. The company was
also deeply divided: The top executives of EFS’s regional subsidiar-
ies bitterly resented what they saw as the arrogance of the corpo-
rate executives. That conflict made it all the more difficult for EFS
to come to grips with its strategic problems; before executives can
chart a new strategy, they must reach a common understanding of
the company’s current position.
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In this strategy canvas, EFS executives compared their company’s on-line

strategy with that of Clearskies and other competitors. Note how focused and
unique Clearskies’ profile is, while EFS’s is virtually identical to that of the other
on-line foreign exchange service providers.
On-line
High
EFS on-line
Offerings
Other on-line
competitors
Clearskies
Low
Electronic Customer Speed Accuracy
Price data Real-time support Web site Ease of use Security
interchange rates attractiveness
EFS began the strategy process by bringing together more than

20 senior managers from subsidiaries in Europe, North America,
Asia, and Australia and splitting them into two teams. One team
was responsible for producing a value curve depicting EFS’s current
strategic profile in its traditional corporate foreign exchange busi-
ness relative to its competitors. The other team was charged with
the same task for EFS’s emerging on-line foreign exchange business.
They were given just 90 minutes because if EFS had a clear strategy,
it would surely emerge quickly.
It turned out to be a painful experience. Both teams had heated
debates about what constituted a competitive factor and what the
factors were. Different factors were important, it seemed, in different
regions and even for different customer segments. For example, Eu-
ropeans argued that in its traditional business, EFS had to offer con-
sulting services on risk management, given the perceived risk-averse
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EFS: Before and after

This picture was the final result of EFS’s strategy creation process. Since then,
investment decisions have been made on the basis of how they will enable the
company to shift from the old curve to the new one. The “before” curve has
been revised to combine the on-line and off-line businesses, and a number
of nonessential factors were removed from consideration in the process. The
“after” strategy changes the industry’s overall strategic profile by eliminating
relationship management and adding confirmation and tracking services.
High
After
Offerings
Before
Low
Relationship Corporate Security Speed Confirmation
Price manage- Account dealers Ease Accuracy Market Tracking
ment executives of use commentary
which would allow customers to input data directly instead of hav-

ing to send a fax to EFS. This action would also free up corporate
dealers’ time, a large portion of which had been spent completing
paperwork and correcting errors. Even though their numbers were
reduced, corporate dealers would now be able to provide richer mar-
ket commentary, a key success factor. Using the Internet, EFS would
send automatic confirmations to all customers. And it would offer a
payment-tracking service, just as FedEx and UPS do for parcels. The
foreign exchange industry had never offered these services before.
The new value curve exhibited the criteria of a successful strategy.
It displayed more focus than the previous strategy—investments
that were made were given a much stronger commitment than
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Bratton in action
The New York Police Department was not Bill Bratton’s first turnaround. The table describes his biggest challenges and achieve-
ments during his 20 years as a policy reformer.
Massachusetts Bay Boston

Boston Police Transit Authority Metropolitan Police New York Transit Police New York Police
Domain District 4 (MBTA) (“The Mets”) (NYTP) Department (NYPD)
Years 1977–1982 1983–1986 1986–1990 1990–1992 1994–1996
Position Sergeant, lieutenant Superintendent Superintendent Chief of police Commissioner
Setting Assaults, drug deal- Subway crime had The Mets lacked Crime had risen 25% per year in The middle class was fleeing
ing, prostitution, been on the rise for modern equipment, the past three years—twice the to the suburbs in search of a
public drinking, and the past five years. procedures, and overall rate for the city. better quality of life.
graffiti were endemic discipline.
to the area. The media dubbed Subway use by the public had There was public despair in
the Boston subway Physical facilities declined sharply; polls indicat- the face of the high crime
The Boston public the Terror Train. were crumbling. ed that New Yorkers considered rate. Crime was seen as
shied away from the subway the most dangerous part of a breakdown of
attending baseball The Boston Globe Accountability, dis- place in the city. social norms.
games and other published a series cipline, and morale
events and from on police incompe- were low in the There were 170,000 fare evad- The budget for policing was
shopping in the Fen- tence in the MBTA. 600-person Mets ers per day, costing the city $80 shrinking. The NYPD budget
way neighborhood workforce. million annually. (aside from personnel) was
for fear of being being cut by 35%.
Aggressive panhandling and
robbed or attacked vandalism were endemic. More The staff was demoralized
or having their cars than 5,000 people were living and relatively underpaid.
stolen. in the subway system.
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Massachusetts Bay Boston

Boston Police Transit Authority Metropolitan Police New York Transit Police New York Police
Domain District 4 (MBTA) (“The Mets”) (NYTP) Department (NYPD)
Results Crime throughout Crime on the MBTA Employee morale In two years, Bratton reduced Overall crime fell by 17%.
the Fenway area decreased by 27%; rose as Bratton felony crime by 22%, with rob-
was dramatically arrests rose to 1,600 instilled account- beries down by 40%. Felony crime fell by 39%.
reduced. per year from 600. ability, protocol, Murders fell by 50%.
and pride. Increased confidence in the
Tourists, residents, The MBTA police subway led to increased Theft fell by 35% (robberies
and investment met more than 800 In three years, the ridership. were down by one-third,
returned as an entire standards of excel- Metropolitan Police burglaries by one-quarter).
area of the city lence to be accred- changed from a dis- Fare evasion was cut in half.
rebounded. ited by the National pirited, do-nothing, Equipment acquired during his There were 200,000 fewer
Commission on reactive organiza- tenure: a state-of-the-art com- victims a year than in 1990.
Accreditation for Po- tion with a poor munication system, advanced By the end of Bratton’s
lice Agencies. It was self-image and an handguns for officers, and new tenure, the NYPD had a 73%
only the 13th police even worse public patrol cars (the number of cars positive rating, up from 37%
department in the image to a very doubled). four years earlier.
country to meet this proud, proactive
standard. department.
TIPPING POINT LEADERSHIP

Equipment acquired Equipment acquired
during his tenure: during his tenure:
55 new midsize cars, 100 new vehicles,
new uniforms, and a helicopter, and
new logos. a state-of-the-art
radio system.
Ridership began to
grow.
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TIPPING POINT LEADERSHIP
Tipping point leadership at a glance

Leaders like Bill Bratton use a four-step process to bring about rapid,
dramatic, and lasting change with limited resources. The cognitive and
resource hurdles shown here represent the obstacles that organizations
face in reorienting and formulating strategy. The motivational and political
hurdles prevent a strategy’s rapid execution. Tipping all four hurdles leads
to rapid strategy reorientation and execution. Overcoming these hurdles is,
of course, a continuous process because the innovation of today soon
becomes the conventional norm of tomorrow.
Cognitive hurdle
Put managers face-to-
face with problems and
customers. Find new
Resource hurdle ways to communicate. Political hurdle
Focus on the hot spots Identify and silence
and bargain with internal opponents;
partner organizations. isolate external ones.
Motivational hurdle
Put the stage lights on
and frame the challenge
to match the organiza-
Rapid strategy tion’s various levels.
reorientation
Rapid strategy
execution
forward to let the general manager feel how little legroom a six-foot
cop would have, then drove him over every pothole he could find.
Bratton also put on his belt, cuffs, and gun for the trip so the gen-
eral manager could see how little space there was for the tools of
the officer’s trade. After just two hours, the general manager wanted
out. He said he didn’t know how Bratton could stand being in such a
cramped car for so long on his own—let alone if there were a crimi-
nal in the backseat. Bratton got the larger cars he wanted.
Bratton reinforces direct experiences by insisting that his officers
meet the communities they are protecting. The feedback is often re-
vealing. In the late 1970s, Boston’s Police District 4, which included
Symphony Hall, the Christian Science Mother Church, and other
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KIM AND MAUBORGNE
The strategy canvas of transit:

How Bratton refocused resources
In comparing strategies across companies, we like to use a tool we call the
strategy canvas, which highlights differences in strategies and resource alloca-
tion. The strategy canvas shown here compares the strategy and allocation of
resources of the New York Transit Police before and after Bill Bratton’s appoint-
ment as chief. The vertical axis shows the relative level of resource allocation.
The horizontal axis shows the various elements of strategy in which the invest-
ments were made. Although a dramatic shift in resource allocation occurred
and performance rose dramatically, overall investment of resources remained
more or less constant. Bratton did this by de-emphasizing or virtually eliminat-
ing some traditional features of transit police work while increasing emphasis
on others or creating new ones. For example, he was able to reduce the time
police officers spent processing suspects by introducing mobile processing
centers known as “bust buses.”
Low Relative level of investment High
After
Bratton’s
appointment
Before Bratton’s
appointment
Elements of strategy
Widespread Arrests Arrests Focus on Use of
patrols of warrant quality-of- “bust buses”
of subway violators life crimes for processing
system in daytime arrests
Involvement Issuance of Group Arrests of Train sweeps

of officers desk appearance arrests warrant for safe
in processing tickets (which violators atmosphere
arrests violators had during
routinely ignored) sleeping
hours
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KIM AND MAUBORGNE
A snapshot of blue ocean creation

This table identifies the strategic elements that were common to blue ocean
creations in three different industries in different eras. It is not intended to
be comprehensive in coverage or exhaustive in content. We chose to show
American industries because they represented the largest and least-regulated
market during our study period. The pattern of blue ocean creations exempli-
fied by these three industries is consistent with what we observed in the other
industries in our study.
Was the blue Was it driven At the time of

ocean created by technology the blue ocean
by a new pioneering creation, was the
Key blue ocean entrant or an or value industry attractive
creations incumbent? pioneering? or unattractive?
Automobiles
Ford Model T New entrant Value pioneer- Unattractive
ing* (mostly
Unveiled in 1908, the
existing tech-
Model T was the first
nologies)
mass-produced car, priced
so that many Americans
could afford it.
GM’s “car for every purse Incumbent Value pioneer- Attractive
and purpose” ing (some new
technologies)
GM created a blue ocean
in 1924 by injecting fun and
fashion into the car.
Japanese fuel-efficient Incumbent Value pioneer- Unattractive
autos ing (some new
technologies)
Japanese automakers
created a blue ocean in
the mid-1970s with small,
reliable lines of cars.
Chrysler minivan Incumbent Value pioneering Unattractive
(mostly existing
With its 1984 minivan, technologies)
Chrysler created a new
class of automobile that
was as easy to use as a
car but had the passenger
space of a van.
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BLUE OCEAN STRATEGY

Computers
CTR’s tabulating machine Incumbent Value pioneer- Unattractive
ing (some new
In 1914, CTR created
technologies)
the business machine
industry by simplifying,
modularizing, and leasing
tabulating machines. CTR
later changed its name
to IBM.
IBM 650 electronic com- Incumbent Value pioneering Nonexistent
puter and System/360 (650: mostly ex-
isting technolo-
In 1952, IBM created
gies)
the business computer
industry by simplifying and Value and
reducing the power and technol-
price of existing technology pioneering
ogy. And it exploded the (System/360:
blue ocean created by the new and existing
650 when in 1964 it un- technologies)
veiled the System/360, the
first modularized computer
system.
Apple personal New entrant Value pioneering Unattractive
computer (mostly existing
Although it was not the technologies)
first home computer, the
all-in-one, simple-to-use
Apple II was a blue ocean
creation when it appeared
in 1978.
Compaq PC servers Incumbent Value pioneering Nonexistent
Compaq created a blue (mostly existing
ocean in 1992 with its technologies)
ProSignia server, which
gave buyers twice the file
and print capability of the
minicomputer at one-third
the price.
(continued)
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KIM AND MAUBORGNE

Dell built-to-order New entrant Value pioneering Unattractive
computers (mostly existing
In the mid-1990s, Dell technologies)
created a blue ocean in a
highly competitive industry
by creating a new purchase
and delivery experience for
buyers.
Movie theaters
Nickelodeon New entrant Value pioneering Nonexistent
The first Nickelodeon (mostly existing
opened its doors in 1905, technologies)
showing short films
around-the-clock to
working-class audiences
for five cents.
Palace theaters Incumbent Value pioneering Attractive
(mostly existing
Created by Roxy Rothapfel
technologies)
in 1914, these theaters pro-
vided an operalike environ-
ment for cinema viewing at
an affordable price.
AMC multiplex Incumbent Value pioneering Unattractive
(mostly existing
In the 1960s, the number
technologies)
of multiplexes in America’s
suburban shopping malls
mushroomed. The multi-
plex gave viewers greater
choice while reducing
owners’ costs.
AMC megaplex Incumbent Value pioneering Unattractive
Megaplexes, introduced in (mostly existing
1995, offered every current technologies)
blockbuster and provided
spectacular viewing ex-
periences in theater com-
plexes as big as stadiums,
at a lower cost to theater
owners.
*Driven by value pioneering does not mean that technologies were not involved. Rather, it
means that the defining technologies used had largely been in existence, whether in that
industry or elsewhere.
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KIM AND MAUBORGNE
Red ocean versus blue ocean strategy

The imperatives for red ocean and blue ocean strategies are starkly different.
Red ocean strategy Blue ocean strategy

Compete in existing market space. Create uncontested market space.
Beat the competition. Make the competition irrelevant.
Exploit existing demand. Create and capture new demand.
Make the value/cost trade-off. Break the value/cost trade-off.
Align the whole system of a company’s Align the whole system of a company’s
activities with its strategic choice of dif- activities in pursuit of differentiation and
ferentiation or low cost. low cost.
shell out not only for the animals but also for their training, medical
care, housing, insurance, and transportation. Yet Cirque found that
the appetite for animal shows was rapidly diminishing because of
rising public concern about the treatment of circus animals and the
ethics of exhibiting them.
Similarly, although traditional circuses promoted their perform-
ers as stars, Cirque realized that the public no longer thought of cir-
cus artists as stars, at least not in the movie star sense. Cirque did
away with traditional three-ring shows, too. Not only did these cre-
ate confusion among spectators forced to switch their attention from
one ring to another, they also increased the number of performers
needed, with obvious cost implications. And while aisle concession
sales appeared to be a good way to generate revenue, the high prices
discouraged parents from making purchases and made them feel
they were being taken for a ride.
Cirque found that the lasting allure of the traditional circus came
down to just three factors: the clowns, the tent, and the classic ac-
robatic acts. So Cirque kept the clowns, while shifting their humor
away from slapstick to a more enchanting, sophisticated style. It
glamorized the tent, which many circuses had abandoned in favor
of rented venues. Realizing that the tent, more than anything else,
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BLUE OCEAN STRATEGY
The simultaneous pursuit of differentiation and low cost

A blue ocean is created in the region where a company’s actions favorably
affect both its cost structure and its value proposition to buyers. Cost savings
are made from eliminating and reducing the factors an industry competes on.
Buyer value is lifted by raising and creating elements the industry has never
offered. Over time, costs are reduced further as scale economies kick in, due
to the high sales volumes that superior value generates.
Costs
Blue
ocean
Buyer value
in purchasing that Wal-Mart enjoys, for example, have significantly

discouraged other companies from imitating its business model. The
immediate attraction of large numbers of customers can also create
network externalities. The more customers eBay has online, the
more attractive the auction site becomes for both sellers and buyers
of wares, giving users few incentives to go elsewhere.
When imitation requires companies to make changes to their
whole system of activities, organizational politics may impede a
would-be competitor’s ability to switch to the divergent business
model of a blue ocean strategy. For instance, airlines trying to fol-
low Southwest’s example of offering the speed of air travel with the
flexibility and cost of driving would have faced major revisions in
routing, training, marketing, and pricing, not to mention culture.
Few established airlines had the flexibility to make such extensive
organizational and operating changes overnight. Imitating a whole-
system approach is not an easy feat.
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KIM AND MAUBORGNE
Choosing the right strategic approach
A structuralist approach is a good A reconstructionist approach is a

fit when: good fit when:
• Structural conditions are attrac- • Structural conditions are attractive

tive and the organization has the but players are well-entrenched and
resources and capabilities to build a the organization lacks the resources or
distinctive position capabilities to outperform them
• Structural conditions are less than • Structural conditions are unattractive

attractive but the organization has and they work against an organiza-
the resources and capabilities to tion irrespective of its resources and
outperform competitors capabilities
• The organization has a bias toward • The organization has an orientation

defending current strategic positions toward innovation and a willingness to
and a reluctance to venture into unfa- pursue new opportunities
miliar territory
When structural conditions and resources and capabilities do not distinctively indicate
one approach or the other, the right choice will turn on the organization’s strategic
mind-set.
When structural conditions and resources and capabilities do not

distinctively indicate one approach or the other, the right choice will
depend on the organization’s strategic mind-set. An organization
with an innovative bent and sensitivity to the risks of missing future
opportunities will be more successful in adopting a reconstruction-
ist approach. Firms with a bias toward defending current strate-
gic positions and a reluctance to venture outside familiar territory
would do better with a structuralist approach.
The Three Strategy Propositions

Whichever approach is chosen, a strategy’s success hinges on the
development and alignment of three propositions: (1) a value prop-
osition that attracts buyers; (2) a profit proposition that enables
the company to make money out of the value proposition; and (3)
a people proposition that motivates those working for or with the
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KIM AND MAUBORGNE
is targeted at low cost. Under a reconstructionist strategy approach,

high performance is achieved when all three strategy propositions
pursue both differentiation and low cost. This alignment in sup-
port of differentiation and low cost enables a company to open new
market space by breaking the existing value-cost trade-off. It allows
strategy to shape structure. It is also alignment that leads to more
sustainable strategy, for either approach. While one or two strat-
egy propositions can be imitated, imitating all three, especially the
people proposition, is difficult (see the exhibit, “Achieving strategy
alignment”).
It is the responsibility of an organization’s top executives to
make sure that each proposition is fully developed and all three are
Achieving strategy alignment
Structuralist
Value proposition approach
The utility buyers receive The alignment of the
from an offering minus the three strategy proposi-
price they pay for it. tions in pursuit of
EITHER differentiation
or low cost.
Profit proposition
The revenues an organization
generates from an offering
minus the cost to produce
and deliver it.
People proposition Reconstructionist

The positive motivations approach
and incentives put in The alignment of the
place for people needed three strategy proposi-
to support and implement tions in pursuit of BOTH
the strategy. differentiation
and low cost.
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HOW STRATEGY SHAPES STRUCTURE
Dubai Strategy Propositions

THE STRATEGY CANVAS IS AN analytical framework we developed in our
research on blue ocean strategy, which can be used to express an organiza-
tion’s three strategy propositions. The horizontal axis captures the range of
factors organizations offer. The vertical axis depicts the offering level. The
strategic profile is a graphic depiction of an organization’s relative perfor-
mance across these key factors. Here we present the strategic profiles for
Dubai’s three strategy propositions versus those of other emerging markets
and Arab economies.
Dubai’s value proposition

Shanghai was used as a strategic reference to show how Dubai’s value proposi-
tion has been compelling to foreign investors despite its much smaller domes-
tic market size.
High
Offering level
Dubai
Shanghai
Low
s
ize
cy
ip
fre pt nd
rie
ne
tie
ion
tu
fo d pr %
rsh
ien
ign ofits
on le
in ce t a
ts
se
ar
zo
du
0% an 00
t
e z ab
ula
ne
es
ke
m ac en
c
b
ss
e
ffi
t
10 ital ate 1
ge
ar
or
re
ow
r
g
ine
se
ste lly pa
re
m
nf
xp
ua
sy na ns
tic
us
p i
of
tic
ca atr
-e
xi
ng
al tio ra
gis
fb
re
ta
re
y
es
La
of rep
nc
ici rna T
yo
Lo
te
m
nd
re
Do
a
to
xit
a
pa
or
rt
m
ple
rp
ns
po
do
Co
jud te
Im
Tr
ee
Co
i n
Fr
(continued)
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KIM AND MAUBORGNE
Dubai Strategy Propositions

Dubai’s profit proposition
Oil-based Arab economies were used as the strategic reference, as these
economies are most comparable in terms of their geo-political, social, and
government revenue-generating mechanisms.
High
Dubai
Offering level
Oil-based
Arab economies
Low
ve on
co e
ua or
at ed
os
ad tiv
lq nf
e
st
lity
er as
s
re ce
yc
ion
he ra
nu
ba tio
op l-b
oil en
er ist
ilit
glo puta
ss -oi
ile nd
ov min
ab
ine Non
lat pe
l li
Re
d
vo de
cia
da
So
y
an
av
s
ry
He
bu
lita
Mi
The profit proposition

How does Dubai generate revenues to support the state, given that
corporate and personal taxes are negligible? It has done so by find-
ing differentiated ways of generating revenues while also lowering
its cost structure. Unlike other Arab governments, Dubai’s has been
run like a large business enterprise. Its ruler, Sheikh Mohammed bin
Rashid al-Maktoum, is frequently quoted as saying, “What’s good
for business is good for Dubai.” Instead of exploiting conventional
income channels such as corporate and personal taxes, which would
discourage foreign investors, the government has invested in the
infrastructure that supports the investors’ activities—shipping and
port services, transport, tourism, aviation, real estate development,
export commerce, and telecommunications. These investments
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HOW STRATEGY SHAPES STRUCTURE
Dubai’s people proposition for citizens

Dubai’s past was used as a strategic reference to depict how Dubai’s new
strategy has made a difference to citizens.
High
Now
Offering level
Then
Low
rty
mu tion
nit -
ity
ee
me s
tu ey
on lue
itio
nt
ur
y
ies
nt
ve
or on
nit
om la
vir va
gn
ra
ec
po
l c iso
pp m
ua
en nal
co
ls
of
g o and
bg
na al
cia
l re
tan itio
ns
r
tio tu
So
Jo
na
kin g
itio
oli ad
l
n
na u
tio
ma arni
er l/c
op tr
nd
na
sm en
int cia
Co
Le
er
co twe
So
Int
d a be
an ce
m
lan
fro
Ba
have allowed the government to directly profit from its unique, low-
cost value proposition.
One example is DP World, 80% owned by the government
through Dubai World. DP World operates the Jebel Ali port and com-
plex in Dubai, where more than 6,000 companies are based. Another
is Nakheel, wholly owned by Dubai and now one of the world’s big-
gest real estate developers. Nakheel is slated to develop half of all
residential construction projects in the emirate over the next 10
years, allowing the government to profit from the housing needs
of foreign employees. And with its ownership of Emirates Airlines,
the government makes money on the high volume of business trav-
elers and cargo flowing into Dubai. In serving foreign investors, the
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11/12/16 2:23 PM 230430_09_167-186_r1.indd 174
K
ey
le
a
ac der
tiv sh
i ip
Low
High
pe Ma tie
rs ke s
on m
Average
th r o
e esp re t
sa o ha
m n n
de R e i sibl on
ta eq niti e f e
ile ue at or
Time and effort
d s i
pr t f ve
og req
re ue
on ss nt
i re a
En nitia po nd
fo t rt
rc ives s
e
r e co
bu q m
sin uir pl
es em ian
s en ce
ac ts
tiv fo
What middle managers actually do
Re itie r
de qu s
cis ire
viewed them as rule enforcers who played it safe.
io an
ns d
fro re
m vie
w
be
Sp low
se en
ni d
or ti
m me
an w
ag ith
er
Cr s
en eat
v e
fo iro a s
r l nm a
ea e fe
rn nt
in
g
st
ra Ex
te pl
gy ain
cle th
m Em ar e
ly
an p
ag ow
er er
s f r
th to s on
em tr tlin
se etc e
lve h
Co s
ac
h
pe
op
le
they think leaders spend on each. The canvas below, for middle managers at the retail company BRG, reveals that people
As- is Leadership Canvases show the activities that employees see leaders engaging in, and the amount of time and energy
Play Safe
Control and
Leadership
As-is
KIM AND MAUBORGNE

BLUE OCEAN LEADERSHIP
detail which acts and activities they believe would add real value for
them if undertaken by their current leaders.
To process the findings from the second round of interviews,
the subteams apply an analytic tool we call the Blue Ocean Leader-
ship Grid (see the exhibit by the same name). For each leadership
level the interview results get incorporated into this grid. Typically,
we start with the cold-spot acts and activities, which go into the
Eliminate or Reduce quadrants depending on how negatively inter-
viewees judge them. This energizes the subteams right away, be-
cause people immediately perceive the benefits of stopping leaders
from doing things that add little or no value. Cutting back on those
activities also gives leaders the time and space they need to raise
their game. Without that breathing room, a step change in leader-
ship strength would remain largely wishful thinking, given leaders’
already full plates. From the cold spots we move to the hot spots,
The Blue Ocean Leadership Grid

The Blue Ocean Leadership Grid is an analytic tool that challenges people to
think about which acts and activities leaders should do less of because they
hold people back, and which leaders should do more of because they inspire
people to give their all. Current activities from the leaders’ “as-is” profiles
(which may add value or not), along with new activities that employees believe
would add a lot of value if leaders started doing them, are assigned to the four
categories in the grid. Organizations then use the grids to develop new profiles
of effective leadership.
Eliminate Raise
What acts and activities do What acts and activities do
leaders invest their time and leaders invest their time
intelligence in that should be and intelligence in that
eliminated? should be raised well above
their current level?
Reduce Create
What acts and activities do What acts and activities
leaders invest their time and should leaders invest their
intelligence in that should time and intelligence in
be reduced well below their that they currently don’t
current level? undertake?
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11/12/16 2:23 PM 230430_09_167-186_r1.indd 178
K
ey
le
a
ac der
tiv sh
i i
qu De tie p
s
Low
High
er fer
ie c
m s t us
an o to
ag mi me
em dd r
en le
t
Eliminate
Pr
od
Time and effort
fo u
r r ce
ep d
or at
tin a
g
To-be Leadership Canvas
Se
ek
fo ap
rd p
ec rov
isi al
on s
s
Co
m
pl
Reduce
an ete
d fo
re rm
po s
rts
Frontline managers: Serve customers, not the boss
un
de
rp
er De
fo al
Kn rm w
ow an ith
ce
ea
ch
i
pe ndiv
rs id
on ua
all l
pe C y
op oa
le ch
fo fr
Co r s on
uc tli
m ce ne
m ss
un
Raise
ica
te
in re
fo le
rm va
Cr at nt
cle ea io
a t e n
bu r a a
sin nd d n
es ta sh
s ng ar
ta ib e
rg le
et
s
Current activities of BRG’s frontline leaders vs. the activities employees think they should be doing
Ce
re le
w b
ar ra
d te
po a
re sitiv nd
su e
lts
Cl
ar
if
st y co
ra m
te p
Create
gy a
an ny
d
Please the Boss
Profile
As-is Leadership
to Serve Customers
Cut Through
To-be Leadership
KIM AND MAUBORGNE

11/12/16 2:23 PM 230430_09_167-186_r1.indd 179
K
ey
le
a
ac der
M t
pe a i s
rs ke vit hip
on m i
Low
Re th re or es
High
e
pr qu e s spo th
og es am n an
re t fr e sib o
ss eq in le ne
re ue itiat for
po nt iv
rts an e
on d d
En Time and effort
Eliminate
fo in eta
itia il
rc
e tiv ed
fo co es
rb m
pl
i
us a
in nc
es
s e
ac w
ith
tiv
fo i tie
rd s
ec
isi
on
s
fro
m
Middle managers: More coaching, less control
be
lo
Sp w
Reduce
se en
ni d
or ti
Cr m me
ea an w
te ag ith
a er
s
sa
fe
en
fo irov
r l nm
ea e
Ex rn nt
in
pl
ain g
th
e
st
ra
cle teg
m Em ar y
an p ly
ag ow
er er
s f
th to s ron
em tr tlin
Raise
se etc e
lve h
s
Co
ac
h
pe
op
Se le
Current activities of BRG’s midlevel leaders vs. the activities employees think they should be doing
tp
go er
als for
to ma
ge nc
Sh th e
ar er
e
be
ac t p s
ro ra
ss ct
te ice
am s
s
Create
w
ith Ali
pe gn
rfo rew
rm ar
an ds
ce
Play Safe
Control and
Profile
Leadership
As-is
and Empower
Liberate, Coach,
Profile
Leadership
To-be

11/12/16 2:23 PM 230430_09_167-186_r1.indd 181
K
ey
le
a
ac der
En t
w fo iv sh
ay r it
s ce ie p
i
of e s
Low
d s
High
o ta
So ing blis
lve th he
op ings d
er
M at
io
on
Eliminate
i na
m tor l
Time and effort
id a
dl nd
e
m co
an or
ag di
De n
al init em ate
w iat en
m ith
at i v e t
te ad s
rs m
an ini
op C d str
an at
er o iv
at nd e-m swe e
io u
na ct ails r
l im m
Reduce
pr eet
ov ing
em s
fo
De ent r
al s
pe w
rfo ith
Senior managers: From the day-to-day to the big picture
rm po
an or
Co ce
ac
h
a
di nd
re m
ct ot
w co C re iva
ha m o p t
t i pa mm orts e
tm n u
y
ea ’s nic
ns vis at
Cr to ion e th
ea pe an e
te op d
a le
co
Raise
m
pe
Ex llin
pl
ain g
st
th ra
e te
st gy
ra
te
gy
cle
A ar
ly
an naly
Current activities of BRG’s senior managers vs. the activities employees think they should be doing
d ze
th f
fo ir tue u
r t im re
As-is
he pl tr
Profile
co ica end
m tio s
De pa ns
ve ny
Leadership
lo
Day-to-Day
p
Focus on the
an
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Idea in Practice: Focus On What The Majority of Your Buyers Value

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Idea in Practice: Focus On What The Majority of Your Buyers Value

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Copyright:

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KIM AND MAUBORGNE

How Kinepolis achieves proﬁtable growth

Go for a quantum leap Go for the mass of Think beyond

Industry’s conditions Think in terms of the total

Company’s Perspective Customers’ Perspective

Low cost Competitive Radically superior

High Expanded Quantum leap

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Two strategic logics

Industry Industry’s conditions are given. Industry’s conditions can be

Strategic A company should build competitive Competition is not the

Product and An industry’s traditional boundaries A value innovator thinks in

230430_01_1-22_r3.indd 6 11/12/16 2:21 PM

Formule 1’s value curve

hotel’s value curve

Formule 1’s value curve

mass of buyers. Instead of competing on customers’ differences, SAP

230430_01_1-22_r3.indd 13 11/12/16 2:21 PM

How has Compaq stayed on top of the server industry?

By following its ﬁrst value innovation . . .

. . . and then another.

1994: ProLiant 1000

General Performance Reliability Manageability Serviceability

230430_01_1-22_r3.indd 18 11/12/16 2:21 PM

Testing the growth potential of a portfolio of businesses

Current portfolio Planned portfolio

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Two complementary paths to performance

Distributive justice Procedural justice

Traditional tools Fair process

Outcome satisfaction Trust and commitment

230430_02_23-44_r1.indd 41 11/12/16 2:21 PM

Creating a new value curve

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What factors should be raised well beyond the industry standard?

Quicken’s value curve

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Bloomberg’s value curve at its debut

High On-line ﬁnancial information industry

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Value innovation in book retailing

sure of reading and intellectual exploration. In less than six years,

230430_03_45-70_r1.indd 61 11/12/16 2:21 PM

Is the Body Shop a cosmetics company?

The Body Shop

230430_03_45-70_r1.indd 64 11/12/16 2:21 PM

Shifting the focus of strategy

Industry Focuses on rivals within Looks across substitute

Strategic group Focuses on competitive Looks across strategic

Buyer group Focuses on better Redeﬁnes the buyer group

Scope of product Focuses on maximizing Looks across to com-

Functional- Focuses on improving Rethinks the functional-

Time Focuses on adapting to Participates in shaping

talking about predicting the future, which is inherently impossible.

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The buyer utility map

The six stages of the buyer experience cycle

do their thing faster, better, or in different ways. The financial infor-

230430_04_71-92_r1.indd 76 11/12/16 2:21 PM

Uncovering the buyer experience cycle

KNOWING A WINNING BUSINESS IDEA WHEN YOU SEE ONE

The six stages of the buyer experience cycle

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