MKTG408 New Products Development & Value Proposition Design Paper THESE ARE THE TWO BOOK WE USED IN OUR CLASS ( Value Proposition Design, Alex Osterwalder

MKTG408 New Products Development & Value Proposition Design Paper THESE ARE THE TWO BOOK WE USED IN OUR CLASS ( Value Proposition Design, Alex Osterwalder <<- I UPLOADED A PDF COPY FOR THIS BOOK HERE & Competing Against Luck) AND PLEASE DON'T USE ANY OTHER SOURCES IN THE WRITING. Your answer is worth 100 points. The rubric for it is as follows: - Thoroughness of coverage of concepts covered in the course: 25% - Accuracy of understanding of concepts as expressed: 25% - Logical flow of answer: 25% - Grammar, spelling and effective use of language to explain your position: 25% ______________________________________________________ You have been hired to manage the new product development process at a major consumer products company.The vice president of research and development comes up to you in the company cafeteria one day.She says this to you: “The other night my friends and I were having a few beers and came up with a new product idea for a solar-powered electric toothbrush. We did some sketches of how it might look and came to the conclusion that it could be manufactured by us at a reasonable cost. Moreover, we probably could get a patent on it. What do you think of the idea? Should we bring it out?” Based on all you have learned this semester about the new product development process, how would you go about answering her questions? Value Proposition Design Cover image: Pilot Interactive Cover design: Alan Smith and Trish Papadakos This book is printed on acid-free paper. ? Copyright © 2014 by Alexander Osterwalder, Yves Pigneur, Alan Smith, Greg Bernarda, and Patricia Papadakos. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. 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Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. ISBN 978-1-118-96805-5 (paper); ISBN 978-1-118-96807-9 (ebk); ISBN 978-1-118-96806-2 (ebk); ISBN 978-1-118-97310-3 (ebk) Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 How to create products and services customers want. Get started with… Value Proposition Design strategyzer.com/vpd Written by Alex Osterwalder Yves Pigneur Greg Bernarda Alan Smith Designed by Trish Papadakos 1. Canvas 2. Design 1.1 Customer Pro?le 10 1.2 Value Map 26 1.3 Fit 40 2.1 Prototyping Possibilities 74 2.2 Starting Points 86 2.3 Understanding Customers 104 2.4 Making Choices 120 2.5 Finding the Right Business Model 142 2.6 Designing in Established Organizations 158 TION RVA OBSE TO G TIN TES ENT ESSM ASS UE 7Q NS STIO M FROING T TES TS POIN TING STAR G YPIN TOT PRO L ESS DE MO SIN BU ED FAIL 3. Test 4. Evolve 3.1 What to Test 188 3.2 Testing Step-by-Step 196 3.3 Experiment Library 214 3.4 Bringing It All Together 238 Create Alignment 260 Measure & Monitor 262 Improve Relentlessly 264 Reinvent Yourself Constantly 266 Taobao: Reinventing (E-)Commerce 268 SU CC ES S Glossary 276 Core Team 278 Prereaders 279 Bios 280 Index 282 G HYPO THES IS D You’ll love Value Proposition Design if you’ve been… H, BLA L AH BL A H STRATEGYZER.COM / VPD / INTRO VI BL AH … LAH BL BLAH BL AH Overwhelmed by the task of true value creation Frustrated by unproductive meetings and misaligned teams Sometimes you feel like… You have experienced teams that… ?? There should be better tools available to help you create value ?? Lacked a shared language and a shared understanding of for your customers and your business. ?? You might be pursuing the wrong tasks and you feel insecure about the next steps. customer value creation. ?? Got bogged down by unproductive meetings with tons of unstructured “blah blah blah” conversations. ?? It’s dif?cult to learn what customers really want. ?? Worked without clear processes and tools. ?? The information and data you get from (potential) customers is ?? Were focused mainly on technologies, products, and features overwhelming and you don’t know how to best organize it. ?? It’s challenging to go beyond products and features toward a deep understanding of customer value creation. ?? You lack the big picture of how all the puzzle pieces ?t together. rather than customers. ?? Conducted meetings that drained energy and ended without a clear outcome. ?? Were misaligned. STRATEGYZER.COM / VPD / INTRO VII Involved in bold shiny projects that blew up You have seen projects that… ?? Were big bold bets that failed and wasted a lot money. ?? Put energy into polishing and re?ning a business plan until it Disappointed by the failure of a good idea. perpetuated the illusion that it could actually work. ?? Spent a lot of time building detailed spreadsheets that were completely made up and turned out to be wrong. ?? Spent more time developing and debating ideas rather than testing them with customers and stakeholders. ?? Let opinions dominate over facts from the ?eld. ?? Lacked clear processes and tools to minimize risk. ?? Used processes suited for running a business rather than ones for developing new ideas. Get “From Failure to Success” poster Value Proposition Design will help you successfully… STRATEGYZER.COM / VPD / INTRO VIII Leverage the experience and skills of your team Equip your team with a shared language to overcome “blah blah Understand the patterns of value creation blah,” conduct more strategic conversations, run creative exercises, and get aligned. This will lead to more enjoyable meetings that are full of energy and produce actionable outcomes beyond Organize information about what customers want in a simple a focus on technology, products, and features toward creating way that makes the patterns of value creation easily visible. As value for your customers and your business. a result, you will more effectively design value propositions and pro?table business models that directly target your customers’ most pressing and important jobs, pains, and gains. Gain clarity. Get your team aligned. Avoid wasting time with ideas that won’t work Design, test, and deliver what customers want. Relentlessly test the most important hypotheses underlying your business ideas in order to reduce the risk of failure. This will allow you to pursue big bold ideas without having to break the bank. Your processes to shape new ideas will be ?t for the task and complement your existing processes that help you run your business. Minimize the risk of a ?op. Get “From Failure to Success” poster STRATEGYZER.COM / VPD / INTRO IX Our Value Proposition to You STRATEGYZER.COM / VPD / INTRO X The links you see on the side of every page point to resources in the online companion. Watch for the Strategyzer logo and follow the link to online exercises, tools/templates, posters, and more. How to create products and services customers want. Get started with… Value Proposition Design gn strategyzer.com/vpd Written by Alex Osterwalder Yves Pigneur Greg Bernarda Alan Smith Designed by Trish Papadakos Series Sequel to Business Model Generation International Bestseller 30+ Languages VPD Book + VPD Online Companion 2 Note: To gain access to these exclusive online portions of Value Proposition Design, you'll need to prove you own the book. Keep the book near you to help you answer the secret questions and verify your ownership! Web App + Online Courses Go further with pro tools and courses 3 Helps create products and services people want Integrates with other business Minimizes risk methods of (big) failure Apply Helps Business Model Canvas understand Succeed! what matters to customers Helps Proven and effective shape ideas suite of business tools Access to advanced material and knowledge Engaging online multimedia content Softwaresupported Practical, visual, + methodology enjoyable format Shared language to communicate and collaborate Share with and learn from peers Enables practice + skills Brief, clear, (self-)assessment and applicable Instructions content avoids to get started confusion Learn STRATEGYZER.COM / VPD / INTRO XI Integrated with the The Tools and Process of Value Proposition Design Zoom out STRATEGYZER.COM / VPD / INTRO XII Zoom in Canvas Design / Test Tools Search The heart of Value Proposition Design is about applying Tools to the messy Search for value propositions that customers want and then keeping them aligned with what customers want in Post search. Progress Manage the messy and nonlinear process of value proposition design and reduce risk by systematically applying adequate tools and processes. Evolve Post search Design Squiggle adapted from Damien Newman, Central XIII STRATEGYZER.COM / VPD / INTRO Value Proposition Design shows you how to use the Value Proposition Canvas to Design and Test great value propositions in an iterative search for what customers want. Value proposition design is a never-ending process in which you need to Evolve your value proposition(s) constantly to keep it relevant to customers. An Integrated Suite of Tools STRATEGYZER.COM / VPD / INTRO XIV Zoom out The Value Proposition Canvas is the tool at the center of this book. It makes value propositions visible and tangible and thus easier to discuss and manage. It perfectly integrates with the Business Model Canvas and the Environment Map, two tools that are discussed in detail in Business Model Generation,* the sister book to this one. Together, they shape the foundation of a suite of business tools. The Value Proposition Canvas zooms into the details of two of the building blocks of the Business Model Canvas. Zoom in * Business Model Generation, Osterwalder and Pigneur, 2010. The Business Model Canvas helps you create value for your business. The Value Proposition Canvas helps you create value for your customer. XV STRATEGYZER.COM / VPD / INTRO The Environment Map helps you understand the context in which you create. Refresher: The Business Model Canvas STRATEGYZER.COM / VPD / INTRO XVI Embed your value proposition in a viable business model to capture value for your organization. To do so, you can use the Business Model Canvas, a tool to describe how your organization creates, delivers, and captures value. The Business Model Canvas and Value Proposition Canvas perfectly integrate, with the latter being like a plug-in to the former that allows you to zoom into the details of how you are creating value for customers. Customer Segments segment. It is how an organization are the groups of people and/or orga- captures value with a price that nizations a company or organization customers are willing to pay. aims to reach and create value for with a dedicated value proposition. Key Resources are the most important assets Value Propositions required to offer and deliver the previ- are based on a bundle of products ously described elements. and services that create value for a customer segment. Key Activities are the most important activities an Channels organization needs to perform well. describe how a value proposition is The refresher of the Business Model Canvas on this spread is suf?cient to work through this book and create great value propositions. Go to the online resources if you are interested in more or get Business Model Generation,* the sister publication to this book. communicated and delivered to a Key Partnerships customer segment through commu- shows the network of suppliers nication, distribution, and sales and partners that bring in external channels. resources and activities. Customer Relationships Cost Structure outline what type of relationship is describes all costs incurred to oper- established and maintained with ate a business model. each customer segment, and they explain how customers are acquired Pro?t and retained. is calculated by subtracting the total of all costs in the cost structure Revenue Streams result from a value proposition successfully offered to a customer * Business Model Generation, Osterwalder and Pigneur, 2010. from the total of all revenue streams. Key Partners Key Activities Key Resources Cost Structure Designed for: Designed by: Value Propositions Customer Relationships Date: Version: Customer Segments Channels Revenue Streams designed by: Business Model Foundry AG The makers of Business Model Generation and Strategyzer This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Download detailed Business Model Canvas Explanation and the Business Model Canvas pdf XVII STRATEGYZER.COM / VPD / INTRO The Business Model Canvas strategyzer.com Value Proposition Design works for… STRATEGYZER.COM / VPD / INTRO XVIII Are you creating something from scratch on your own or are you part of an existing organization? Some things will be easier and some harder depending on your strategic playground. New Ventures Individuals or teams setting out to create a great value proposition and business model from scratch A start-up entrepreneur deals with different constraints than a project leader for a new venture within an existing organization. The tools presented in this book apply to both contexts. Depending on your starting point you will execute them in a different way to leverage different strengths and overcome different obstacles. Main challenges Main opportunities ?? Produce proof that your ideas can ?? Use speedy decision making and work on a limited budget. ?? Manage involvement of investors (if you scale your ideas). ?? Risk running out of money before ?nding the right value proposition and business model. agility to your advantage. ?? Leverage the motivation of ownership as a driver for success. Unit Unit Unit C B A Established Organizations XIX setting out to improve or invent value Main challenges propositions and business models P rocess Get “Innovating in Established Organizations” poster ?? Get buy-in from top management. ?? Get access to existing resources. ?? Manage cannibalization. Main opportunities ?? Overcome risk aversion. ?? Build on existing value proposi- ?? Overcome rigid and slow tions and business models. ?? Leverage existing assets (sales, channels, brand, etc.). ?? Build portfolios of business models and value propositions. processes. ?? Produce big wins to move the needle. ?? Manage career risk of innovators. STRATEGYZER.COM / VPD / INTRO Teams within existing companies Use Value Proposition Design to… STRATEGYZER.COM / VPD / INTRO XX invent and improve value propositions. The tools we will study work for managing and renewing value propositions (and business models) just as much as for creating new ones. Put the value proposition and business model to work to create a shared language of value creation in your organization. Use them to continuously invent and improve value propositions that meet customer pro?les, which is an undertaking that never ends. Unit Unit Unit C B A P rocess Invent Invent new value propositions that people want with business models that work. STRATEGYZER.COM / VPD / INTRO XXI Improve Manage, measure, challenge, improve, and renew existing value propositions and business models. STRATEGYZER.COM / VPD / INTRO XXII Assess Your Value Proposition Design Skills Complete our online test and assess whether you have the attitude and skills required to systematically be successful at value proposition design. Take the test before and after working through Value Proposition Design to measure your progress. Take your skills test online Entrepreneurial Knowledge Tool Skills You enjoy trying out new things. You don’t see the You systematically use the Value Proposition risk of failing as a threat but an opportunity to Canvas, Business Model Canvas, and other tools learn and progress. You easily navigate between and processes in your search for great value prop- the strategic and the tactical. ositions and business models. STRATEGYZER.COM / VPD / INTRO XXIII Design Thinking Skills Customer Empathy Experimentation Skills You explore multiple alternatives before pick- You relentlessly take a customer perspective and You systematically seek evidence that supports ing and re?ning a particular direction. You are are even better at listening to customers than your ideas and tests your vision. You experiment comfortable with the nonlinear and iterative selling to them. at the earliest stages to learn what works and nature of value creation. what doesn’t. Sell Your Colleagues on Value Proposition Design concerned that we don’t have a methodology to track our progress on the development of that new value proposition and business model. STRATEGYZER.COM / VPD / INTRO XXIV worried that we focus too much on astonished at how poorly products and features instead of aligned product development, creating value for customers. sales, and marketing are surprised at how often we when it comes to developing make stuff nobody wants, new value propositions. despite our good ideas and good intentions. I am… really disappointed by how much we talked blown away by how about value propositions unclear that last amazed by how many and business models at presentation on that resources we wasted when our last meeting without new value proposi- that great idea in that last really getting tangible tion and business business plan turned out to results. model was. be a flop because we didn’t test it. concerned that our product surprised that we invest development process doesn’t so much in research and not sure if everybody in use a more customer-focused development (R&D), but fail our team has a shared methodology. to invest in developing the understanding of what a good right value propositions and value proposition actually is. business models. The Value Proposition Canvas Value Proposition Customer Segment Gain Creators Gains Products & Services Customer Job(s) Pain Relievers Pains Copyright Business Model The makers of Business Foundry AG Model Generation and Strategyzer strategyzer.com Designed by: Designed for: Date: Version: The Business Model Canvas Key Partners Key Activities Key Resources Value Propositions Customer Relationships Customer Segments Channels Revenue Streams Cost Structure designed by: Business Model Foundry AG The makers of Business Model Generation and Strategyzer strategyzer.com view a copy of this license, visit: Attribution-Share Alike 3.0 Unported License. To USA. This work is licensed under the Creative Commons Street, Suite 300, San Francisco, California, 94105, or send a letter to Creative Commons, 171 Second http://creativecommons.org/licenses/by-sa/3.0/ Get a slide deck with 10 arguments to use with the Value Proposition and Business Model Canvases XXV STRATEGYZER.COM / VPD / INTRO So, what if we tried out the Value Proposition Canvas (and Business Model Canvas) in our next project? can vas 1 The Value Proposi... Purchase answer to see full attachment