Download - Trade-off Map and Strategy for the iPhone: Should Apple Cut Down the Price of the iPhone?
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THE TRADE-OFF MAP & STRATEGY FOR THE IPHONEShould Apple Cut Down the Price of the iPhone?
Dr. Rod King
Inexpensively Leapfrogging the Competition
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ALTERNATIVES: ………………Trade-off Quotient (TQ)= Pain/Delight= Inconvenience/Fidelity= Customer Exp. Quotient
SELECTION/ACTION: ………
DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
• Personalization (Identity/Character)
• Differentiation (Social Status/Cachet)
• Quality (Content/Performance)
DELIGHT (Fidelity)
• Complexity (Time)
• Inaccessibility/Unavailability
• Cost (Price)
PAIN (Inconvenience)
TOOL
Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
MARKET (CUSTOMER MAIN DESIRED EXPERIENCE/INTENT/NEED/OBJECTIVE/JOB): …………………………………………………………………..……….
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Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP For Total Customer Experience Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
(-): PAIN
(+): DELIGHTDisruption Spot
Luxury Spot
Strategic Choice
High
Low
Low High
Zero Trade-off(“What customers ultimately want:Free, Perfect, Now”)
MARKET (CUSTOMER JOB): ………………………………….Period/Year: …………….…………………………………………..
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Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP Illustrating All StrategiesStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ Zone
Convenience Inconvenience
High-end
Low-end
Disruption Spot
SuperHit
Green Ocean
Oasis
Sweet Spot
No Man’s Land
Volcano
Luxury Spot
Red Ocean
Fidelity Belly
MARKET (CUSTOMER JOB): ………………………………….Period/Year: …………….…………………………………………..
Zero Trade-off(cf. “Wrecking-ball moment”)
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Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF STRATEGY For Luxury Spot Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Name of Business: ………………………………………………………………………………………………….… Year: ……………………
Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for Typical Product/Service inLuxury Spot
Zero Trade-off Luxury Spot
ELEMENTS OF TRADE-OFF STRATEGY FOR LUXURY SPOT-PRODUCT/SERVICE:
Trade-off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………
• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………
Customer Value PropositionHigh performance (brand) at exclusive price
Targeted Customer Segment (Interviewees)Well-to-do customers in the ‘short head’
Customer Experience/Value Proposition: …………………………………………………………………………….…………………
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Scenarios for Apple’s iPhone
Should Apple drastically cut down the price of the iPhone?
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Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP for the iPhone ExperienceStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
(“Should Apple drastically cut down the price of the iPhone?”)
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ Zone
Disruption Spot?
Luxury Spot (2009)
Zero Trade-off(cf. “Wrecking-ball moment”)
High
Low
Low High
Fidelity Belly(Super-)convenience
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2007 to Date
SuperHit? Sweet Spot?
Oasis?
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Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Customer Experience/Value Proposition: High functionality-smartphone/mobile computer (that is affordable)
TRADE-OFF STRATEGY for the iPhone (2009 & 2011) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Scenarios of the iPhone for 2009 and 2011Name of Business: Apple, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication/Computing
Mission/Vision: Platform or hub for mobile communication and information processing (computing)
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for the iPhone Experience
Zero Trade-off iPhone (2009) iPhone (2011)
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER IPHONE (2011)
Trade-Off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce Social Aura & Cachet/Identity (‘Character’)/Love- Increase Quality (Content/Perform.)/Need- Create/Procure ……………….…….……………
• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce Cost (Price)/Complexity- Increase Accessibility/Availability/Simplicity- Create/Procure ……………….…….……………
Customer Value PropositionHigh performance (brand) at lower price
Targeted Customer Segment (Interviewees)Average customers in the ‘long tail’
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Scenarios for Motorola’s RAZR
Should Motorola have drastically cut down the price of the RAZR?
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Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
TRADE-OFF MAP for the RAZR Experience(“Should Motorola have drastically cut down the price of the RAZR?”)
PAIN: Inconvenience
DELIGHT:Fidelity
‘Hit’ ZoneZero Trade-off(cf. “Wrecking-ball moment”)
High
Low
Low High
Fidelity Belly(Super-)convenience
No Man’s Land (2007)
Volcano (2004)
Luxury Spot (iPhone - 2007)
MARKET (CUSTOMER JOB): Communication/Information Processing at Work/Home/Outdoors Period/Year: 2004 to 2007
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Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Customer Experience/Value Proposition: Highly aesthetic mobile phone that is affordable
TRADE-OFF STRATEGY for the RAZR (2004 & 2007) Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal
Scenarios of the RAZR for 2002 and 2007Name of Business: Motorola, Inc. Year: 2009
Sector/Ecosystem/Industry: Communication
Mission/Vision: ……………………………..……………………………………………………………………………………….…………………
Quality (Content/ Performance)
Accessibility/Availa-bility
Cost (Price)
Social Aura/Cachet
Identity ('Character')
Simplicity
Love (Loyalty/Fun)
Need
0
5
10
Trade-Off Strategy for the RAZR Experience
Zero Trade-off RAZR (2004) RAZR (2007)
ELEMENTS OF TRADE-OFF STRATEGY FOR CHEAPER RAZR (2007)
Trade-off (Value Chain) Strategy• FIDELITY (Delight) TACTICS:- Eliminate ……………………………………………- Reduce Social Aura & Cachet/Identity (‘Character’)/Love- Increase Quality (Content/Perform.)/Need- Create/Procure ……………….…….……………• INCONVENIENCE (Pain) TACTICS:- Eliminate ……………………………………………- Reduce Cost (Price)/Complexity- Increase Accessibility/Availability/Simplicity- Create/Procure ……………….…….……………
Customer Value Proposition2004: Superslim camera-phone at high price2007: Superslim camera-phone at low priceTargeted Customer Segment (Interviewees)2004: Well-to-do customers in ‘short head’2007: Average customers in ‘long tail’
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CUSTOMER LOYALTY
Higher level criteria for assessing impacts of a
business strategy:CUTTING DOWN THE PRICE
OF THE IPHONE
CORE COMPETENCE (KNOWLEDGE)
SHAREHOLDER VALUE
BRAND EQUITY
STRATEGIIC FIT IN VALUE NETWORK ECOSYSTEM GROWTH/SUSTAINABLILITY
PROFIT (REVENUE) COMPETITIVE POSITION IN SECTOR
Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing
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WHY?
DECISION-MAKING QUESTION:
SHOULD APPLE CUT DOWN THE PRICE OF THE IPHONE?
WHEN?
HOW MUCH?
WHO?
HOW? WHAT NEXT?
WHAT? WHERE?
Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing