Creating a New Value Curve

Topics: Innovation, Company, Competition Pages: 1 (275 words) Published: November 17, 2013
The purpose of this article is to discuss what separates high-growth companies from the rest of their industry. Based on the article, the main difference between companies with high growth and other companies is in how they view the five dimensions of strategy. As indicated in the table of the article, value innovators view strategy in an entirely differ way than companies using the conventional strategic logic. Value innovation is defined as "the simultaneous pursuit of radically superior value for buyers and lower costs for companies." To promote value innovation, a company must do the following. First, identify and articulate the company's prevailing strategic logic. Second, challenge it. Third, think about the industry's assumptions, the company's strategic focus and offerings that are taken as given. Finally, reframe the company's strategic logic around value innovation, and ask the following four questions: Which of the competitive factors our industry takes for granted should be eliminated?
; Which factors should be reduced well below the industry's standard?
; Which factors should be increased well above the industry's standard?
; Which factors should be created that the industry has never offered?


Creating a New Value Curve

Value innovators create a new Value Curve defined as "a graphic depiction of a company's relative performance across its industry's key success factors." The most successful companies were those that used value innovation in all the platforms where innovation can take place including product, service and delivery. Compaq's innovations in the computer server industry are used to illustrate the idea. To avoid what Kim and Mauborgne refer to as "the trap of competing", Compaq focused on creating customer value, rather than what their competitors were doing.
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