Marketing strategies and value innovation PDF

Preview

Summary

marketing strategies details and value innovation second assignment on how to add value in market...

Description

ASSIGNMENT: STRATEGIC LOGIC OF HIGH GROWTH – SUMMER’21 In our last class on the topic of Value Innovation: The Strategic Logic of High Growth, we discussed the five basic dimensions that differentiate “conventional strategic logic” from the “logic of value innovation”, viz: Industry Assumptions Strategic Focus Customers Assets & Capabilities Product & Service Offerings

    

Q1. Briefly describe how Kinepolis went against either Industry Assumptions or Strategic Focus or both for implementing value innovation? Answer. I believe that Kinepolis went against both the Industry assumptions and strategic focus to build their own market. The followed the logic of value innovators rather than following the conventional strategic logic, instead of thinking like all the others about not making any major investments in fixed assets, Bert Claeys followed a completely different logic which was: 



Industry Assumptions: Many companies set their strategies according to the market conditions which were the conventional logic but value innovators carve out their own strategies. They invested in Megaplex with large viewing rooms and comfortable seats which will provide a better viewing experience. Strategic Focus: The conventional logic was to “focus” on beating the competitor only. They would compare their profit and loss with that of the competition. Value Innovation’s logic is to not set the competitors as benchmark and focus on providing huge value. Kinepolis was located outside the city making the average price of seat lower than the industry’s average, had more leverage with film distributors and better overall margins generating a lot of word-of-mouth praise.

Q2. Briefly describe how Accor Budget Hotels went against either Industry Assumptions or Strategic Focus or both for implementing value innovation? Answer. In the mid-1980s when the hotel industry in France was declining, instead of going along with the market the managers were asked to look beyond the current and existing rules to create value. They looked and identified into what all customers wanted, regardless of the budget, which was a good night’s sleep on a low price. Accor went against both Industry assumptions and strategic focus for implementing value innovation by doing the following: 

Industry Assumptions: The managers were forced to reflect which factors that the company actually competed on provided value to customers. In considering these, they came up with a new concept called Formula 1. In which they eliminated, costly restaurants and appealing lounges because they realized that most people could do without these.



Strategic Focus: To dominate the market, a company should take a huge leap in value which is what Accor did. They use automated tellers instead of receptionist for customers to check-in and check-out. Their rooms are small and include a bed and only the bare necessities. Hotel stationary was removed and the building was constructed with good sound insulation....