Value! What is the essence of business? Profit or Value. Globalization ushers in an era of bridged market divides and the fall of the physical barriers of trade. With market boundaries blurred, competition becomes a hard fought battle with survival as the goal. Thus, organisations become centres of cost reduction and profit maximization as the value focus is lost in the pursuit of survival. Cut throat competition becomes the order of the day as strategies are constantly redefined and cost centres churned off in a bid to achieve corporate objectives. The thought is not value creation but the survival of the fittest and the ever revolving strategy of survival.
Products become alternatives and alternatives become king in a saturated market. Organisations are thus left with the dilemma of product differentiation, expanding product lines or simply innovating their current offerings. But often in their war style strategy approach, organisations stand firm and invest in the customer service consciousness. The strategy focused on offering excellent service and hopefully winning customers off competition; but this never solves the underlying problem or creates new demand rather it reallocates already existing demand from one point to another. Service is a common denominator in business and not a distinguishing factor for an organisation with an intention to dominate the market. Market leadership is not about beating competition but rather sustaining dominance in value innovation.
This is the age of value driven businesses. Customers are constantly thinking price and weighing products in terms of value. They are becoming more value-centric and organisations need to shift focus from the service orientation mentality to a value driven one. Business exists not because of competition or customers but solely on the idea of value creation. You have a business because you have a value to offer. So customers don’t buy your product; they buy the value it offers. Your products are thus value vehicles.
In a saturated market with cut throat competition. How do you survive? Strategy is often the general chorus. Playing smart in an ocean of sharks. It may be smart in the short run but in the long run how does that affect your position? What value does that create for you other than survival? Eventually you lose track of the essence of business and lose relevance without knowing and you are stuck in the hole of preserving the age long brand image. Your value propositions become eroded by corporate objective and the corporate objective becomes the value proposition.
Corporate strategy needs to be re-engineered from a war style approach to a value driven approach. Don’t let your strategy be to beat the competition or surpass their outcome. You are not in business because of competition. The focus of corporate strategy shouldn’t be sustaining profitability but innovating the value offerings that will sustain the organisation that will make the profit. You can only make margins if you are in existence and still relevant. No matter how much profits are made, organisations rise and fall out of existence. What often sustains a business is not the product or the customer but the value they offer, the value that speaks in the offering and in their approach to business. Sustaining the business growth and profitability is thus bent on your ability to create and innovate value. Not just the incremental creation of a sustained position but the innovation of a position that offers new openings for opportunity, new markets to create new demand.
Innovate; businesses of the 21stcentury thrive on innovation. They don’t just create value, they innovate it. Value innovation is creating sustainable value. This will create new markets and new demand. Organisations are defined by their ability to innovate. Don’t just offer the same products with different names and packaging, offer the value you propose in a manner that speaks meaning. Define, innovate and distinguish your value propositions, don’t innovate for innovation sake or for the purpose of just expanding product lines focus on the value you want to offer. The risk is not in trying something new but it is in understanding and sustaining the new.
Don’t sell value, market it! Let your value proposition speak to the customer. Create the value attachment that brings the product to the customer and the customer to the product. If you truly offer value show it in your product offering. Let it get the customer thinking and craving! Show the value you offer and speak it in the customer’s language. Focus on your value proposition reducing costs rather than outpacing competition. Offer more for less, don’t over-deliver; it leads to cost implications, churn out the perks that the industry offers which don’t speak value and is nothing more than extra cost implications, increase your value base and create a new value point.
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