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January 18, 2024, vizologi

Assess Your Biz with the “Value Curve” Method

Do you want to evaluate your business effectively? The “Value Curve” method could be a helpful tool. This approach lets you look at your business from a new angle, finding ways to improve and spotting chances for growth. With the “Value Curve” method, you can understand your business’s competitiveness and make smart choices to stay ahead in the market. Let’s see how this method can give you a new view of your business’s performance.

Learn What the Value Curve Method Is

The Value Curve Model is a tool that plots consumer products against a company’s ability to provide value. This graph shows a product’s strategic profile compared to its competitors and the factors of competition within an industry.

Businesses can use this model to define roadmaps, refine marketing plans, and improve the selling process. These are vital components of driving innovation and scaling a business.

Drawing a Value Curve involves:

  • Identifying a product’s Unique Selling Point
  • Understanding customers’ needs
  • Being objective when evaluating solutions and competitors’ offerings

The main steps include implementing the Four Actions Framework to:

  • Raise
  • Reduce
  • Eliminate
  • Create elements in a given market

The Value Curve Method is best used in saturated markets, where businesses need to differentiate their offerings from competitors.

While the model can bring significant benefits, its effective application requires a deep understanding of customer preferences and market demands.

The Main Steps to Make Your Own Value Curve

What Makes Your Business Special

The Value Curve Model is a tool for businesses to understand how they create value and compete. It was developed by W. Chan Kim and Renee Mauborgne. The model plots consumer products against a company’s ability to provide value.

It consists of axes representing a company’s competitive ability in industry factors. This allows businesses to compare their products against those of their competitors. For example, a business may offer superior customer service or innovative product features, setting it apart.

The unique offering creates value for customers in a different way from other businesses in the industry. The Four Actions Framework can be used to alter the product in a given market, such as raising, reducing, eliminating, and creating elements, to further differentiate offerings.

The Value Curve Model can be particularly useful in saturated markets. However, its effective application requires a deep understanding of customer preferences and market demands.

The Four Actions to Shape Your Business

Adding New Stuff: What Can You Create

Businesses can add new value to a product or service in two main ways. Firstly, they can create a new product or market without any competition. Alternatively, they can reposition a product in an existing market by filling gaps that competitors have missed.

Identifying opportunities for new offerings involves understanding customers’ needs and objectively evaluating solutions and competitors’ offerings. For example, a company can use the Four Actions Framework (raising, reducing, eliminating, and creating elements) to alter their product in a given market.

Successful businesses have used the value curve method to differentiate their offerings. By using this tool, businesses can understand where they create value and how they can compete in the marketplace. This approach has been particularly useful in saturated markets, requiring a deep understanding of customer preferences and market demands.

Taking Stuff Away: What Can You Eliminate

When using the value curve method to evaluate a business, it’s important to identify specific items or processes that could be eliminated to improve efficiency or reduce costs. For example, a company may choose to streamline its production process by removing unnecessary steps or investing in automation technology to reduce labor costs.

Prioritizing areas for elimination involves understanding the customer’s needs and evaluating solutions and competitors’ offerings objectively. By eliminating certain elements of a business, a new value curve can be created, leading to an improved competitive position in the market.

For instance, removing features or services that are underutilized by customers can help a company stand out by focusing on its unique selling points and improving overall product performance.

Spending Less: What Can You Reduce

Specific expenses that can be reduced to spend less include dining out, subscription services, and impulse purchases. Being mindful of these expenses can help cut costs in areas such as entertainment, transportation, and utilities. This frees up funds that can be allocated to savings, investments, or other financial priorities. It also helps with better budget management and the potential accumulation of emergency or retirement funds.

Doing Better: What Can You Raise

Assessing a business with the value curve method involves looking at different areas to improve its overall value. This can include improving product or service quality, innovativeness, customer experience, and efficiency. These improvement areas are identified by comparing the company’s offerings with those of its competitors. Businesses can then stand out by recognizing and acting on opportunities to create a new and unique value proposition.

This might involve repositioning a product in its market or creating entirely new market space, ultimately setting the business apart from competitors and boosting its overall value.

When Should You Use the Value Curve

The Right Times for Value Curve Thinking

Value curve thinking is useful for analyzing competition and identifying areas for improvement in business strategy.

The Four Actions Framework helps companies pinpoint opportunities to create value by raising, reducing, eliminating, and creating elements within their products.

Real business stories illustrate successful implementation of value curve thinking, such as companies developing innovative products and redefining market spaces.

For instance, companies strategically adjust product features to fill market gaps missed by competitors, offering a unique value proposition.

Similarly, companies reposition products in existing markets with no competition, effectively creating new products and markets.

These examples highlight the effective use of value curve thinking for strategic innovation and differentiation in the marketplace.

Turning the Value Curve into Action

How to Put the Plan in Motion

To shape a business using the value curve method, businesses can analyze their products. They can identify areas to eliminate, reduce, raise, or create elements to stand out against their competition.

For example, a business might look for ways to eliminate unnecessary features or expenses to improve efficiency and cost-effectiveness. Similarly, they might reduce aspects that do not add significant value to customers. By raising elements important to their target market, like product quality or customer service, they can create a unique competitive advantage. Also, they can create new value by introducing innovative features or capitalizing on untapped market opportunities.

Smart tips for putting the value curve plan in motion include identifying the business’s unique selling point and understanding customer needs. It also involves objectively evaluating competitor offerings. By drawing a value curve, businesses can map their strategic profile and compare it to their competitors’. This enables them to refine their marketing plans and improve their selling process.

Value curve thinking is important for driving business growth in a saturated market. It helps differentiate offerings from competitors and addresses gaps in the market. It is also valuable when there is a demand for innovation in the industry. Engaging in value curve assessment can help businesses develop a clear value proposition and achieve a competitive edge.

Smart Tips for Using the Value Curve

Smart tips for using the value curve method effectively:

  • Understand customer needs.
  • Evaluate solutions and competitors’ offerings objectively.
  • Identify the product’s Unique Selling Point to stand out from competitors.
  • Consider the four strategic actions: Eliminate, Reduce, Raise, and Create.
  • These actions can create a competitive advantage in the market.
  • Use the model to develop roadmaps, refine marketing plans, and improve the selling process.
  • Focus on creating a new product or market with no competition, or repositioning a product in an existing market.
  • Fill gaps missed by the competition and differentiate offerings.
  • Consider the value curve method in business planning to compare strategies against competitors and develop a clear value proposition.
  • Particularly useful in saturated markets, it requires an understanding of customer preferences and market demands for effective application.

Look at These Real Business Stories

The Value Curve Model helps businesses understand where they create value and how they can compete. For instance, a company with a new product and no competition can shape its strategy by filling market gaps and repositioning within existing markets.

Another example shows how businesses used the Value Curve Model to differentiate products from competitors. They used the Four Actions Framework of raising, reducing, eliminating, and creating elements to adjust their products, setting them apart in saturated markets, and delivering greater value to customers.

Strategic differentiation allowed these businesses to achieve success by targeting customer preferences and market demands, identifying unique selling points, and refining marketing plans. These examples demonstrate the practical application of the Value Curve Model and how businesses have innovated, competed, and succeeded in the market.

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It generates limitless business ideas, gains insights on markets and competitors, and automates business plan creation.


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