ValueSpaceä

-- Winning the Battle for Market Leadership

Lessons from the World's Most Admired Companies

 

Banwari Mittal, Ph.D.

and

Jagdish N. Sheth, Ph.D.

 

June 2001

McGraw-Hill

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Table of Contents

Part I: ValueSpace: A Mandate for Value Creation

Chapter 1. ValueSpaceä : The Magic Land for Winning Customers

Chapter 2. A Framework for Creating ValueSpace

Part II. Understanding ValueSpace Strategy

Chapter 3. Customer Focus: The Foundation of ValueSpace

Chapter 4. Performance ValueSpace

Chapter 5. Price ValueSpace

Chapter 6. Personalization ValueSpace

Chapter 7. ValueSpace Expanders

Part III. Three Company Profiles in ValueSpace

Chapter 8. Caterpillar: Rock-Solid ValueSpace from Yellow Iron

Chapter 9. UPS: The Big Brown’s Package in ValueSpace

Chapter 10. Fossil: Crafting ValueSpace in Niche Markets

Part IV. A Blueprint for Action

Chapter 11. ValueSpace Building Processes

Chapter 12. Customer Value, Value Discipline, and the Pursuit of Excellence

Chapter 13. A Roadmap for Action

Epilogue: ValueSpace: The Science and the Art

Notes

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                                           Preface

        ValueSpaceä —we hold it in utmost admiration.

        ValueSpace—it is to us the be-all and the end-all of all business activity; the only purpose of all organizations, all business enterprises. It is the only justifiable goal of all reengineering, organizational renewal, entrepreneurship and corporate innovation. And it is the only path for sustained growth; for winning the battle for market leadership. It is the space where true market value is created. For shareholders; for employees; and, most of all, for customers. We present in this book a blueprint on how companies can build enduring ValueSpace for their customers.

        This book is at the intersection of our two long-held obsessions: As university professors, we view ourselves as lifelong learners; and for decades, we have been students of customer behavior on the one hand and business organizations on the other. We have studied theories of customer behavior—indeed created some of them ourselves--, and for decades, we have observed, analyzed, and written about business processes, precepts, and practices. In this book, we bring these two streams together—our knowledge of customers and our knowledge of businesses. This is our ValueSpace for you, the reader: Uniquely in the current sea of business advice books, we combine the customer and business perspectives. No longer do we need to pay mere lip service to customer orientation; we show how you can do well by doing good for the customer.

        We set out to understand what constitutes value for the customer and how companies can create it. Our research method was to study companies that were admired both on the Main Street and the Wall Street—we chose a sample of 11 Fortune’s Most Admired Companies. With financial support from the Marketing Science Institute (a Cambridge-based nonprofit research organization), we crisscrossed the country, visiting these companies, observing their operations, and interviewing senior executives. What we learned from these observations and interviews, and from our reflections, we report in this book.

Our framework, comprising the components of ValueSpace and its drivers, is quintessential—no matter what else you do or do not do, you must create these value components. Our framework is enduring—it is not the "project of the month"; long after the current fads have vanished, you must still build the value components we describe. Our framework is universal—it applies to all companies: manufacturing and service; small business or global enterprises, business-to-business or business-to-consumer; physical or digital; dot-com or not-com.

We intend this book to be a blueprint for thought as well as practice. We present conceptual framework to help you plan; we provide a self-audit form that you can use to assess your company’s current standing in the ValueSpace; and we present case histories, stories of the most admired companies, and insights from executive interviews that you would find both inspirational and actionable. It is a hands-on guide to launching your journey into the customer ValueSpace.

        Our own journey has been fascinating; we have learned a lot—from the Most Admired Companies we studied; from the executive interviews we did specifically for this research; and from thousands of conversations over the years with consumers, mangers, and corporate leaders just like yourselves. It is a pleasure and privilege to share with you our view of Customer ValueSpace, and our total fascination with it.

                        Ban Mittal                                  Jag Sheth

February 2001

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Selected Excerpts:

Value, not money, is the basic currency of all human interaction. When we meet someone, we try to quickly assess how long would it be worth our while to be talking to that person. If an incoming phone call shows up on our called ID, we promptly decide if we would gain anything by taking the call at that time. If we get 10 letters in the mail, we look through them and choose to open only those that we expect to contain some information of value to us. This is even more true for marketplace exchanges....

...

....

Keep your eyes on the value you offer your customers and constantly keep ahead of your competitors on delivering those specific customer values, and you will have some assurance that today’s customers will be with you tomorrow, and the day after. The new miracle medicine for continued customer patronage is customer value, rather than customer satisfaction.

....

Companies that invent new values such as these possess certain traits. They observe customers real close. They dig customer need to its essential core. And they keep their eyes on a singular target: creating far fetched new ValueSpace for the customer. These traits indeed lead a business to mold its own self-concept in the customer’s image. Rosenbluth redefines the very nature of its business as "business interaction management." 3M comes to view itself, instead of being a maker of masking tapes, abrasive papers, and adhesives, as a provider of bonding, protection, and masking solutions. And, XBS employees never fail to remind themselves who they are-- customer amazers!

....

This reinvention of oneself as a corporate being, this customer-centered adoption of a new self-identity, the constant contemplation of the customer desires —this is what it takes to invent unparalleled ValueSpace for the customer. This is what it takes to win the battle for market leadership. This is what it takes to thrive.

 

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