2 questions about Wood Industry Business Management in Canada B.C
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January 2020 1
Value Propositions / Innovation Strategies
Chris Gaston, Ph.D.
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Objectives…
By the end of this presentation you should be able to describe:
– What we mean by “innovation”
– What we mean by “marketing”
– The basics of the “NABC approach” to innovating, or creating a value proposition
– The process of designing an “elevator pitch” as a first step in developing a “business plan”
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Customer
Competition
Company
What people want
Who else can deliver this want?
What you have that people want
MARKETING!!!
The concept of marketing
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Marketing Research
Market Mix
Marketing Strategy
• Customer • Company • Competition • Context/Climate • Collaboration
• Product • Price • Place • Promotion
Marketing Plan
Marketing plan
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The SRI approach to innovation
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SRI – The five disciplines of innovation
“Innovation is the creation and delivery of new customer value in the marketplace that also provides a
sustainable return to the enterprise.”
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SRI – The five disciplines of innovation
It is not the strongest of a species that survives, nor the most intelligent, it is the one most adaptable to change (Darwin)
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
Work on what’s important, not just what’s interesting
- Incremental or transformative
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SRI – The five disciplines of innovation
You don’t define value—your customers do!
Value Factor = Benefits / Costs
Value Propositions
NABC
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Value Factors
Prius
Quality Importance 0-5 Satisfaction 0-5 Benefit 0-25
Pollution 5 5 25
Styling 2 2 4
Reliability 5 4 20
“green” identity 5 5 25
Rear spoiler 0 4 0
74
Cost attributes Importance 0-5 Expense 0-$$$$$ Cost 0-25
Base price 1 $$$$ 4
Gas costs 3 $ 3
Repairs 4 $$ 8
Insurance 2 $$ 4
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Value Factor for Prius 3.8
Value Factor for Taurus 1.4
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Value Factors – Conjoint analysis
Choice-based analysis • recognizes that most purchase decisions come
down to a few specific attributes • excellent way to determine the trade-off of these
attributes (including price without directly asking) • take a proprietary lumber product as an e.g.
size and placement of knots clear lumber rings per inch degree of wane degree of sweep company reputation price
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
No Champion, no project, no exception!
- Market or technical champions
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SRI – The five disciplines of innovation
No Champion, no project, no exception!
-Market and technical champions -Importance of “watering holes”
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SRI – The five disciplines of innovation
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SRI – The five disciplines of innovation
Launching these disciplines of innovation throughout the organization
-Fostering innovation culture
-Continuous Value Creation
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FPInnovations template for industry engagement
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Plastic Wood Composites
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Profile Decking
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An example – Profile Decking
Need • Decking is a 3 bbf + market in the N.A. ($6 billion +) • Wood plastic decking has taken 30%+ market share (with considerable price
premiums) Approach • Produce profiled decking • Applying considerable technical and market research • Establish demonstration sites • Develop value chain, including product positioning, branding and distribution Benefit • Pacific silver fir treatable and dimensionally stable • Profiling minimizes checking, adds design appeal • Brandable • Attractive pricing, high margin / return-to-log potential • Attractive LCA Competition • Plastic wood composites, non-wood, traditional treated
wood decking
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Profile Decking – Vancouver Home Show
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Profile Decking – Boathouse Restaurant Opening
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Profile Decking
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Profile Decking
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Profile Decking
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UBC South Campus
150 units with 150-350 sq ft decks
Profile Decking
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– Commercial and residential demonstration sites
– Validated in trials: margin uplifts of over $200 per mbf
– Distribution agreement; sales at over $2200 per mbf
Profile Decking
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Assignment 1
For this Tuesday OR Thursday (Group A / Group B).
In class work on developing a one-page elevator pitch. Final one-pager for each group due this Friday by midnight.
For following two Tuesdays OR Thursdays (Group A / Group B).
Elevator pitch presentations.
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SRI – Elevator pitch template
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SRI – Elevator pitch in action
https://www.bing.com/videos/search?q=yutube+elevator+pitch+TV+show&view=detail&mid=1 7B6FF22929E933FFF9117B6FF22929E933FFF91&FORM=VIRE
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Quiz #2
1. What is the difference between an “invention” and a “innovation”?
2. What does “N-A-B-C” stand for?
3. What are the two categories of value proposition “champions” that were identified in the lecture?