Enterprise Project
aman_2910
EPLecture3ValueandDemand20.pptEnterprise Project UMCD9Q-30-3
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
Understanding value, demand and competitors
Bristol Business School
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Context
Understanding value
Delivering value
Appropriating value
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Signposting
- Understanding value and value co-creation
- Ascertaining demand and adding value
- Assessing your competitors
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What do we mean by value?
Understanding value
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Understanding value
- Value is an elusive concept –(Woodall, 2003)
- Typically in literature value concepts imply some form of assessment of benefits and sacrifices
- Value has also been treated as monetary gains
- Value creation is a process through which the user become better off in some respect or which increases the customer’s well-being.
Gronroos, 2008, 2010, 11
Sanchez-Fernandez et al, 2009)
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Understanding value
- “Value for customers may mean that after they have been assisted by a self-service process, for example, (cooking a meal or withdrawing cash from an ATM – eating out at a restaurant or withdrawing cash over the counter in a bank they are or feel better off than before” – (Gronroos, 2011)
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Understanding value
- Understanding value for a customer is an elusive issue:
- For someone driving a car may mean value
- For someone else value may relate to having an opportunity to meet with friends enabled by the drive made possible by a car (physical use)
- Another person may find value in the process of considering buying a special car or making actual purchase (mental use)
- For someone the mere possession of, for example a luxurious sport car may create value (possession)
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Understanding value
- Creating value may give an impression of a conscious, explicitly considered process
- In many situations value is experienced in an unconscious way that emerges out of the use of goods and service activities (Korkman, 2006)
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Understanding value
- The best way to understand value for customers (value creation) can not mean anything other than the customer’s or any other users’ experiential perception of value –in –use. (Gronroos, 2011)
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Understanding value
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Value co-creation
- The capability that customers have to co-create value with the firm through interaction for development of new business opportunities
- No longer on opposite sides
- This challenges the most important pillars of capitalist economies where value is usually determined before a market exchange takes place.- demand vs supply model
Understanding value
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- Goods or services?
Goods Services
Or service bundle?
Understanding value
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Understanding value
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Enterprise Project UMCD9Q-30-3
Presentation by
Dr Akin Ojolo
Module Leader
September 2019
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- Qualitatively
- Ethnography
- Focus groups
- In-depth interviews
=> Insight !
Q. What am I selling, and to whom?
Q. What is the underlying value?
Ascertaining value
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- Quantitatively
- Primary research
- Secondary research
Q. What is the realistic potential demand?
The myth of the bottom line?
Ascertaining demand
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Adding value
- Guarantees
- Reputation
- Training
- Support
- Packaging
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Adding value
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Identifying your competitors
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Identifying your competitors
- Competition should be one of the first things any entrepreneur researches.
- Competition is good for many reasons
- it inspires creativity, it maintains fair prices, and it promotes risk taking.
- The business world is not a Little League, not everyone gets a trophy. In fact, most businesses fail.
- Understanding who you’re competing against is a critical part of any business plan.
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Identifying your competitors
- There are three types of competitors:
- Direct competitors – those offering similar or identical products or services. These are the most important because they compete directly and you need to understand just how you are different – (Creating a different Value)
- Indirect competitors – those offering close substitutes.
- Future competitors – those who could enter your market in the future. If your new venture is successful it will attract competitors.
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Competitors Analysis Grid
Analysis of Competitors for “Kalb’s Breakfast Bar”; Cereal Bar, Kolaches, Donuts, Tacos & Smoothies”
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| Competitor | Product/Service Price | Location | Facility | Strength | Weakness | Strategy |
| Kolache Creations | £0.95-£1.35/Kolache | 13 Burnet Road, Suite Bristol BS1 | Great location, easily accessible | Great Location & good website. Big selection of Kolaches | Don’t offer donuts, tacos, cereal or smoothies | Outperform with bigger menu selection and cool atmosphere at affordable prices. |
| Taco Deli | £1.65-£3.25 | 42 Lamar Road Bristol BS2 | Inconveniently located. Rough exterior but interior is well appointed. | Great location and website! Great food | Don’t offer donuts, kolaches, cereal or smoothies | Outperform with bigger menu selection, location on Burnet and cool atmosphere at affordable prices. |
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The five competitive forces Model- Porter (1985)
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The value pie:
Total value
Created
Value
Appropriated
After Amit and Zott (2010)
Value appropriation
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Final thoughts
What is your business value proposition?
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Further reading
Barringer, B. R., and Duane Ireland, R. 2016. Entrepreneurship: Successfully Launching New Ventures, 5th ed., Upper Saddle River, New Jersey: Pearson Education Inc.
Marco Galvagno et, al (2014) Theory of Value co-creation: a systematic review. Managing Service Quality , Vol,24 No 6 pp643-683.
Hannu Saarijarvi et, al (2013) Value co-creation: theoretical approaches and practical implications. European Business Review Vol. 25 No1, pp 6-19
Gronroos (2011) Value co-creation in service logic: A critical analysis. Marketing Theory 11(3) 279-301.
Paul Burns, 2018. New Venture Creation- A Framework for Entrepreneurial Start-Ups Second Ed.
