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Positioning and Value Proposition

Value proposition and positioning are two of the most interesting and challenging concepts in business. Each industry faces its own set of challenges with regard to communicating and demonstrating these concepts.

A particularly interesting example value proposition is within United States Department of Defense contracting. Major contractors within the defense industry have shifted to a new paradigm- one where contractors must constantly reassess their marketing strategy and convey value to their customers with lean budgets, and potential employees who may be looking at the insecurity in the industry as a huge risk when considering a position within the industry. How do you convey value to a community as large as the Department of Defense and still remain relevant to the individual decision maker, employee, or customer? Frow and Payne’s (2011) article on value proposition is a great primer to models currently being used in the field of developing a value proposition from perspectives such as attracting business partners, customers, and qualified employees. The article’s primary focus is the establishment of a network of stakeholders in market domains (Frow & Payne, 2011, p. 223). Developing a value proposition is a comprehensive exercise, one that involves not only potential customers, but those with whom you hope to align your business. One of Northrop Grumman’s recent communication campaigns, Value of Performance, is particularly interesting. The campaign makes a point to emphasize the word “value” (and some others), in a slightly heavy-handed way of demonstrating that their products/services are more valuable than those of their competitors. It would be interesting to see data on which market segment these messages most effectively reach.

There’s a poignant statement on the value of positioning early in Nadji Tehrani’s article “On differentiation and positioning: Every company wants to be a peacock in the land of penguins but few companies know how to do it right!”: “Over the years, I have learned that if you don’t position yourself advantageously, your competition will position you and your product in the most disadvantageous way.” (p. 2). The author argues that in positioning, only one thing truly matters: be first. That’s it. As evidence, he asks the reader to recall who the second man to fly over the Atlantic Ocean was and assumes that the reader will be only able to identify the first person to do this, Charles Lindbergh. (Tehrani, 2002, p. 6). And really, it’s a valid point. First-to-market has been an effective strategy for centuries (think, Levi’s Jeans), but isn’t one that’s particularly helpful if you didn’t have the stroke of luck to be first.

Cited:

Frow, P., & Payne, A. (2011). A stakeholder perspective of the value proposition concept. European Journal of Marketing, 45(1), 223-240.

Tehrani, N. (2002). On differentiation and positioning: Every company wants to be a peacock in the land of penguins but few companies know how to do it right! Customer Inter@ction Solutions, 21(3), 2-6.

Leadership Philosophy: An Exercise in Values

When developing a leadership practice, look first to individual values.

The practice of effective leadership is multi-faceted and complex. The effective leader must be capable of balancing his or her personal interests with those of his or her staff, and with those of his or her organization. At times, effective leadership means challenging paradigms and finding innovative solutions to reach the optimal satisfaction of all interests.

  • An effective leader is dedicated to finding synergy where others see only compromise.
  • Leaders must break new ground in business, develop ever stronger relationships within his or her team, and be perennially reflective and mindful of his or her personal growth.
  • An effective leader is a hub of information; he or she is charged with creating, absorbing, filtering, and disseminating data, when and as appropriate.
  • An effective leader is mindful of the decisions he or she makes, and is aware of the impacts of those decisions.
  • An effective leader is responsible for motivating, rewarding, admonishing, correcting, apologizing, appreciating, and leading through example.

The practice of leadership, and the qualities that denote an effective leader, are changing and morphing with the same speed that business and the world at large are changing and morphing. Today’s effective leader may be tomorrow’s barrier to progress. With all of these things in mind, an effective leader is always, first and foremost, adaptable.

A key responsibility of every leader is motivating those that work for him or her, and being personally motivated.

The propensity for motivating colleagues and staff is probably the most valuable asset that a leader can have. There are myriad theories on the most effective method to motivate a person, and each situation must be approached individually; in motivation, as in almost all other facets of effective leadership, there is no simple panacea. The happiest people are engaged and motivated in their work.

My personal leadership philosophy is centered on the idea that the only constant in our universe is change. I’m dedicated to being the sort of leader that people look to and admire; I try my best to lead by example, inspire others to be passionate about their work, and build an organizational culture that values the people involved. I recognize that the means I use to reach this goal are constantly going to change. Balance between work, life, opportunities to use skills, and opportunities to learn are essential in an engaged employee population; I strive to promote this balance in my leadership practice.

Marketing Case Study: Samsung and the Smartphone Market

Being a “fast follower” and investing in research and development has historically helped Samsung creep up on and capture some of Apple’s market share. To continue enjoying profitability in the consumer electronics market, Samsung has rolled out a new and highly visible marketing strategy, with emphasis on the smartphone market. By subverting Apple’s cool factor in its most visible marketing campaign, it’s making their products appealing to the market segment where a large portion of buying power resides- teens and 20-somethings. Their basis of their competitive advantage lies in their value proposition, responsiveness to trends, and ability to work with complementary companies to provide products that the consumer truly wants. Samsung’s current strategy seems to be effective, as it is profitable and seen increasingly as a true competitor to Apple, but that isn’t to say that there isn’t room for improvement.

The consumer mobile phone market is incredibly competitive, with only two companies (Samsung, Apple) successfully turning a profit. Apple is the largest portion of this market and has a strong foothold on consumer behavior and trends, and has been such an influential market leader for such an extended period of time that they have become the standard by which all smartphones (and tablets) are measured, and the standard that myriad competing companies have failed to meet.

Enter Samsung, a long-time producer of consumer electronics. In a market where a consumer had either an iPhone (Apple), or an “Android phone,” (all other competitors), Samsung has started to become a relevant and recognizable solution provider, with a product that many liken to Apple. Specifically regarding the business-to-consumer, and largely homogeneous mobile phone market, Samsung’s primary challenge is communicating two largely opposing ideals: value and style. The United States consumer market for smartphones is large and unrestrained to a particular demographic: middle class children in their pre-teens want smartphones to keep in touch with friends just as much as businesspeople staying on top of their work. Apple has perfected the approach to these varied demographics by offering a controlled and intuitive experience, where Samsung’s products, and therefore the user experience, are at the mercy of the maturity of the operating system it is running. What Samsung offers that Apple doesn’t is flexibility; Samsung offers products at different price points, with different carriers, and complemented by varying carrier service options.

Among the factors influencing the consumer electronics market is the whisper that Apple may have run out of steam- that their monopoly of most of the high-end consumer electronics market may be ending. Is the recently announced Apple Watch the new tide, or the nail in the coffin? How does it stay relevant, as competitors are able to offer increasingly similar yet more value-driven products? Apple’s primary draw is still that it is such an exceptionally loved product- millions of iPhone allegiant consumers will simply not try another brand of smartphone. Apple’s cloud interoperability and cooperative features between Apple products (watch, phone, computer, home entertainment) keep the family of products- the brand- relevant and useful, even as competitors surpass Apple hardware capabilities.

Since the market for most consumer electronics is elastic, Samsung must be able to offer its product at a price competitive with companies looking to undercut Samsung. In the mobile phone market, where prices are largely inelastic for both phones and carrier service, Samsung must convey style and value over Apple’s product offering.

Strategy: Stay Profitable, Visible, and Relevant

Truly, part of Samsung’s success can be attributed to its diverse product offering. Capitalizing on this, and capitalizing on its ability to work collaboratively with complementary companies and industries, Samsung should continue to look for collaborative opportunities. Samsung’s largest competitor in the consumer electronics market is infamous for being inflexible. Capitalizing on this, Samsung can venture into markets that require cooperation, such as social media, consumer electronics, and advertising to find synergy and develop new and envelope-pushing products and services. Even within its own products, Samsung should look to develop and market a family/suite of consumer electronics and lifestyle solutions. For example, developing software that allows a consumer’s Samsung smartphone to interact seamlessly with the consumer’s Samsung television, computer, and washing machine to make the user’s life simpler and allow them wireless access to all of the things important to them.

While Samsung is successfully maintaining a foothold in the mobile phone market, neglecting its other product offerings would be a misstep, especially because the mobile phone market is so competitive and so successfully controlled by Apple. In this market, Samsung needs to continue to develop brand recognition. Apple has shown that the mobile phone market is not just a game of “bigger, badder, better,” it is a game of style and finesse paired with reliably intuitive products. To continue gaining market share, appealing to the opinion leader is essential; Samsung is establishing itself as a differentiator with value and appeal. While the current marketing strategy is helping them hold their ground, Samsung should take the focus away from subverting competitors, and move towards demonstrating their value to consumers.

How DO you achieve motivation? One Approach.

It is likely that the question “how do I motivate this person to do what I want” is as old as time itself. As long as there have been workers, there have been people striving to motivate them to do as they’re asked. Fredrick Herzberg, a motivational theorist and behavioral psychologist, answers this question jovially: “The surest and least circumlocuted way of getting someone to do something is to administer a kick in the pants- to give what might be called the KITA.” (Herzberg, 1987).

Herzberg’s theory on motivation is grounded in behaviorist psychology, and he defines motivation as “a function of growth from getting intrinsic rewards out of interesting and challenging work” (Herzberg, 1987). Herzberg theorizes that there are two primary aspects of motivation- what he calls “hygiene factors” and “motivators,” or dissatisfiers and satisfiers (respectfully). With respect to work, he postulates that “the opposite of job satisfaction is not job dissatisfaction but, rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no job dissatisfaction” (Herzberg, 1987). The dissatisfiers (things that can influence how a person feels on a scale from ‘job dissatisfaction’ to ‘no job dissatisfaction’) include company policy, supervision, relationship with supervisor, working conditions, salary, relationship with peers, personal life, relationship with subordinates, status, and security. Motivators (those things that influence a person’s position on a scale from ‘no job satisfaction’ to ‘job satisfaction’) include the work itself, achievement, responsibility, advancement, and growth.

Simply, hygiene factors are a drive to avoid pain, while motivators are a drive to experience psychological growth.

The distinction between dissatisfiers and satisfiers is further explained as “extrinsic job rewards” and “intrinsic job rewards.” Further, Herzberg theorizes that to improve work performance, an employer must create the opportunity for the realization of intrinsic rewards rather than “horizontal job loading,” or simplifying a job in hopes of quantifiably greater performance.

This theory’s strength is that it is practically universally applicable. A job of almost any nature (physical, cognitive, etc.) can be improved through vertical loading. Similarly, it promotes the full realization of an employee’s potential and recognizes that motivation comes from within and not from “KITA” factors. This theory’s primary limitation is that it would be difficult to self-apply. For example, I tried to practically apply this theory to areas of my life where I lack motivation (for example, cleaning the house). I found it difficult and even laughable, especially when attempting to vertically load simple, menial tasks (I’ll make the task of cleaning the bathroom more difficult and therefore intrinsically more satisfying by only using my left hand, left eye, and left leg to clean). I think that behaviorist psychology falls short with regard to self-directed motivation, at least for me. I would be more likely to apply a cognitive approach to motivation in times of self-directed motivation. Additionally, not every task could be made more challenging or more intrinsically rewarding, and in that case, the best you could hope to do is enable ‘no dissatisfaction,’ and that seems insufficient. This theory is also limited in that it does not take into account personal motivations. Achievement is a subjective value and I think that this theory assumes that ‘motivators’ (achievement, recognition, etc.) are universally and objectively applicable.

While Herzberg’s two-category theory on motivation does not likely fit all applications, it presents a sound and reasonable system of beliefs that could enable increased motivation in staff populations. The “vertical job loading” technique could be invaluable to increasing job satisfaction, especially in situations where an employee’s full potential is not realized.

Quotes from:

Herzberg, F. (1987). One More Time: How Do You Motivate Employees? Harvard Business Review (reprint), 1-16.

Strategic Value; Strategic Management 101

The concept of “strategic management” exists in constant evolution in both academia and practice. Kim Chan, the co-director of the INSEAD Blue Ocean Strategy Institute, once noted that “Today we can hardly speak of strategy without referencing competition or using a war analogy. Because land is limited, the only way to advance one’s territory or market share is at the expense of another – a zero-sum game.” (W Chan Kim & Mauborgne, 2007)

Strategic management originally served to create plans to out-produce rivals, but in the knowledge-centric business of today, this approach has necessarily adapted. Strategic management in the 21st century focuses on tailoring an organization’s goals, management, and culture to be competitively superior.

History of Strategic Management

In the world of academia, strategic management is a fairly young discipline, beginning in the 1960s. The Classical school of strategic management was essentially synonymous with business policy and involved aligning a business’ purpose with an identified market need. Strategy, according to the Classical school of strategic management, is designed and developed by matching “key success factors” and “distinctive capabilities.” In the era before the internet, this strategy was effective. Market areas were clearly delineated, and so focusing on doing one thing very well was an effective and prudent strategy.

Development of Strategic Management

Moving into the 21st century, strategic management has necessarily changed. Following the dot-com bubble and the massive explosion of information, the very nature of business changed, and logically following, so did the way one strategically manages a business. In the 21st century, strategic management theorists emphasized creating new paradigms and market spaces by “reconstructing market boundaries.”

Current State of Strategic Management

Contemporary strategic management, the most modern school, is firmly rooted in psychology, biology, and anthropology. Emphasis is placed on learning to formulate strategy through experiences and lessons learned. Knowledge, in all its modern abundance, is also exploited and utilized to develop an effective strategy.

Blue Ocean Strategy

Blue Ocean Strategy is a prominent theory in the modern school of strategic management. In this theory, there are two types of oceans- red oceans, which are the identified industries and areas of work; and blue oceans, which are the business spaces that have yet to be identified. This analogy serves to help the strategist identify un-competed market space where a business could set the paradigm. Innovation, entrepreneurship, and boundary re-definition are essential to blue ocean strategy, and are utilized intensively to extend beyond the boundaries of conventional thinking.

Putting Ideas into Practice

While determining the appropriate strategic management approach for an individual organization to implement may be time consuming, it is also a valuable exercise that will lead to better outcomes and stronger organizational and financial health.

Quote from W Chan Kim, & Mauborgne, R. (2007). Blue Ocean Strategy. Leadership Excellence, 20.

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