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Version 8.0, December 2008
Create innovative opportunities Accelerator Workshop 1
Workbook
Help our customers to be more successful
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Title Time(Method)Title TimeACCELERATOR WORKSHOP 1 AGENDA
Accelerator Workshop 1 content is taught along the Value Innovation Approach
Visual Fair• Presentation of ideas
8) 90
Introduction1) 90
IDEO• One company's secret weapon for
innovation
45
Market Exploration cont.• Path 3: Across the industry value chain• Path 4: Across complementary offering• Path 5: Across functional or emotional
appeal• Path 6: Across time & trends
6) 240 Visual communication preparation• Work on Impact Group project• Preparation of Visual communication
10) 240
Business Case & Visual Communication• Elements of a business case• BASF PhaseGate
9) 60
The Blue Ocean• Value innovation• BASF success story
2) 45
Jamming• John Kao on innovation
3) 30
To-be Value Curve• Development of To-be Value Curve• Preparation of Visual Fair
7) 90Visual Awakening• Strategy Canvas• ERRC• Innovation activity• As-is Value Curve
4) 120
Market Exploration• 6 Path overview• Path 1: Across alternative industries• Path 2: Across strategic groups
5) 135Transfer & Workshop Feedback12) 60
Challenge session• Presentation of Impact Group project
11) 90
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KEY CHALLENGES IN BASF’S PAST & FUTURE
BASF 2015 seeks to achieve superior growth above the industry curve
ProductsDifferentiation at the product level is insufficient to win
Processes Lean processes are a “need to play” criterion
Innovation & PeopleThe winning combination is innovation driven by the best team in the industry
Growth
Time
Potential BASFGrowth Curve
Industry Growth Curve
BA
SF 2015
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BASF Leadership Compass
Clarity and a Sense of RealityClarity and a Sense of Reality
Enthusiasm and InspirationEnthusiasm and Inspiration
Performance Performance and Speedand Speed
Strategic & Strategic & Operational Operational LeadershipLeadership
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Strategic guidelines
INSTRUCTIONS EXERCISE
10 min
Discuss the specifics of „your“ guideline and how it interacts with the others
• Get together in 4 groups – one for each strategic guideline• Briefly discuss in your group:• Have you seen this guideline applied in your BU?
– What are you doing in respect of the guideline?– What challenges are you facing?– What changes resulted from this pillar? What are further
possible changes?– How does your guideline interact with the others? Do
you see synergies or challenges?• Select a spokesperson to present your findings
Earn a premium on our cost of
capital
Form the best team in industry
Ensure sustainable
development
Help our customer to
be more successful
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“Helping our customers to be more successful” means improved customer interaction
Earn a premium on our cost of
capital
Form the best team in industry
Ensure sustainable
development
Help our customer to
be more successful
• Learning organization: know-how transfer and best-practice exchange
• Culture change: bottom-up action across regional and unit boundaries
• Business impact: scout and implement innovative business opportunities
• Common language: BASF-wide M&S concepts, standards and tools
• Customer intimacy: promote M&S excellence, customer focus and value
Improved Customer Interaction
Help our customers to
be more successful
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Two Initiatives - One Goal: Value Based Management (VBM) andHelp our Customers ... (perspectives)
Back-End-Business Model
GeneralValue Driver
SpecificValue Driver
CIM-SpecificValue Driver KPIs
EBIT afterCapital Cost
EBIT
CapitalCost
ContributionMargin 1
Sales
Fixed Cost
Interest Rate
Capital Base
Variable Cost
Spot Sales
CurrentAssets
FixedAssets
Price
Volume
Monthly Contract Price
Budget
Administration
Accounts Receivable
Inventories
Commission
Merchandise Material
Freight
Transfers + Sales
Styrene Purchases(dependant on C2 and C6)
Swaps + Offers
Contract Closure
Sellig Cost
-
-
Dunning
Volume Planning
+x
-
Invoice Creation
Sales Forecast
Customer Ordering Pattern
GeneralValue Driver
SpecificValue Driver
CIM-SpecificValue Driver
GeneralValue Driver
SpecificValue Driver
CIM-SpecificValue Driver KPIs
EBIT afterCapital Cost
EBIT
CapitalCost
ContributionMargin 1
Sales
Fixed Cost
Interest Rate
Capital Base
Variable Cost
Spot Sales
CurrentAssets
FixedAssets
Price
Volume
Monthly Contract Price
Budget
Administration
Accounts Receivable
Inventories
Commission
Merchandise Material
Freight
Transfers + Sales
Styrene Purchases(dependant on C2 and C6)
Swaps + Offers
Contract Closure
Sellig Cost
-
-
Dunning
Volume Planning
+x
-
Invoice Creation
Sales Forecast
Customer Ordering Pattern
KPIs
EBIT afterCapital Cost
EBIT
CapitalCost
ContributionMargin 1
Sales
Fixed Cost
Interest Rate
Capital Base
Variable Cost
Spot Sales
CurrentAssets
FixedAssets
Price
Volume
Monthly Contract Price
Budget
Administration
Accounts Receivable
Inventories
Commission
Merchandise Material
Freight
Transfers + Sales
Styrene Purchases(dependant on C2 and C6)
Swaps + Offers
Contract Closure
Sellig Cost
-
-
Dunning
Volume Planning
+x
-
Invoice Creation
Sales Forecast
Customer Ordering Pattern
EBIT afterCapital Cost
EBIT
CapitalCost
ContributionMargin 1
Sales
Fixed Cost
Interest Rate
Capital Base
Variable Cost
Spot Sales
CurrentAssets
FixedAssets
Price
Volume
Monthly Contract Price
Budget
Administration
Accounts Receivable
Inventories
Commission
Merchandise Material
Freight
Transfers + Sales
Styrene Purchases(dependant on C2 and C6)
Swaps + Offers
Contract Closure
Sellig Cost
-
-
Dunning
Volume Planning
+x
-
Invoice Creation
Sales Forecast
Customer Ordering Pattern
Customer
VBM and perspectives
generatevalue
costs
profit
VBM translates customerrequirements
to the BASF back-end
perspectives targets theinteraction with the customer
BASFEnablers Back-End
Model
Customer Interaction Model (CIM)
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With perspectives… …to a well connected organization
Supporting tools:
• Accelerator Workshops
• Coaching
• perspectives Intranet
PROCESS OVERVIEW
BU Impact
You have successfully finished the BU Dialogue......and now the work starts!
Impact GroupsBU Dialogue
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As a Change Agent you will encounter different levels of commitment
CHANGE COMMITMENT CURVE
Time
Com
mitm
ent L
evel
Understanding
Acceptance
Commitment
Advocacy
I know that the Project
is happening
I understand what the project
will mean for business, our product/output
and me personally
I am willing to begin working in new ways and
adopt new processes and systems and
make them work
I support the changes the
project brings and am committed to
doing what it takes to make it a
success
I publicly support the new processes and
provide help and guidance to
colleagues, to enable their adoption of the
new working practices
Negative Perception*
Confusion*
Change Aborted after Implementation*
Decision not to Attempt/ Support Implementation*
*Change Risks
Awareness
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Achieving the right balance between supply for change and demand for changeTaking action at a macro level (the organization) and a micro level (the individual)Placing emphasis on the different quadrants at the right time
Managing change to a successful conclusion involves different aspects
Macro
Micro
Supply Demand
Setting and communicating the vision of the “To-be” state; directing
the organization to get there
Providing the organization with the competence, structure and
environment to make the change and realize the benefits
Creating demand for the change in the business
Planning and managing the move from the “As-Is”
organization to the desired “To-be” state NAVIGATION
ENABLEMENT BUSINESSOWNERSHIP
EXECUTIVE LEADERSHIP
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Time
Supp
ort f
or C
hang
e
End Users
Understanding
Acceptance
Commitment
Advocacy
Sponsors Change Agents
Navigation Leadership Enablement Ownership
Focus and importance of the Change Management quadrants and related activities vary during the change lifecycle
Managing all 4 quadrants ensures commitment to the change, increasing the ability to sustain it.
Awareness
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Accelerator Workshops 1 to 3 cover the entire marketing & sales process
The sales process
Customer analysis & power mapping
Sales process
Deliver the solution/product
Negotiate contract and close deal
Offer value
Assess customer needs
Understand customer business and structure
Purchasing process
Implement solution/ use the product
Negotiate and sign
Search for suppliers, request and compare offers
Realize problems and search for solutions
Plan business analyze gaps and define actions
Purchasing process
Implement solution/ use the product
Negotiate and sign
Search for suppliers, request and compare offers
Realize problems and search for solutions
Plan business analyze gaps and define actions
Implement solution/ use the product
Negotiate and sign
Search for suppliers, request and compare offers
Realize problems and search for solutions
Plan business analyze gaps and define actions
Secretary of State (MoI); name
Department heads other
Data centers; name
IT applications and policies; name
IT and Infrastructure
Telecommunications and Radio; name
Ratifier
Immigration and Border Control; name
Operations; name
Civil security;name
Federal and Border Police; name
Crisis management; name
Expert
Coach
Decision maker
Multiplier
Multiplier
IT infrastructure and networks; name
IT Security and data privacy; name
Multiplier
Expert
Multiplier
Expert
Gatekeeper
Supportive
Coach
Not known
Negative
Central procurement; name
Interagency manag-ement; name
Strategy and planning;name
Multiplier
Expert
Gatekeeper
ackground questions
inalize-requirements questions
Question
trengthen-case questions
BB
nalyze-issue questions
AA
SS
FF
"BASF" model for needs assessment
Customer Interaction Models
Needs-based segmentation
Pricing layersCreate a To-be Value Curve
Value Innovation Approach
6 Paths
"Capture maximum value""Design winning offers""Create innovative opportunities"
Across strategicgroups
22
Across the industryvalue chain
Across complemen-tary offerings
44
Across alternativeindustries
11
Across functional oremotional appeal
55
Across time & trends66
33
Create Reduce
Raise
Eliminate
To-bevalue curve
Process partner
Image buyer
Convenience buyer
Quality buyer
Price buyer
BASF's current position with the customer
Futu
re c
usto
mer
attr
activ
enes
s
OVERVIEW OF ACCELERATOR WORKSHOPS 1 TO 3
Market pricing
Product/ Market Pricing
transactional pricing
Product pricing
Transactional pricing
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Participation in perspectives –Continued growth of participation
CUMULATIVE NUMBER OF PARTICIPANTS*
1.030 1.350400
450350
2.290
50
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
2005+2006 2007
* as of 30th June 2008
Impact Group
Business Model Lab
perspectivesKey Concepts
6,500
cumcum
Deep Dive
1,030 1,350 1,580400
450550350
2,290
4,20050
170
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
2005+2006 2007 Target 2008
* as of 30th June 2008
Impact Group
Business Model Lab
perspectivesKey Concepts
1,800
4,140
cumcumcum
Deep Dive
For more information please visithttp://perspectives.internal.basf.com
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Visual awakening
Visual fair Visual communication
Market exploration
Business case
Value innovation approach
6 Paths
Exploration & interview
Final presentation
To-be Value Curve
Business caseAs-Is Value Curve
Idea presentation
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Framework steps in detail
• Gather information through research to find out about potential factors and as-is situation
• Show current situation by setting up As-is Value Curve using the Strategy Canvas
• Develop questions according to 6-paths
• Interactive presentation of potential ideas to customers & other BASF challengers
• Assessment & rating of ideas by all participants
• Voting on most promising business ideas
• Decision by project manager on which ideas to pursue further
• Concept paper & business case will be developed for selected ideas
• If business case is negative, the idea will not be pursued
• Preparation of positive business case(s) for final leadership presentation
• Final prioritization, alignment of ideas and decision on next steps by BU leadership
• Interviews with customers & other people along the industry value chain
• Develop ideas and To-be Value Curves
• Prepare visual fair (including prototypes, drawings, presentations etc.)
Visual awakening
Visual fair Visual communication
Market exploration
Business case
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What are key elements in finding profitable customers and markets?
What enables companies to clearly differentiate from competitors and to create new markets?
What is innovation? What is value?
Key questions of this session
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BLUE VS. RED OCEAN
Red Ocean –Existing competitive arena
• Market boundaries given and not challenged
• Focus on competition (outperform)
• Market boundaries not set
• Focus on market/ industry/ customers
Blue Ocean –Untapped market space
When searching for value innovation, you need to dive into the Blue Ocean
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Get to know the characteristics of Red and Blue Ocean
INSTRUCTIONS
• Get together in groups
• Discuss the characteristics of Red or Blue Ocean and document them on a flipchart
• Be creative: You may draw pictures, write down points or even act a short scene…
• Be prepared to present your results
What is Red Ocean? What is Blue Ocean?
EXERCISE
5 mins
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Blue Ocean and Red Ocean strategy are characterized by different features
OVERVIEW
Source: Blue Ocean Strategy (W. Chan Kim, Reneé Mauborgne)
Align the whole system of a firm’s activities in pursuit of differentiation and reducing cost
Break the increase value-reduce cost trade-off
Create and capture new demand
Make the competition irrelevant
Create uncontested market spaceBlue Ocean Strategy
Align the whole system of a firm’s activities with its strategic choice of differentiation or reducing cost
Make trade-offs between increase value and reduce cost
Exploit existing demand
Beat the competition
Compete in the existing market space
Red Ocean Strategy
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Low
HighRelative offering level
Price(Hotel prices in
Berlin, Germany)
Value innovation through differentiation creates profitable growth
STRATEGY CANVAS AND VALUE CURVE EXAMPLE
1-star hotel €40
€602-star hotel
€35
Eatingfaci-lities
Archi-tecture
Lounges Room size
Furni-ture
Access-ibility
Bed quality
Hygiene Quiet-ness
Principal factors
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a c d ebLow
HighRelative offering level
f
Avg. of major competitors
BASF As-is 1,80
1,82
Price(EUR/kg)
To differentiate from competition it is essential to define Principal factors from the customer’s perspective
FICTITIOUS BASF EXAMPLE
1,90BASF To-be
Technical service
Backward-integration
Expertise Supply chain
Contracts Channel manage-
ment
BASF perspectivePrincipal factors
STRATEGY CANVAS AND VALUE CURVE
Dedicated in-house
technician
Offer 100% supply
guarantee for A-products
24 hrs. on-line training
for all operators world-wide
Delivery of A-products
within 36 hrs. world-wide
Individual contract design
One stop shopping
Customer perspective
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• Understanding customer requirements and differentiate from competitors
• Identification and communication of Blue Ocean is a continuous process to which everyone can contribute
• Offerings need to be reviewed regularly to ensure that customer requirements are consistently met, so that BASF gets a fair share of the value created.
Key messages
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Key questions of this session
• How can “Jamming” help you to find Blue Oceans?
• Why are structure and creativity important for developing innovative ideas? How do they play together?
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Blue Ocean is only achieved when you combine both structure and creativity
STRUCTUREBLUE
OCEANJAMMING+
GENERAL REQUIREMENTS FOR INNOVATION
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Key messages
• Through the creative process of Jamming you can find Blue Ocean ideas
• For Jamming you need both creativity and structure. The structure provides you with the general conditions.
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How can customer requirements be translated into Principal (key buying) factors?
How to visualize and assess to what degree customer requirements are currently met?
Key questions of this session
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INTRODUCTION
Strategy Canvas and Value Curves
Eliminate / Reduce Raise / Create
To-be
As-is
Relative offering level
Principalfactors
Factor 1
Factor n
Industry standard
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BASF EXAMPLE
Possible definitions of Principal Factors of the “As-is” Value Curve
Ability to comply fully with supply agreement
Relevant & broad product portfolio across different business units within BASF to improve offering to the customer
Ease, speed and safety in application of product
Company reputation which also includes its code of conduct, financial strength and success in the marketReliable technical problem solving ability, related to product/process at customer site
Proactive approach towards developing forward looking application with the customer
Ability to share relevant market information (eg: market trends, new innovation & applications) with the customers
Ability to deliver consistent product quality from batch to batch
Reliability
Capability to SupportGrowth
Flexible Payment Term
Company Image
Relationship Management
Customer Service
Product Stewardship
Quality
Supply Reliability
Optimized Product Portfolio
Process Ability
Company Image
Technical Service –Trouble Shooting
Joint Application Development
Provision of Market Intelligence
Consistent Product to Specification
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EBITafter costof capital
EBIT
Costof capital
Contri-butionmargin
Fixed costs
Cost ofcapitalpercentage
Operatingassets
Sales
Variablecosts
Fixedassets
Currentassets
Sales
Variablecosts
Fixedassets
Currentassets
Value interface
CUSTOMERS VALUE DRIVER TREE
BASF
Customer
Revenue Increase
Cost/ Risk Reduction
Lever to influence
performance
Remember the ultimate reason for innovation: Customers want to improve their value drivers
Value driver
Value driver
Value driver
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Value drivers
INSTRUCTIONS EXERCISE
10 min
• Get together in your table groups • Choose one example (BASF product/ service) from
your daily business • Identify how this offering affected the customer’s
value drivers • Discuss how these drivers influenced the
customer’s costs and revenue • Briefly present where the offering hit the customer’s
value tree
Identify value drivers and their influence on the customer‘s value tree
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Improve a business by applying the Value Innovation Approach
INSTRUCTIONS
Redesign the selected business into something differentiated, that adds more value for your customer!
EXERCISE
• Choose a business example to work with in the next sessions
• Either work on your impact group topic or• Choose a BASF example from your own
business background (another product or offering)
• Get together in groups according to your topic• Create your group's business working
environment
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What does the As-is Value Curve look like?
INSTRUCTIONS EXERCISE
45 min
• Split your group into two and define Principle factors for your selected business taking into account the customer’s perspective:
• Brainstorm and create a list with all relevant factors that determine the buying decision
• Narrow it down to the 6 - 8 most important factors• Get together with the other half of your group again and consolidate
your findings: agree on 6-8 final Principal factors and phrase these on an operational level
• Draw a strategy canvas on a flipchart, add your Principal factorsand rate the relative offering level (from the customer’s perspective!) on a scale from 1 to 5, where 3 represents the industry standard
• Draw the As-is Value Curve for your selected business. Do the same for one selected competitor
• Be prepared to present your findings
Define the right Principle factors and draw your As-is Value Curve
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• As-is Value Curve is a visualization of our current offerings based on inside out view of customer requirements
• The As-is analysis has to be robust because mistakes in the early stage can bias the further process
• Customer requirements need to be translated into Principal factors (factors have to be formulated in a precise and differentiated way, taking the customer’s point of view into account)
Key messages
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How does the 6 path framework connect As-is and To-be Value Curves?
What should be kept in mind when identifying Principal factors to be Eliminated, Reduced, Raised or Created?
Key questions of this session
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Across strategicgroups
2
Across the industryvalue chain
Across complemen-tary offerings
4
Across alternativeindustries
1
Across functional oremotional appeal
5
Across time & trends6
3
Create Reduce
Raise
Eliminate
To-beValue Curve
Use 6 Path framework to develop ideas beyond common market boundaries
• Systematic exploration along 6 main search Paths
• Central question:Which Principal factors can be– Eliminated– Reduced– Raised– Created
OVERVIEW
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Look across alternative industries
Source: C. Kim and R. Maubourgne
PATH 1
Value Curve for short haul travel
High
Low
Rel
ativ
e le
vel o
f offe
ring
Car
Meals Lounges Seatingclasschoice
Hubconnec-tivity
Friendlyservice
Speed Frequentdepartures
Principal factors
Existing airlines
• Southwest Airlines did not benchmark with other airlines
• Car was identified as the Next best alternativecompetitor
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Guiding questions for looking across alternative industries
PATH 1: POTENTIAL QUESTIONS TO ASK YOURSELVES
1. What industries / segments do I sell into?
2. What are the applications of my product at the customer?
3. What is the function of my product in my customer’s product?
4. Which alternatives / substitutes exist in my step in the value chain that fulfil the same function or purpose? Substitute technologies, substitute products, …
5. What are the differences between my products and the substitutes/ substitute offerings? What are the UVPs? What are the advantages and disadvantages?
6. What advantages or functions could my product / offering provide as well? Would that be a value added for the customer or the value chain?
7. Which substitutes exist within the next steps of value creation?What are the UVPs, advantages and disadvantages?Could my offering provide these or similar functions and would that be a value add?
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Looking across alternative industries
PATH 1: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
What are and what could be substitutes?
Would you think of a substitution and why? Why not?
What functions do the other technologies provide that are advantageous? What is their UVP?
Which functions could your product provide as well? Would they add value?
What are the disadvantages of the substitutes?
Do you see any substitutes for your product or the end product today or in the future? For which substitute do you see largest potentials?
How do you rate your product compared to each of the possible substitutes?
How could you increase your performance in order not to be substituted? How could your product effect that development?
Main goal: What can I learn about technologies and products threatening my position or my customer’s position? What can I learn from these substitutes to improve my offer?
What are and what could be substitutes?
Would you think of a substitution and why? Why not?
What functions do the other technologies provide that are advantageous? What is their UVP?
Which functions could your product provide as well? Would they add value?
What are the disadvantages of the substitutes?
Do you see any substitutes for your product or the end product today or in the future? For which substitute do you see largest potentials?
How do you rate your product compared to each of the possible substitutes?
How could you increase your performance in order not to be substituted? How could your product effect that development?
Main goal: What can I learn about technologies and products threatening my position or my customer’s position? What can I learn from these substitutes to improve my offer?
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Look across strategic groups
PATH 2
Value Curve for Curves Women Health Club
• Curvesanalyzed the strengths of 2 typical strategic groups in the health club industry
• Therefore Curves built on the decisive advantages of the two groups and eliminated or reduced everything else
High
Low
Rel
ativ
e le
vel o
f offe
ring
Ameni-ties
Workoutequip-ment
Workouttime
Avail-abilityof in-struc-tors
Environ-ment en-couragingmotivation
Conven-ience
Womanlyatmos-phere
Same-Sex environ-ment
Strategic group 1: Home ExercisePrograms
Strategic group 2: TraditionalHealth Clubs
Source: C. Kim and R. Maubourgne
Principal factors
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The process of defining strategic groups
PATH 2
How can strategic groups be defined?
• Choose two competitive dimensions that describe the key strategic decisions companies can make in the market, e.g.– Price– Specialization– … your suggestions?
• Plot firms into a matrix based on these two dimensions
• Repeat the process with different dimensions until differentiated patterns (i.e. different strategic groups) emerge
Com
plet
e bu
ndle
Onl
y po
wde
r
Local Global
= most interesting areas
Example
24
13
• Inver• Frei
• BASF• DuPont• PPG
• Akzo
• Jotun• R+H• Teknos
Com
plet
e bu
ndle
Onl
y po
wde
r
Local Global
= most interesting areas
Example
24
13
• Inver• Frei
• BASF• DuPont• PPG
• Akzo
• Jotun• R+H• Teknos
Com
plet
e bu
ndle
Onl
y po
wde
r
Local Global
= most interesting areas
Example
24
13
• Inver• Frei
• BASF• DuPont• PPG
• Akzo
• Jotun• R+H• Teknos
Com
plet
e bu
ndle
Onl
y po
wde
r
Local Global
= most interesting areas
Example
24
13
• Inver• Frei
• BASF• DuPont• PPG
• Akzo
• Jotun• R+H• Teknos
Onl
ypo
wde
rco
atin
gsP
owde
r& o
ther
coat
ing
tech
nolo
gies
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Guiding questions for looking across strategic groups
PATH 2: POTENTIAL QUESTIONS TO ASK YOURSELVES
1. How do I cluster my competition into strategic groups?
2. What are the differences among the clusters? (Inside-out focus)
3. What advantages or functions could I also provide? Would that be added value for the customer or for the value chain?
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If you think of all the suppliers in your industry, do you recognize any fundamental differences among them?Do you perceive these different players as groups of companies showing strategically similar patterns? Who is different from the rest?
Are there other differences among these strategic groups?
Do your customers (or non-customers) prefer purchasing from one of these groups? Why?
Who is your customers’ favourite / best supplier? What makes him stand out from the rest? Services? Quality? Speed? Price?
Why do your customers buy from him?
What are the requirements the supplier has to meet? What does the offer look like? Who would be a serious alternative?
How do suppliers meet these criteria overall and who does this exceptionally well and how?
How does BASF perform on these criteria?
If you think of all the suppliers in your industry, do you recognize any fundamental differences among them?Do you perceive these different players as groups of companies showing strategically similar patterns? Who is different from the rest?
Are there other differences among these strategic groups?
Do your customers (or non-customers) prefer purchasing from one of these groups? Why?
Who is your customers’ favourite / best supplier? What makes him stand out from the rest? Services? Quality? Speed? Price?
Why do your customers buy from him?
What are the requirements the supplier has to meet? What does the offer look like? Who would be a serious alternative?
How do suppliers meet these criteria overall and who does this exceptionally well and how?
How does BASF perform on these criteria?
PATH 2: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
Looking across strategic groups
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Develop ideas for your To-be Value Curve
INSTRUCTIONS EXERCISE
Use the Paths in order to develop innovative offerings
• Get together in the working teams for your impact group topic oryour business example
• Brainstorm Alternative industries for exploring Path 1 and possible dimensions for a strategic group analysis
After 10 minutes briefly present your findings in plenary
• Afterwards think of innovative ideas based on alternative industries
• Conduct a strategic group analysis for your case and deduce innovative ideas from this analysis
• Decide which principal factors you could ERRC in your case and put them into the ERRC-grid
• Be prepared to share your findings 60 min
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Look across alternative industries to find new ideas
PATH 1: ALTERNATIVE INDUSTRIES WORKING TEMPLATE
Alternative industries:Functions
of substitutes:
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PATH 2: STRATEGIC GROUP ANALYSIS
...
...
... ...
Looking across strategic groups
1. Choose two competitive dimensions:
Specialization
Price
Quality (needs to be further specified)
Vertical integration in value chain
Complexity of distribution channels
Product line breadth
Technological or R&D leadership
Brand identification
Capacity utilization
Sales, margin or EBIT
Local, regional or global setup
Ownership structure
2. Plot firms into the matrix based on these two dimensions
3. Repeat step 1 & 2 with different dimensions until differentiated patterns (i.e. different strategic groups) emerge
WORKING TEMPLATE
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INSTRUCTIONS EXERCISE
Discuss how to use today’s concepts in your daily work
• Discuss in your table group:
• Which of today's concepts are applicable for your daily work?
• How would you use them?
• Complete the notes you took during the day on your transfer handout
• Regarding the topics covered today - think about what it means for you to be a change agent
15 min
Focus on transfer
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EDG looked across the chain of buyers
• EDG's main customer for super-absorbents used in diapers is the Consumer Goods Industry (CGI)
• The players in this industry focused on developing diapers that were as thin as possible, to save costs and presumably fulfill the needs of end customers (mothers)
• EDG looked across the chain of buyers and asked the end consumers (mothers) directly what they needed
• It turned out that the majority of mothers was not interested insuch thin diapers
• EDG used this information to create a more focused offering to the CGI including value based prices
Super-absorbents
BASF EXAMPLEPATH 3
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4 steps are required to conduct a value chain analysis (1/2)
PATH 3: STEPS IN A VALUE CHAIN ANALYSIS
•Number of players / concentration
• Growth• Trends …
• .••••
• .••••
Depict the "steps" of the value chain
1
Highlight key market characteristics and
customer needs
3
Identify the key players involved per
step
2 • Key Player a• Key Player b• Key Player ...•
• Key Player m • Key Player n• Key Player ...•
• .•••
• .•••
• .•••
• .••••
• .••••
Step 1 Step 2 Step ...
To validate your results you have to talk to people along the value chain.
Customer’scustomer
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4 steps are required to conduct a value chain analysis (2/2)
The profit pool depicts how the overall industry revenue is shared among the different steps of the value chain.
Depict the "steps" of the Value chain
1
Highlight key market characteristics and
customer needs
3
Identify "profit pools" per step
4
Identify the key players involved per
step
2
Operating margin (in %)
0
5
10
15
20
25
Share of industry revenue(in %)
Auto manufacturing
Used car dealers
Auto loans
Gas-oline
Leas-ing
War-ranty
Auto insurance
Ser-vice re-pair
After mar-ketparts
Auto rental
New car dealers
100%
PATH 3: STEPS IN A VALUE CHAIN ANALYSIS EXAMPLE
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Various parties are involved in the construction industry value chain
Chemical raw materials
Construction materials producer
CM* wholesalers
DIY* stores
Construction companiesCraftsmen
Commercial constr.
Public constructionResidential constr.
Architects
Key players
• Maxit• Readymix• HeidelbergCement• …
• OBI• Praktiker• Hornbach• Hagebau• Toom• …
Construction:• Hochtief• Holzmann• Bilfinger+BergerCraftsmen:• Fragmented, local
market..
• N/A• BASF• …
Key market characte-ristics
• Fragmentation• Constant margin
pressure• Trends towards
branded products
• Fragmentation• Cyclical business• "Commoditization"'
• DIY stores become increasingly important
• Focus on selection and service recently also increasingly on price
Construction companies• Few large and
several mid-sized companies
• Due to over capacities extremely competitive (e.g., stagnating prices since 1995)
• Constantly declining demand in all 3 sectors
VALUE CHAIN ANALYSIS – CNT BASF EXAMPLEEnd customers
* Construction materials; not further investigated here, Do it yourselfSource: Industry Sector Management
Europe, perspectives
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Architects have been identified as key decision makers and are now targeted more explicitly
VALUE CHAIN ANALYSIS – CNT
Architects
General responsibility
• Architects are the key decision makers that plan and are involved in the whole construction process
• They are responsible for all technical, economic, and design-oriented specifications in the planning of a building
Decision criteria*
• Of high importance are optical/haptical and technical features as well as brand/image
• Price and durability are also important criteria
Level of involvement in "life cycle"
• High level of involvement in all phases of the construction
Coordination w/other parties involved
• Central coordinators and decision makers• Most often hired directly by the customer/client• Make suggestions about construction system to the
customer/client• May select construction material producer and define exact
specifications for important construction systems
Chemical raw materials
Construction materials producer
CM* wholesalers
DIY stores
Construction companiesCraftsmen
Commercial constr.
Public constructionResidential constr.
Architects
Due to their central decision-maker and coordination role, architects are now being targeted more explicitly via e.g., workshops and focus groups
BASF EXAMPLE
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Develop ideas by exploring the market
INSTRUCTIONS EXERCISE
• Get together in the groups for impact group topic or your business example
• Conduct the following 2 steps according to Path 3:
– Conduct a value chain analysis for your case and identify potential ideas for a value offering along the industry value chain
– Based on your findings think of innovative ideas that you could ERRC for your case
• Add these ideas to the ERRC-grid
• Present your results using the "Human Value Chain"
Use Path 3 in order to develop innovative offerings
60 min
"Human Value Chain"
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Four steps are required to conduct a value chain analysis
PATH 3: VALUE CHAIN ANALYSIS
• . ••••
• .••••
• .••••
Depict the "steps" of the value chain
1
Highlight key market characteristics and
customer needs
3
Identify "profit pools" per step
4
Identify the key players involved per
step
2 • .•••
• .•••
• .•••
• .•••
• .•••
• .••••
• .••••
The profit pool depicts how the overall industry revenue is shared between the different steps of the value chain.
WORKING TEMPLATE
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1. What are the steps of the value chain?
2. What are the key market characteristics and customer needs?
3. Who are the key players per step?
4. What are the profit pools per step?
5. Who are the influencers at the different steps of the value chain?
Guiding questions for a value chain analysis
PATH 3: QUESTIONS TO ASK YOURSELVES
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What exactly does the value chain look like?
Who decides about specifications? Who decides about supplemental technologies? Buyers? Deciders? Influencers?
How much value is created in each step of the value chain? Are there significant differences between the players at each step? What could be the reasons for these differences?
Are there unmet needs that you would be eager to satisfy?
Do you see future changes in the existing market value-chain for your product?
What are the challenges for the players further down the value chain?
What exactly does the value chain look like?
Who decides about specifications? Who decides about supplemental technologies? Buyers? Deciders? Influencers?
How much value is created in each step of the value chain? Are there significant differences between the players at each step? What could be the reasons for these differences?
Are there unmet needs that you would be eager to satisfy?
Do you see future changes in the existing market value-chain for your product?
What are the challenges for the players further down the value chain?
Looking across the industry value chain
PATH 3: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
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version 6.0
Source: C. Kim and R. Maubourgne
Value Curve for Barnes & Noble
• Barnes & Noblerealized the lack of differentiating factors in bookstores
• As a result they integrated café & lounge areas into their mega-bookstore, provided a wide book selection, and extended the store hours
High
Low
Rel
ativ
e le
vel o
f offe
ring
PATH 4
Knowledge-able staff
Selectionof books
Storeambience
Storehours
Mall Bookstore
Independent Bookstore
Café &loungearea
Look across complementary products & services
EXAMPLE
Principal factors
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Disposal
Look across complementary activities & products to identify customer needs
COMPLEMENTARY ANALYSIS CONSISTS OF FOUR STEPS
1. Key activities in the buying cycle
Quality management
Additional service
Use ofproductPurchasing
2a. Dream points
3. Possible solution/ Complementary offering
4. Potential partner for this at customer / BASF?
Pre-Sales
2b. Pain points
Where to get lowest price?
Call center
Lean purchasing dept.
Customer has no SAP system
E-shopprovides easy order process
In-house training too expensive
Trained people needed
Customer training center
“RATIO repair shop": spot repair set
BASF EXAMPLE
Body shop check:process optimization
Fast & easy repair of spot damages
Inefficient processes
Source: ECR
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1. Ask your customer to guide you through the touch points he experiences with you or your product.
2. Find out what his dream or pain points are and discuss possible solutions with him.
3. What are the key activities in the buying cycle?
4. What possible solution could we offer?
5. Who would be the right partners for this at customer/ BASF?
Guiding questions for a complementary analysis
PATH 4: QUESTIONS TO ASK YOURSELVES
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Looking across complementary offerings
What is the “experience cycle” of your customers with BASF and its products? Where in the value chain are your customers in contact with you and your products?
Go through the entire process from sales call to product disposal or claims. What could BASF do to improve his process?
Who are the contact persons on both sides?
What are your dream points and pain points in this experience cycle?Which points of interaction in particular work very smoothly and which ones create problems for you?
Dream points: What could be done even better?
Pain points: Serious problems, e.g. handling, quality etc. (Here you can find out about opportunities for improvement.)?
To gain insight into how to improve your offer, talk to your customer about any problems connected with his every day job
Which complementary offering could solve the issues that you discovered above?
What is the “experience cycle” of your customers with BASF and its products? Where in the value chain are your customers in contact with you and your products?
Go through the entire process from sales call to product disposal or claims. What could BASF do to improve his process?
Who are the contact persons on both sides?
What are your dream points and pain points in this experience cycle?Which points of interaction in particular work very smoothly and which ones create problems for you?
Dream points: What could be done even better?
Pain points: Serious problems, e.g. handling, quality etc. (Here you can find out about opportunities for improvement.)?
To gain insight into how to improve your offer, talk to your customer about any problems connected with his every day job
Which complementary offering could solve the issues that you discovered above?
PATH 4: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
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Look across complementary activities & products to identify customer needs
PATH 4: COMPLEMENTARY ANALYSIS WORKING TEMPLATE
1. Key activities in the buying cycle
2a. Dream points
3. Possible solution/ Complementary offering
4. Potential partner for this at customer / BASF?
2b. Pain points
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• Swatch transformedthe functionally driven budget watch industry into an emotionally driven fashion statement.
• At the same time, Swatch dramatically reduced manufacturing costs, so it became unattractive for competitors to copy their innovation.
Value Curve for Swatch
High
LowManu-facturingcosts
Productquality
Fashion& design
Newcollect-ions
Brand image
Asian competitors
Reliability
Look across functional or emotional appeal
Rel
ativ
e le
vel o
f offe
ring
Principal factors
PATH 5 EXAMPLE
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1. What elements that you are currently offering to your customers are functional? (e.g. product specification, terms of delivery)
2. What elements are emotional? (e.g. branding, loyalty programs, packaging)
3. Which functional elements can be turned into emotional elements? (e.g. co-branding)
4. What new emotional elements could you add to your current offering?
Guiding questions: looking across functional or emotional appeal
PATH 5: QUESTIONS TO ASK YOURSELVES : FOCUS ON PRODUCT
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1. Identify all relevant buying cycle stages (e.g. pre-sales, purchase, delivery, use, supplements, maintenance and disposal) of your market and think about the following questions:
2. At which stage are the biggest blocks to......fun and image?...convenience?...environmental friendliness?...risks?
3. After locating the biggest blocks go one step further: What innovative ideas can you derive from these insights?
Guiding questions: looking across functional or emotional appeal
PATH 5: QUESTIONS TO ASK YOURSELVES : FOCUS ON BUYING CYCLE
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What are the functional elements of your current offering to your customers:Product/service specificationsTerms of deliveryetc.
What are the emotional elements?BrandingLoyalty programsLocation of productionetc.
Which functional elements can be turned into emotional elements?
What new emotional elements could you add to your current offering?
What are the functional elements of your current offering to your customers:Product/service specificationsTerms of deliveryetc.
What are the emotional elements?BrandingLoyalty programsLocation of productionetc.
Which functional elements can be turned into emotional elements?
What new emotional elements could you add to your current offering?
Looking across functional or emotional appeal
PATH 5: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
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Look across functional or emotional appeal
PATH 5 WORKING TEMPLATE
1. Key activities in the buying cycle (copy from previous exercise)
2. At which stage are the biggest blocks to...- fun and image- convenience- environmental
friendliness- risks?(please check)
3. After locating the biggest blocks go one step further: What innovative ideas can you derive from these insights?
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Develop ideas by exploring the market
INSTRUCTIONS EXERCISE
• Get together in the working teams for your impact group topic oryour business example
• Conduct the following 2 steps according to the Paths 4 and 5:
- Find out the key activities in the buying cycle, your customers’dream & pain points, as well as solutions for them or
- Based on functional and emotional appeal, search for innovative ideas along the buying cycle steps you identified
• Based on your findings think of innovative ideas that you could ERRC for your case
• Add these ideas to the ERRC-grid and be prepared to share your findings
70 min
Use the Path to develop innovative offerings
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The four elements of a PEST Analysis help to look across time and trends
Political
What are political drivers of governments and regulation authorities impacting the project‘s task?
Economical
Social
What are social trends such as demographic and cultural aspects impacting your business?
Technological
In how far do technological factors impact your business in terms of entry barriers, efficiency and productivity?
What are economical drivers impacting purchasing power and habits making this project necessary?
Answering these questions helps to identify the drivers for a project and related motivation for change
PATH 6: ELEMENTS OF A PEST ANALYSIS
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Develop ideas by exploring the market
INSTRUCTIONS EXERCISE
• Get together in 4 working teams
• For your selected factor discuss in your group potential elements or aspects of this factor that might be influencing your business
• Collect these aspects on the flipchart and indicate how they could influence your business/ IG project (positive/ neutral negative)
• Be prepared to briefly present your findings and explain how the different aspects could influence your work
(In the Business case session later this day you will have the chance to use the PEST analysis for your IG topic) 10 min
Have a look at political, economic, sociocultural and technological factors in your market
Political
… +
… 0
… -
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1. Discuss the trends you identified with your customer or other players (see target group)
2. How does your customer see these trends? What other trends does he see?
3. Working jointly with your customer, identify trends and how to capitalize on (or overcome) them.
Guiding questions for looking across time and trends
PATH 6: QUESTIONS TO ASK YOURSELVES
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Before talking to your customer, identify trends you see that you want to discuss with him.
What could be major trends related toDemandTechnologyRegulationCompetitive situation / industry situation
What major business and market trends are challenges for your company right now? What do these trends mean for you?
How does your customer intend to respond to these trends?
How will they impact your customer’s business?
More important, how could you help your customer to succeed in this developing market?
Goal: Search for opportunities to work jointly with your customer to identify trends and capitalize on them or overcome them.
Before talking to your customer, identify trends you see that you want to discuss with him.
What could be major trends related toDemandTechnologyRegulationCompetitive situation / industry situation
What major business and market trends are challenges for your company right now? What do these trends mean for you?
How does your customer intend to respond to these trends?
How will they impact your customer’s business?
More important, how could you help your customer to succeed in this developing market?
Goal: Search for opportunities to work jointly with your customer to identify trends and capitalize on them or overcome them.
Looking across time and trends
PATH 6: POTENTIAL QUESTIONS TO ASK YOUR CUSTOMERS
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Validate your hypotheses with your customers
INSTRUCTIONS EXERCISE
• Get together in the working teams for your impact group topic or your business example
• Brainstorm different approaches to validate the hypotheses regarding your customer needs that you developed
15 min
Collect approaches to validate your findings
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perspectivesoffering
Potential methodsProcess stepsTarget
-Customer surveys-Conjoint Analysis-Customer Interviews-Customer Workshops-Prototyping
-Focus Groups/ Target Groups-Mixed questionnaires (qualitative/ quantitative)-Customer Workshops-Crowd sourcing
-6 Paths-I2I-Ideo-Delphi-Expert polls-Customer Workshops-Trend scouting
- Validate your hypothetical To-be Value Curve with your customer
IDEA Validation
- Test the hypotheses you generated using the 6 paths
IDEA Testing
- Develop new principal factors
- Identify which factors to ERRC
IDEA Generation
Various tools can be used for validating your hypotheses with your customers
SOLUTION HANDOUT
BMLIGsAWs
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The BASF Business Model Lab
Business Model Lab (BML) is the structured support for the definition and execution of innovation and growth projects.
BML: focuses on stimulation of innovation in the area of business models (esp. Customer Interaction Approach)
BML: accelerates the successful launch of growth ideas into business impact.
Business Model Lab vs. Impact Group
BMLs are special Impact Groups. The BMLstructure and methodology is used by teams that work on:
larger scale innovation and growth projects
Therefore the Impact Groups receive comprehensive project coaching, workshop moderation and project guidance.
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The BASF Business Model Lab –helps you along the journey from red into blue ocean
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Supporting tools:
Step 1: Interview preparation
– Develop interview questions– Practice interviews– Schedule Interviews
Step 2: Conduct interview
Step 3: Document interview
Step 4: Meeting of each Path team
– Discuss findings from market exploration– Structure business ideas
Step 5: All-team meeting
– Exchange findings– Structure business ideas– Prepare presentation for workshop II
– Interview guide– External interview trainer– Interview tracker
– Weekly conference call (optional)
– Templates for interview notes & golden nuggets
– ERRC Grid
– ERRC Grid– Templates for value innovation Ideas
Next steps:
Process of the market exploration and supporting tools
PROCESS ACCORDING TO BUSINESS MODEL LAB
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IdeaCreation Tool I2I – Ideas to Impact
SELECTED TOOLS 1/3: I2I
Source: BrainStore – Biehl, Switzerland
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Key Learnings for conducting customerworkshops
Do not underestimate the lead time needed to get thecustomer to agree to a date.
Customer Workshops should last minimum 2,5 hrs
Involve project lead in all customer workshops (cross-regionally)
The more cross-functional participants on customer side, the more reliable the output of the customer workshops
Develop thorough storyline, before sales approach customers for workshop
SELECTED TOOLS 2/3: CUSTOMER WORKSHOPS
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• What do customers really want?
• What are the most important/decisive needs of the market?
• Is there a willingness to pay for certain service/product offers?
• Do all customers have the same requirements?
• How is BASF positioned compared to competition?
• Where are the strength/weaknesses of BASF/most important competitors?
Objectives of Conjoint Study:
To understand how choices are madeby customers/ non-customers
To define key To-be characteristics of product/ services (Value Curves)
To identify opportunities for differentiation from competitors
Conjoint Studies represent a solid base for identifying customer needs and willingness-to-pay
SELECTED TOOLS 3/3: CONJOINT ANALYSIS
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• The 6 path framework helps to identify Blue Ocean opportunities from different and unusual perspectives.
• Different methods can be applied in the 6 path
• Identified opportunities allow us to apply the ERRC
• It is important to keep in mind cost-to-serve for Raising or Creating Principal factors as well as identify internal and external barriers when Eliminating or Reducing factors.
Key messages
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What are the major challenges to develop a To-be Value Curve?
What are the major advantages of a sound To-be Value Curve?
What are important steps to implement a To-be Value Curve?
Key questions of this session
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INGREDIENTS OF A GOOD UVP
A UVP is a specific promise of the benefits provided to target customers that differ from competitors at an explicit price
What will customers get?
Why should these customers buy it from you?
Characteristics of a goodUVP
• Addresses the full array of customers' needs –beyond product features alone
• Provides an easy means for the customer to distinguish the company from its competitors
• Gives the customer a clear idea of the price that they are paying for the benefitsUVP = a specific promise of the benefits provided to target
customers that differ from competitors at an explicit price
• "Unique"• "Value"
How much is it? Which customers will get it and how?
• "Propo-sition"
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Create an innovative presentation of your To-be Value Curve
Develop a Unique Value Proposition for your offering
• Get together in your table group• Develop a To-be Value Curve for your selected offering:
– derive up to 8 principal factors from the ideas you posted to the ERRC grid and
– adjust their relative offering level on your strategy canvas: keep in mind customer needs and willingness to pay, cost-to-serve and reluctance to change, and strategic targets
• Phrase the UVP of your offering. Refer to the value your offering level of the Principle factors creates for the customer
• Develop a flipchart with your To-be Value Curve and your UVP: reorder your Principle factors to create an S-shaped To-be curve (start on the left with the factors you plan to eliminate/ reduce and sort to the right the factors you are going to raise or create)
• Be prepared to present your findings
INSTRUCTIONS EXERCISE
30 min
Group #
Unique Value Proposition
Additional information
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• The To-be Value Curve is a representation of a targeted offering that meets identified customer needs.
• It is essential to validate the defined Principal factors and respective offering levels with the customer/non-customers and other value chain players and identify the willingness-to-pay
• The relation between willingness-to-pay and cost-to-serve has to be balanced for targeted offering levels. Furthermore, we have to identify whether we have the capabilities to fulfill ourcustomer needs.
• Necessary changes to implement the To-be offering have to be discussed and business rules as well as a standardized information and communication policy has to be implemented.
Key messages
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How could a To-be Value Curve bevalidated with the customers?
How can you ensure that customers appreciate the value of attending your Visual fair?
How do you incorporate the feedback of your customers in your final offering?
Key questions of this session
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Visual fair of potential To-be Value Curves – An effective way to get your customer’s attention
MAJOR STEPS OF VISUAL FAIR
Ideas developed through market exploration are presented on posters
Participants (e.g. customers, non-customers, colleagues from other BUs, project team members)challenge and discuss ideas
Participants vote for their favorite ideas and give feedback
Based on economic evaluation & feasibility management decides which ideas to pursue further
End of Visual fair
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Make sure that the customer sees value in attending your visual fair
How would you ensure a customer attends the visual fair?
• Get together in your group and discuss how to conduct a visual fair for your offering (target group, invitation process, scope, …)
• How can you get the attention of customers/ noncustomers?
• What can you do to ensure that (potential) customers attend the visual fair? Consider the following questions:
– Whom from the customer side would you invite?
– How would you invite the customer?
– How would you ensure that the customer perceives the value add of participating in your customer event?
– What possible objections might they have and how could you overcome them?
• Present your findings (max. 5 mins)
INSTRUCTIONS EXERCISE
10 min
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Conduct the visual fair
Visual fair preparation
• Get together in your group and prepare the visual fair • Define how you would assess the outcome of the visual fair and
include your customers’ feedback in your final To-be Value Curve • Select one presenter to introduce your potential To-be Value Curve
and UVP (5 mins)• In a next step define a certain customer segment within your market
and draft a specific, execution focused Value Curve for this target group (e.g. specify factors if necessary, change their weighting and offering level, consider the costs to serve for these adjustments)
• Pick one factor you would E or R and another you would R or C and devise Business rules for each of these
• Have a second presenter introduce this VC and the respective Business rules (5 mins)
INSTRUCTIONS EXERCISE
30 min
Eliminate / Reduce Raise / Create
To-be
As-is
Relative
offering level
Principal
factors
Eliminate / Reduce Raise / Create
To-be
As-is
Relative
offering level
Principal
factors
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• Plan your visual fair carefully and take enough time to prepare the event.
• Communicate the value add for the participants to ensure their attendance.
• Find the right balance between presenting your ideas and asking open questions to discover unmet needs.
• Make sure to consider any feedback you receive in the future design of your offering and customer interaction process.
Key messages
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• What is the role of analysis tools and a Business case?
• What are the main elements of a business case?
• How is the value innovation approach linked to the BASF PhaseGate process?
Key questions of this session
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The Business Case for innovation projects needs to cover four basic elements
Market• Main Customers• Market Segment• Market Growth• BASF Market Share• BASF Volume• BASF Prices• BASF Sales• Competitors• Customer Benefit • Business Model
Technology• Technical Feasibility• Production Cost• Investment• Patent/ Licensing• Raw Material • Safety/Health/
Environment• Registration/
Toxicology
Profitability• NPV• Probability of
Success
General• Goal• Strategic Fit • Team• Gates• Timing
ELEMENTS OF BUSINESS CASE
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Business Context and Challenge: Industry Environment – Porter’s Five Forces
Overall industry profitability is determined by the relative power of these five forces
Degree of RivalryHow do you evaluate
the overall rivalry in the
specific business field?
Supplier PowerWhat is the pressure your business faces from the supplier landscape and how does this impact the project task?
Customer PowerTo what extend does the power of your customers change and what does that mean for your business / project?
To what extend does your business experience the threat of new competitors in the market?
Barriers of Entry
Substitute ThreatsTo what extend do potential substitution products and services threaten the business and what does that mean for your project?
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StrengthsStrengths: attributes of the organization that are helpful to achieving the objective.
WeaknessesWeaknesses: attributes of the organization that are harmful to achieving the objective.
OpportunitiesOpportunities: externalconditions that are helpful to achieving the objective.
ThreatsThreats: externalconditions which could do damage to the business's performance.
The SWOT Analysis displays strengths, weaknesses, opportunities and threats collected in different analyses
Identifying internal Strength and Weaknesses and external Opportunities and Threats: SWOT – Analysis 1/2
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Comparing Strength and Weaknesses with Opportunities and Threats: SWOT –Analysis 2/2
Strengths
How do I use these strengths to take advantage of these opportunities?
Weaknesses
How do I overcome the weaknesses that prevent me taking advantage of these opportunities?
How do I use these strengths to reduce the likelihood and impact of these threats?Thre
ats How do I address the
weaknesses that will make these threats a reality?
The Enhanced SWOT Analysis helps to deduce strategies from different combinations of strengths, weaknesses, opportunities and threats
Opp
ortu
nitie
s
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Analyze your business context and challenges
Analyze the environment of your IG project
• Get together in your group and take a closer look at your business environment
• Use the provided working templates to either conduct a
• PEST-Analysis or a
• Porter’s Five Forces Analysis or a
• SWOT-Analysis
for your Impact Group topic (take a few minutes to decide which adds the most value to your project at this point in time)
• Identify potential influences, e.g.: impacts on your cost position, anticipated gain in market share (topline impact) and likely reactions from your competitors (substitution)
• Be prepared to briefly present your findings
INSTRUCTIONS EXERCISE
20 min
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Business Context and Challenge:Macro Environment – PEST Analysis
Political drivers:
Social trends:Technological factors:
Economical drivers:
WORKING TEMPLATE
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Supplier Power
Substitute ThreatsCustomer Power
Barriers of Entry
WORKING TEMPLATE
Business Context and Challenge: Industry Environment – Porter’s Five Forces
Degree of Rivalry
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Strengths:
Threats:Opportunities:
Weaknesses:
WORKING TEMPLATE
Identifying internal Strength and Weaknesses and external Opportunities and Threats: SWOT – Analysis 1/2
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Strengths & Opportunities:
Weaknesses & Threats:Strengths & Threats:
Weaknesses & Opportunities:
WORKING TEMPLATE
Deriving strategies from combining Strength and Weaknesses with Opportunities and Threats: SWOT – Analysis 2/2
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Business Model Lab business case template: Business Case Framework.xls
BUSINESS CASE TEMPLATE
Source: BML
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The team presents the project results to the BU leadership
Outcomes:
•Final prioritization
•Alignment of ideas
•Decision on next steps by BU leadership
VISUAL COMMUNICATION
Content of presentation:
•Validated As-is Value Curve
•Business ideas including
-To-be Value Curve
-Business case
-Targeted customer segments
-Concept paper
Source: BML
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Phase 4Pilot Phase
Phase 3Lab Phase
Phase 2Business
Case
Phase 1Opportunity
FieldsPhase 5Launch
Gat
e 1
Gat
e 2
Gat
e 3
Gat
e 6
Gat
e 4
Gat
e 5
After the visual communication the idea would be suitable to submit into phase 2 of the PhaseGate process
VALUE INNOVATION APPROACH LINKS TO PHASEGATE
€$¥ £
The business format youwork on in the
Accelerator Workshops is the actual Business Case you submit in the
PhaseGate process
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Where you can find more information about PhaseGate and perspectives
perspectives Intranet http://perspectives.internal.basf.com
BASF INTRANET LINKS
BASF Innovation Chainshttp://www.innovationsketten.basf-ag.de
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• In depth analyses of your business environment provide the basis to develop a sound business case
• The business case helps you to screen your ideas through quantitative evaluation
• In the visual communication workshop you present your ideas to management
• The PhaseGate process assesses the ideas found with the Value Innovation Approach
Key messages
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INSTRUCTIONS EXERCISE
Discuss how to use today’s concepts in your daily work
• Discuss in your table group:
• Which of today's concepts are applicable for your daily work?
• How would you use them?
• Complete the notes you took during the day on your transfer handout
• Regarding the topics covered today - think about what it means for you to be a change agent
15 min
Focus on transfer
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Prepare your visual communication
Present your Impact Group project to get the approval from your sponsor
• Prepare with your Impact Group for your visual communication
• Recap all the information you collected during the last two daysusing the different perspectives tools (e.g. Value Curves, 6 paths, business environment analyses)
• Plan your information gathering and types of analyses that you will conduct for your IG project including: analysis of the market, exploration of industry dynamics, customer needs and derive a hypothesis of the unique value proposition (UVP)
• Use the time to work in your group on the most important aspectsbefore going into the visual communication session
• Prepare a 10 minute presentation outlining target and scope of your project, timeframe and estimate potential financial impact, your approach as well as the anticipated customer benefits
INSTRUCTIONS PROJECT WORK
210 min
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Based on your customers’ needs – define which principal factors to ERRC
Eliminate Reduce
Raise Create
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Business Context and Challenge:Macro Environment – PEST Analysis
Political drivers:
Social trends:Technological factors:
Economical drivers:
WORKING TEMPLATE
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Supplier Power
Substitute ThreatsCustomer Power
Barriers of Entry
WORKING TEMPLATE
Business Context and Challenge: Industry Environment – Porter’s Five Forces
Degree of Rivalry
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Strengths:
Threats:Opportunities:
Weaknesses:
WORKING TEMPLATE
SWOT – Analysis 1/2 – Identify internal Strength and Weaknesses and external Opportunities and Threats
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Strengths & Opportunities:
Weaknesses & Threats:Strengths & Threats:
Weaknesses & Opportunities:
WORKING TEMPLATE
SWOT – Analysis 2/2 – Derive strategies from combining Strength and Weaknesses with Opportunities and Threats
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Headline: Description of impact group task...
Source: perspectives
Business challenge/context...
1
Targets to be achieved and criteria for (financial) success/KPIs...
3
Scope of solution space and constraints...
2Tools/frameworks...
6
Process/milestones/team...
5
Support needed/ information sources...
7
Deliverables…
4
Project Plan – Document and discuss your approach to achieve the desired project results
Other stakeholders...
8
• Specific• Measurable• Attainable• Relevant• Time-limited
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Sample Workplan – Define working packages, timelines and responsibilities
EXAMPLE
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Let’s see whose project approach gets approved…
PRESENTATION
IGproject:
Go
No go
Refine
• After lunch you will have 10 minutes to introduce your project
• 2 members of your group – randomly selected – will present your approach in plenary
• Decide in advance “who you are going to present to” and tell the audience who they are representing
• The audience will evaluate your presentation according to predefined criteria. Afterwards the audience will challenge yourpresentation and vote whether your approach would be given a
• Go/ No go/ Refine decision and
• Recommend further To dos
• Use this session as actively as possible to practice your presentation and gather valuable feedback for your project!
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Practice your visual communication
Present your Impact Group project
• Present your IG project outlining target and scope of your project, timeframe and financial impact, your approach as well as the customer benefits (UVP)
• Sell your project and your approach as well as possible to get the approval from your IG sponsor
• After your presentation use the chance to question the audience on what they liked about your presentation and what recommendations they would give
• Those who are not presenting – take notes of the feedback to incorporate later into your presentation
INSTRUCTIONS PRESENTATION
10 min
Evaluation criteria:
Passion and enthusiasm
Project target and scope
Outline of project approach
Timeframe
Financial impact
Anticipated customer benefits
Evaluation criteria:
Passion and enthusiasm
Project target and scope
Outline of project approach
Timeframe
Financial impact
Anticipated customer benefits
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Connecting the dots…
Customer Needs
Willingness to pay
?!Customer Interaction Models
Customized solution provider
Product/process innovator
Standard package provider
Lean/reliable basics supplier
Trader/transactional supplier
Value chain integrator
To-be
As-is
Relative offering
level
Principalfactors
Factor 1
Factor n
Industry standard
What will customers get?
Why should these customers buy it from you?
• "Unique"• "Value"
How much is it? Which customers will get it and how?
• "Propo-sition"
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Reflect on this Accelerator Workshop and share your learnings and ideas with the audience
• Complete the „Take-away“ templates you received on the last two days
• In your groups reflect your key learnings and ideas that you collected during the sessions
• Afterwards share your findings in plenary
• Take the following questions into consideration:
– How will I be a change agent in my BU?
– How will I execute the concepts I learned in this workshop?
– Which elements can I use to strengthen/ help my Impact Group topic?
INSTRUCTION EXERCISE
Share your key learnings and ideas
20 min
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CIM(s) in your BU –How would you know?
CIM (%) Alignment of your BU with the CIMs (refer to the preread you receive for AW 2)Recent visible changes in your BU (business rules, organizational changes, …)
HOMEWORK
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What’s next?!
perspectives is…
Global! Continuously growing! Focusing on customer orientation …
So how is my BU involved?
You will see the work on the topics in your daily working life! It‘s a continuing change process …
So what does it have to do with me?
It is the responsibility of everybody to identify optimization potential and communicate it to help our customers be more successful!
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Get more information about perspectives
Marketing & Sales Glossary
perspectives brochure
Intranet: http://perspectives.internal.basf.com
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Get more information about perspectives
Marketing & Sales Glossary
perspectives brochure
Intranet: http://perspectives.internal.basf.com
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Complete checklist tasks to capture maximum value out of perspectives
RECOMMENDED TO-DOS
Deepen Network
Access Impact Group profiles on perspectives Intranet to find topic-related Impact Groups
Foster knowledge exchange with other Impact Groups
Define actions to build and maintain your Impact Group Network
Gather further information
Download AW material from perspectives Intranet
Download Marketing & Sales Glossary (incl. templates) from perspectives Intranet
Check perspectives newsletter for updates on working materials, news and networking
Boost Impact Group work
Download Marketing & Sales Glossary working templates for your Impact Group work
Schedule first coachingsession
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Closing thoughts
• Look for opportunities to apply skills you have learned and to develop new business ideas
• Build on the relationships you have developed during the last three days and continue to grow your network
• Stretch outside your comfort zone
• Become an expert and share your learnings with your colleagues
THANKS - have a good trip home!