Tuesday, July 31, 2012

Rethinking the Product Launch
Your customer value proposition is the key to organic growth — for a fast-food chain like Wendy’s, or for any other consumer business.
by Max Cuellar, Leslie Moeller, and Heberto Molina


Some interesting approaches for ideation. This example was for Wendy’s in the Quick Service Industry but they would work for all businesses

If you could consistently drive organic growth, how much would that be worth? Quite a lot, especially in mature industries where the customer base isn’t growing much and people are habitually loyal to their favorite brands. For many companies interested in growing their markets by launching new products or services, having a framework for organic growth based on a better customer value proposition could make all the difference…. 
….Many companies try to “bottle lightning” when launching new products or services. Either they base their decisions on their own executives’ hunches or they create a disciplined process that siphons the creativity and speed out of the organization. But neither approach leads to sustainable success. Those companies that beat the odds and succeed with multiple new-product launches, time after time, tend to apply a certain type of discipline. This discipline involves three separate practices, combining creative inspiration and analysis. Each of these three practices is both a “thought starter,” raising new concepts about directions for growth, and an “idea filter,” helping a team decide which products and services to launch and how to position them. The three practices are: 
1. Market-back analysis: an approach to gathering consumer insights that pinpoints the value consumers assign to different parts of a product or service, and produces actionable intelligence as a result. Wendy’s, for example, would have to look at its potential customers, the attributes they value in quick-service restaurants, and the needs that are still unmet. 
2. Darwinian competitive review: a close observation of the customer value propositions that have been shown to work across multiple markets, and the competitors who have already established themselves in those spaces. Within the fast-food restaurant landscape, Wendy’s would consider the track record of mainstream and niche contenders around the globe. It would also look for non-QSR models and innovations that might be adjusted for its business. 
3. Capabilities-forward assessment: a dispassionate look at what the company already does well, and which new value propositions its capabilities system could support. If your company has a notable form of prowess, it behooves you to understand what other products or services that capability might help deliver. For instance, if your kitchen setup excels at producing made-to-order hamburgers, might that flexibility also be extended to new entrees, side dishes, beverages, and desserts?

Tuesday, July 24, 2012

Parsing the growth advantage of emerging-market companies
Surprisingly little of their edge is attributable to starting from a smaller revenue base. They also seem to invest more, allocate resources more fluidly, and spot fast-growing segments.
MAY 2012 • Yuval Atsmon, Michael Kloss, and Sven Smit


Some real “food for thought”. Read the full article.

Leaders of multinational companies are by now well aware of the growth potential that emerging-market consumers represent, an opportunity that we estimate could exceed $20 trillion annually by the end of this decade… 
… One striking finding was that companies headquartered in emerging markets grew roughly twice as fast as those domiciled in developed economies—and two and a half times as fast when both were competing in emerging markets that represented “neutral” turf, where neither company was headquartered…. 
…. It is impossible to definitively disaggregate the sources of the remaining growth differential. However, the following three factors appear to be materially different for these two classes of companies: 
Higher reinvestment rates. Emerging-market companies paid dividends at a lower rate than developed-market companies, returning only 39 percent of earnings to shareholders, while developed-market companies returned close to 80 percent…. 
Agile asset reallocation. Additionally, we found that on average, emerging-market companies have been reallocating capital toward new business opportunities more dynamically than those headquartered in developed economies… 
….. Growth-oriented business models. Emerging-market companies generally serve the needs of fast-growing emerging middle classes around the world with lower-cost products. Developed-economy companies tend to rely more on brand recognition while targeting higher-margin segments, which are relatively smaller and thus less likely to move the needle on the companies’ overall growth rates. 

Tuesday, July 17, 2012

Measuring marketing’s worth.

MAY 2012 • David Court, Jonathan Gordon, and Jesko Perrey
Source: Marketing & Sales Practice


I strongly recommend you read the full summary!!

You can’t spend wisely unless you understand marketing’s full impact. Here are five questions executives should ask to help maximize the bang for their bucks 
1. What exactly influences our consumers today?
The digital revolution and the explosion of social media have profoundly changed what influences consumers as they undertake their purchasing decision journey.2 When considering products, they read online reviews and compare prices.
2. How well informed (really) is our marketing judgment?
Marketing has always combined facts and judgment: after all, there’s no analytic approach that can single-handedly tell you when you have a great piece of creative work. A decade ago, when traditional advertising was all that mattered, most senior marketers justifiably had great confidence in their judgment on spending and messaging. Today, many privately confess to being less certain
3. How are we managing financial risk in our marketing plans?
Successful communication requires hitting the right audience with the right message at the right time: a small, moving target. With traditional media, marketers have mitigated the risk of failure through years of trial and error about what makes great advertising. That’s not the case with today’s new media.
4. How are we coping with added complexity in the marketing organization?
As the external marketing environment becomes more complex, so must the internal environment. Marketers historically had only a handful of communication vehicles; now they have dozens of them, and the number is growing rapidly.
5. What metrics should we track given our (imperfect) options?
In an ideal world, the financial returns and the ability of all forms of communication to influence consumers would be precisely calculated, and deciding the marketing mix would be simple. In reality, there are multiple, and usually imperfect, ways to measure most established forms of marketing. Nothing approaches a definitive metric for social media and other emerging communication channels, and no single metric can evaluate the effectiveness of all spending.

Tuesday, July 10, 2012

Leading Through Connections

This is a brief summary of an IBM Global CEO study (1700 CEO’s across 18 industries and 64 countries). Go to ibm.com/ceostudy2012 for the full study.. it is GREAT!!!

“This is now a continuous feedback kind of world, and we need the organizational nimbleness to respond.” (CEO, Financial Markets, United States)

For some time, businesses have been refining and optimizing their networks of suppliers and partners. They’re streamlining supply chains and creating massive back-office efficiencies. But something just as meaningful has been happening in the marketplace—the sudden convergence of the digital, social and mobile spheres—connecting customers, employees and partners in new ways to organizations and to each other. These changes put pressure on the front office to digitize and adapt but also create opportunities for the organization to innovate and lead. 
“How do you unleash the innovative power of the people who deal with your customers every day?” (CEO, Insurance, United Kingdom)CEO’s are creating more open and collaborative cultures—encouraging employees to connect, learn from each other and thrive in a world of rapid change. The emphasis on openness is even higher among outperforming organizations—and they have the change-management capabilities to make it happen. As CEOs open up their organizations, they are not inviting chaos. The need for control remains, but it is evolving into a new form—one better suited to the complexity and pace of business today. 
Of course we need better information and insight, but what we need most is the capability to act on it.” (Unit Head, Government, Hong Kong SAR)As a group, CEOs are investing more in customer insights than any other functional area—far above operations, competitive intelligence, financial analysis and even risk management. They are seeking a better understanding of individual customer needs and improved responsiveness. Although face-to-face will remain the most prevalent form of customer interaction, CEOs expect a step-change in the use of social media. Given the need for deep customer insight, outperformers have a distinct advantage. They are far more adept at converting data into insights, and insights into action. 
In our industry, the biggest risk we face is not regulatory mandates, as many think. It’s industry disruption…” (CEO, Retail, United States)The pressure to innovate is not subsiding, and organizations are teaming to meet the challenge. Compared to their less successful peers, outperformers are partnering for innovation more aggressively. But they are also tackling more challenging and disruptive types of innovation. Instead of settling for
simply creating new products or implementing more efficient operations, they’re more likely to be moving into other industries or even inventing entirely new ones.
 “We tend to see everyone as a competitor, but we need to see them as partners…this is a cultural shift; it’s hard to change.”(CEO, Banking, Vietnam)
With nearly 70 percent of CEOs aiming to partner extensively, what will make this a differentiating strategy?


Monday, July 09, 2012

With Tablet, Microsoft Takes Aim at Hardware Missteps
SEATTLE — Around the time the iPad came out more than two years ago, Microsoft executives got an eye-opening jolt about how far Apple would go to gain an edge for its products.


We hear a lot about the power of the connected world re true partnerships of “eco systems” to deliver the best and most innovative offerings to customers. HOWEVER, recent business model success strongly suggest that in building a strong relationship between a supplier and its customers, particularly if aspects of a strong brand are involved, someone has to be the true owner to CONTROL all aspects of the offering. The classic struggle between Microsoft and Apple business models is a clear example:

Microsoft learned through industry sources that Apple had bought large quantities of high-quality aluminum from a mine in Australia to create the distinctive cases for the iPad, according to a former Microsoft employee involved in the discussions, who did not wish to be named talking about internal matters. 
The executives were stunned by how deeply Apple was willing to reach into the global supply chain to secure innovative materials for the iPad and, once it did, to corner the market on those supplies. Microsoft’s executives worried that Windows PC makers were not making the same kinds of bets, the former employee said. 
The incident was one of many over the last several years that gradually pushed Microsoft to create its own tablet computer, unveiled last week. The move was the most striking evidence yet of the friction between Microsoft and its partners on the hardware side of the PC business. It is the first time in Microsoft’s almost four-decade history that the company will sell its own computer hardware, competing directly with the PC makers that are the biggest customers for the Windows operating system.... 
...“ You've got this sclerotic partnership structure where the partners don’t have any oxygen to be innovative,” said Lou Mazzucchelli, an entrepreneur in residence for a venture capital fund backed by the state of Rhode Island and a former technology analyst. “I believe Microsoft was painted into a corner. If they’ve didn’t move soon, Apple would have so much of a lead, it would be almost impossible to catch them.”.... 
....Microsoft worked with other hardware partners to devise products that would be competitive with the iPad, but it ran into disagreements over designs and prices. “Faith had been lost” at Microsoft in its hardware partners, including by Steven Sinofsky, the powerful president of Microsoft’s Windows division, according to the former Microsoft executive.