The full title of this often overlooked strategy book by Shiv Mathur and Alfred Kenyon is
“Creating Value: Shaping Tomorrow’s Business“.
In my review at Amazon.co.uk, I rated this book as worthy of Five Stars. This means it is Excellent and Very Highly Recommended to appropriate readers.
Here is my book review.
A highly original look at how to differentiate products
This book could be the best strategy book you’ve never heard of.
It’s a fiercely original intellectual work which will challenge many of the traditional ways of thinking about business strategy. Unfortunately both authors have died so it can’t be updated beyond the second edition but Creating Value has lots of insight for any business strategist and especially anyone who is interested in differentiation.
It’s not the easiest of reads because it is so challenging to the mind.
The key concepts are:
1) The focus on the single product offering as the focus for competitive strategy since it is the individual product the particular customer will select or reject from the choice of alternative offerings.
2) The emphasis that the objective of competitive strategy is to win preference from target customers. Positioning therefore depends on customers views of the offering. This may be as indistinguishable from others or different to some degree.
3) The rejection of public markets and the focus on private markets. Customers define the competitive alternatives and each customer is likely to have a slightly different version of products under consideration or rejected as inappropriate. The implication of this is that your competitors in the minds of your customers may not be who you think you are competing against and that brings with it plenty of issues about why you may win or lose the purchasing decision.
4) Differentiation can be established along different dimensions – support and merchandise. Support is the way the supplier helps the buyer to choose, obtain and use the offering. Merchandise are all the other differentiating features. While your product may be a standard commodity, anything can be differentiated along the support dimension.
This creates four main competitive strategies:
i) commodity buy – low support, low merchandise
ii) service buy – high support, low commodity
iii) product buy – low support, high merchandise
iv) system buy – high support, high merchandise
Mathur and Kenyon then split support into two categories – personalisation or expertise – and merchandise into two more categories – content or aura. Combining all these dimensions creates 16 permutations for differentiation which will appeal to different customers or at different times and situations.
5) The fifth big concept is that markets constantly flux between more and less differentiation so each of the four main types of differentiation may dominate at some time in the life-cycle.
Highly recommended for helping you to think through the big ideas of creating value. To help you to focus on how you can work out how to deliver these new forms of customer value, I’ve always liked the value chain approach from Michael Porter’s book Competitive Advantage.
This isn’t a book for a typical business owner or even business advisor or senior manager of a large business. You need a deep interest in strategy and plenty of knowledge to appreciate how different the approach in this book is to conventional strategy.
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