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Improve your existing value proposition(s) without radically changing or affecting the underlying business model(s). ǃɲ Renew outdated products and services. ǃɲ Ensure or maintain fit. ǃɲ Improve profit potential or cost structure. ǃɲ Keep growth going.

161

In between: Extend A common situation in the ImproveInvent spectrum is the need to find new growth engines without investing in substantial changes to the existing business model. This is often required to monetize investments in existing models and platforms.

ǃɲ Address customer complaints. 0 to15 percent annual revenue increase or more (caveat: company-specific)

The objective is to search for new value prop-

Low

ositions that substantially extend the existing

High

underlying business model, without modifying too

Little change

many aspects of it.

requires a substantial expansion of Amazon.com's business model. customer segment. Builds on existing key resources and activities but Design of a new IT infrastructure value proposition targeted at a new Examples Main Activities Design Approach Mindset Attitude to Failure Business Model

Amazon Web Services Search, test, and evaluate

of Amazon.com. Introduce a membership with special benefits targeted at frequent users Amazon Prime Refine, plan, and execute

Radical/disruptive change to value proposition (and business model)

Incremental change and tweaks to existing value proposition

Open to exploring new possibilities

Focused on making one or several aspects better

Part of learning and iteration process

Not an option

Requires radical adaptions or changes

Little change

Customer Knowledge

Low, potentially nonexistent

High

Risk and Uncertainty

High

Low

Financial Goals

At least 50 percent annual revenue growth (caveat: company-specific)

0 to15 percent annual revenue increase or more (caveat: company-specific) ǃɲ Address customer complaints.

Helps With

ǃɲ Response to a disruptive value proposition of a competitor

ǃɲ Keep growth going.

ǃɲ Emergence of a game-changing technology, regulation, etc.

ǃɲ Improve profit potential or cost structure.

ǃɲ Take on a crisis

ǃɲ Ensure or maintain fit.

ǃɲ Proactive bet on the future

ǃɲ Renew outdated products and services.

may define other constraints). Objective

by existing value propositions and business models (although leadership

or affecting the underlying business model(s).

Design new value propositions regardless of the potential constraints given

Improve your existing value proposition(s) without radically changing

Not an option

For example, with the introduction of the

Focused on making one or several aspects better

Kindle, Amazon created a new channel to extend

Incremental change and tweaks to existing value proposition

its digital offering to Amazon.com customers.

Refine, plan, and execute

Although this presents a great new value proposi-

Amazon Prime

tion to its customers, it remains to a large extent

Introduce a membership with special benefits targeted at frequent users

within the parameters of its successfully estab-

of Amazon.com.

lished and well-mastered e-commerce business model. Tip Great companies manage a portfolio of value propositions and business models that cover the entire invent-improve spectrum and make synergies and competitive conflicts explicit. They are proactive and invent while they are still successful, rather than wait for a crisis.

STRATEGYZER.COM / VPD / DESIGN / 2.6

improve

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