RE-INVENTING VALUE PROPOSITIONS

Abstract

While many managers face the challenge of lower profits in increasingly competitive and commoditized industries, a few firms break out as market value leaders generating superior growth and shareholder returns. How do these firms break out of the commoditization trap? In this paper we propose these firms invent unique value propositions and offer them in superior ways to their customers. Based on our study of a number of market leaders, we provide a framework for systematically understanding and re-inventing the firm's value propositions. We propose that clearly understanding and defining the dimensions of a firm's value proposition is a critical first step in building an effective strategy.