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IdeasandStrategyPRESENTATIONTO***BUSINESSPLANCOMPETITIONPARTICIPANTSAT-CZG002-120199Coyne-MSTRTodayDevelopinganideaAssessingyourideaDescribingyourstrategyAcoupleofwrinkles2AT-CZG002-120199Coyne-MSTRDevelopinganideaWhybrainstormingusuallyfails3frameworksProducttrees4killerquestionsThe5Csmodel3AT-CZG002-120199Coyne-MSTRUnexpectedusersHeavyusersPotentialusersblockedbyoneobstaclePotentialuserswhodifferinonewayfromcurrentusersCreativebundlingtoeliminatecomplementsRadicaldistortionsofkeyvalueequationcomponentsNewusesforexistingproductsNewusersforexistingproductsNewwaystomeetexistingneedsStimulatingnewneeds...radicallymodifyexistingproducts...generateradicalincreasesinexistingproductsales...developnewproductsSearchforkillerproductideasbyexploringopportunitiesto...Productideatree4AT-CZG002-120199Coyne-MSTRWhatwouldittaketomakemyproductathalfthecost?RadicaldistortionofkeyvalueequationcomponentsCanIreducebyhalfordoublemydistributioncost?CouldIoffermyproductat5timesthecostifithadgreaterfeature/function?CouldIdoublemyproductdepthorcutbreadthinhalf?Whatinput,ifreducedbyhalfthecost,wouldallowmetocutmyprice20%?QuestionExistingexampleSouthwestAirlinesPCclonesPersonalshopperMailorderPremiumicecreamPetSmartBabySuperstoreZincinbatteriesLow-ratecreditcardsforhigh

creditratingPotentialidea6packsofsingle-use,lightweight,disposableumbrellasDiscountrealtorsAbankwithhomecashdeliveryHomedecoratorsuperstoreIndustrialpawnshopforsmallbusinesslendingProductideatree5AT-CZG002-120199Coyne-MSTR1. Whatisthebiggesthassleaboutthisproduct?Forwhatsubgroupofusers...Forwhatsubgroupofusages...Etc.2. WhatdotheBatmanmovie,rollerblades,andBenandJerry’shaveincommon?3. HowwouldIdothingsdifferentlyifIhadperfectinformation?4. Wherearethesearch,orderentry,andtrackingcostsalargepercentageoftotalcosts?4killerquestions6AT-CZG002-120199Coyne-MSTRRawmaterialsuppliersVolumeCostsConcentratesurplusfromsuppliers2CostsCompeteforsurplus1ClientOEMCostsConcentratesurplusfromchannels2RetailerCapturesurplusfromcustomers3PriceCooperateto

capturesurplus5Createnewdemand4The5Csmodel7AT-CZG002-120199Coyne-MSTRTodayDevelopinganideaAssessingyourideaHowpowerful?Howlarge?DescribingyourstrategyAcoupleofwrinkles8AT-CZG002-120199Coyne-MSTRCreateanewstandardofperformancethatpreviouslywasnotrecognizedasimportantbutbecomesoneofthecriticalbuyingfactorsforatargetmarketInvent:createanewstandardAcceleratepaceofinnovationinacriticalperformancedimensionby

3-5yearsInnovate:radicallyimprovean

existingimportantstandardUnique

performancePerformanceenhancement9AT-CZG002-120199Coyne-MSTR * ComparedtoTheGap ** ComparedtoIBMandCompaqPercentbelowcompetitors50502020HomeDepotAmazonStaplesOfficeDepotOldNavy*CompUSADell**Gateway**CommodoreAmericaWestPeopleExpressE-PlusOrangeMobilcomRetailersPCmanufacturersAirlinesTelecomIomegaZipDriveOtherAverage

pricediscounts

of30-45%20-5020-8040503040-5050-7060-7030-5020-3015Price-basedvaluepropositionsmustofferextremediscounttomarket10AT-CZG002-120199Coyne-MSTRPrimaryeffectsSecondaryeffectsEstimatingmarketsize11AT-CZG002-120199Coyne-MSTRTodayDevelopinganideaAssessingyourideaDescribingyourstrategyAcoupleofwrinkles12AT-CZG002-120199Coyne-MSTRAstrongbusinessconcept...WheretocompeteHowtocompete...drivingareinforcingbusinesssystemDeliverCommunicateDescribingyourstrategy13AT-CZG002-120199Coyne-MSTRProductrangeTargetcustomersChannelsGeographyWheretocompete14AT-CZG002-120199Coyne-MSTR“Thecompellingreasonwhythetargetcustomershouldbuyyourproductinsteadofalternatives”Valueproposition“Whycompetitorscannotcopyyouonceitisobviousyouaresucceeding”Sustainablecompetitiveadvantage+Howtocompete15AT-CZG002-120199Coyne-MSTRReinforcingbusinesssystemProvidethevalueDesignproduct,processProcure,manu-factureDistributeServicePriceSalesmessageAdver-tisingPromotion,PRCommunicatethevalue16AT-CZG002-120199Coyne-MSTRTodayDevelopinganideaAssessingyourideaDescribingyourstrategyAcoupleofwrinkles17AT-CZG002-120199Coyne-MSTRRealvalueAbsoluteresourcescarcityTruenetworkexternalitiesFalsevalue“Controllingthespace”Howvaluableisthefirstmoveradvantage?18AT-CZG002-120199Coyne-MSTRLevelsofrolloutaggressivenessHigh(“Bigbet”)Low(“bootstrapper”)ReplicatorScalerLocalNationalNatural

businessscaleEstablishpresenceinmanylocalmarketssimultaneouslyTargetrelativelylargepercentageofnationalmarketfromtheoutsetEstablishpresenceinlocalmarketorregion,thenmoveontothenextInitiallytargetsmallpercentageofnationalmarket,thenattempttoincreasescale“Serialreplicator”“Sneakyscaler”“Bigbang”“Blitzkreig””4primarymodelsexistforrollout19RiskVelocityofgrowth(inagivenyear)FunctionofManagementcapacityCapitalavailableAbilityofcompanytoreplicateskillsPhysicalavailabilityofscarceresourcesQualityofmanagementdecisionmakingFunctionofExtentof““crowding”––howcloseareyourcompetitors?Scaleadvantages–whenyoudorunintocompetition,howmuchscale/marketcaptureisnecessarytowin?Capturingscaleresources–aretherealimitednumberofkeyscarceresources(e.g.,scientists,storelocati

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