Creating Value : Shaping Tomorrow’s Business Today by Shiv Mathur and Alfred Kenyon 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.
Review of Creating Value by Shiv Mathur and Alfred Kenyon
Unfortunately both authors have died but Creating Value has lots of insight for any business strategist and especially one who is interested in differentiation.
It’s not the easiest of reads because it is challenging to the mind.
Key Concepts From Creating Value
First is 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.
Second is 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.
Third 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. For an example of how this works, please read What Are You Doing On Saturday Night?
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.
Fourth differentiation can be established along different dimensions – the 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 the product itself may be a standard commodity, anything can be differentiated along the support dimension.
This creates four main competitive strategies:
- commodity buy – low support, low merchandise
- service buy – high support, low commodity
- product buy – low support, high merchandise
- system buy – high support, high merchandise
In Creating Value , Mathur and Kenyon then went on to split support into two categories:
And merchandise into two more categories
Combining all these dimensions creates 16 permutations for differentiation which will appeal to different customers or at different times.
The fifth big concept from Creating Value is that markets constantly flux between more and less differentiation so each of the four main types of differentiation may dominate at some time.
Have You Read Creating Value?
If you’ve read Creating Value, I’d love to know what you think about it.
Paul Simister is a business strategy coach who helps business owners to differentiate their businesses and develop winning strategies. Get your free copy of the ebook The Six Steps Profit Formula.
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