El Paso Companies has as much potential as those in San Francisco or New York. Our city has a lot more to offer than you could imagine – in most cases all you have to do is be willing to ask. In this article, Blue Pearl Bookkeeping and Tax of El Paso TX will increase your chances of success with a very simple strategic effort that you can put into place right now and see results tomorrow.
Entrepreneurs need to build their strategy in the sequence order of :
- Buyer utility
This allows new business owners to build a viable business model and ensure that a company profits from the blue ocean it is creating. W. Chan Kim and Renée Mauborgne argue that with an understanding of the right strategic sequence and of how to assess blue ocean ideas against the key criteria in that sequence, companies can dramatically reduce business model risk and ensure that both the company and its customers win as it creates new business terrain.
We want to elaborate on Value Innovation with an example that should suffice to give you a clear strategic starting point to help you better target your audience and grow your sales through efficient business processes and marketing efforts.
Henry Ford As A Value Innovation Case Study
- Addressing Buyer Utility: Henry Ford didn’t ask customers what they wanted. He saw a need for better transportation and then worked hard to define what “better” meant. He worked hard to reach an exceptional value as far as utility. Ask yourself: will my service be like everyone else’s? Will you eliminate what client’s don’t really want or need? Is there something missing from my competitors that clients do want but can’t easily or affordably get?
- Exceptional Price: Henry Ford wanted to make cards available to the mass market which instantly told him he needed to have a car that the working class could afford, but not sacrificing the exceptional value that would help him sell. Mr. Ford didn’t move onto mass manufacturing until he knew exactly what price point he needed to reach and then looked into ways of achieving that price. As history shows us, his answer was mass manufacturing through a production line. Ask yourself: Are existing customers generally happy? Are they recurring or 1 time customers for your competitor? Is the price so high because of so much overhead? Can you reduce certain costs that can help you eliminate pricing hurdles?
- How can you reduce your business operating costs? And NO!! The answer is NEVER passing that cost to the customer (think processing machines, waiters and waitress wages, etc) Why should a patron pay for a tool or service that you need to make your business happen? Doesn’t sound fair, does it? How do you think your customers feel? Charging your customers the ‘convenience fee’ is a shady trick sales people who push these machines tell you as the business owner to make their selling pitch easier. Not something that should be done. Henry Ford was able to go viral with his vehicles because he took the responsibility of everything in his business – didn’t pass any costs to buyers or employees. If anything he paid them more, paid for housing, gave bonuses, offered free night time GED School – essentially creating the first company culture minded startup and thus creating amazing products that were simply answering the biggest problems potential customers and employees had. Ask yourself: Will the people of El Paso avoid my restaurant if they know ahead of time of my sucharge for using what is normal to everyone nowadays – their debit card!? Do they feel like I’m charging them for the lights and water bills for my building?Can I eliminate it or simply assume it as part of doing business a.k.a. my responsibility? Reduce and control your costs always trying to reduce burden while increasing value to your customers. Value is not always in the product itself but in the overall experience, they receive, what if they are already looking to change providers because of a single thing you do. ALWAYS innovate on value by reducing cost responsibilities not passing them on to someone else.
- For Henry Ford, mass adoption and virality happened for his product because he had a low priced mass produced car that had ONLY the features it needed to be competitive based on what people wanted while maximizing his own profits which he used to increase features and power in later models. If you have a good product that answers exact pain points for an exact population you will be set for success. Below is chart flow that you can follow as you work your way through value innovation.
Value Innovation Workflow
Do you have tax or financial strategy questions? Get in touch!