6.3 Growth Implications for Value Categories

In alphabetical order, here is a generally comprehensive list of the key growth strategy implications from the seven value categories in the 3-Circle framework:

• Area A: Defend and build. The chief goal is to enhance and enlarge Area A relative to Area C by building distinctive attributes and benefits for which we have a unique capability or identity, in a manner focused on target customers.
• Area B: Maintain and defend the foundation. There are core attributes and benefits (table stakes) that you must deliver as effectively as competitors do to even be in the game.
• Area C: Shore up your value (i.e., neutralize competitors’ advantage) where it is cost-effective and strategy-consistent to do so. Certain deficits in Area C may provide an opportunity to improve our value proposition by neutralizing and perhaps exceeding the competitor’s advantage. Alternatively, live and let live.
• Areas D, E: Correct negative value, eliminate or reduce unwanted attributes, better communicate, or find new capabilities. These are areas with multiple dimensions for which there are a variety of growth strategy directions.
• Area F: Improve upon and exploit the competitor’s unique deficiency. This is a strategic decision, but it holds the possibility of improving your offering’s value position by helping customers discover more about what is legitimately wrong with the competitor’s offering.
• Area G: Continually seek unmet needs. There are ways in which the white space can be explored in a structured and disciplined manner. The exploration provides a means of uncovering potentially new sources of value that can substantially improve customers’ connection with the firm’s offering.

Here, we will cycle through these ideas, expanding upon them and introducing a number of illustrations. An important point here is that there is a logical sequence or order with which one should evaluate growth opportunities. We are going to suggest a series of strategic growth options—questions that will prompt a concrete look at a number of potential ideas for growing the value customers receive that will enhance and strengthen the firm’s overall position. We always need to keep in mind the simple value formula and the goal: to enhance that overall value by recognizing that the firm might improve either numerator or denominator:

$${\text{value}}_{\text{j}}\text{ =}\frac{{\text{benefits}}_{\text{j}}}{{\text{cost}}_{\text{j}}}\text{.}$$

We will walk through each of the imperatives and strategic growth opportunities, one at a time. We will occasionally refer to “numerator” ideas, which are ideas to build and enhance benefits. “Denominator” ideas are those related to reducing customer costs—either direct costs or effort costs.