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| Preface | |
| Acknowledgments | |
| The Growing Challenge from Low Cost Competitors | |
| The Challenge is Real and It is Here to Stay | |
| Retailing | |
| Airlines | |
| Banking | |
| Fast-moving consumer goods | |
| Consumer electronics | |
| Business-to-business products and services | |
| In Many Industries the Major Threat is Coming from Asia | |
| Many Customers Prefer Good Enough Products and Services | |
| Low Cost Competition Is Not All Bad News | |
| Understanding and Responding to the Challenge of Low Cost Competition | |
| Why the Threat from Low Cost Competition is Intensifying | |
| Value Propositions Have Three Core Elements | |
| Performance value | |
| Price value | |
| Relational value | |
| One core value proposition is usually emphasized | |
| The relative size of the different value segments may evolve over time | |
| Product category life cycles are getting shorter | |
| The Traditional Integrated Business Model is Disintegrating | |
| Three core processes underpin any business | |
| Giving balanced attention to all three core processes can lead to conflict | |
| Companies are leveraging the specialized players | |
| Companies with focused business models are playing a much bigger role in many industries | |
| Many more companies are opening their business models | |
| But there are significant risks in relying more on strategic partners | |
| Total solution coordinators are helping some companies leverage these networks | |
| Growing Support for Low Cost Competitors | |
| Low cost entrants sometimes have powerful supporters | |
| Customers are increasingly willing to buy from low cost players | |
| Challenge Questions | |
| Understanding How Low Cost Competitors Play the Game | |
| Ryanair | |
| Performance has been outstanding | |
| Value proposition is crystal clear | |
| Business model is innovative and focused | |
| Extreme focus on cost control | |
| Created a virtuous cycle | |
| So far . . . so good | |
| ING DIRECT USA | |
| Borrowed with pride | |
| Appealing value proposition | |
| Early success | |
| Competition finally responds and ING DIRECT raises the stakes | |
| Learning from Low Cost Competitors | |
| Question every element of the traditional business model | |
| Have very simple and straightforward value propositions | |
| Avoid complexity at any cost | |
| Break through the communication clutter | |
| Be a cost innovator | |
| Remember that the customer is not always right | |
| Have the courage to drop prices significantly below competition | |
| Traditional Players Can Learn from Low Cost Competitors | |
| Challenge Questions | |
| Realistically Assessing the Threat | |
| Some Industries Are Less Vulnerable to the Low Cost Threat | |
| Why Companies Fail to Respond to the Low Cost Threat in a Timely Manner | |
| The low cost threat is underestimated | |
| The low cost threat often takes time to gain momentum | |
| Sometimes it is the second-order effects that have the biggest impact | |
| Realistically Assessing the Threat ... and the Opportunity | |
| "Beat my business" exercises can be a useful tool | |
| Identifying actual and potential low cost competitors is key | |
| Understanding what is driving the strategy of the low cost competitors | |
| Core capabilities, distinctive resources and major gaps are often key drivers of a low cost competitor's strategy | |
| Low cost competitors can overcome critical gaps in creative ways | |
| How might a low cost competitor significantly enhance its position? | |
| Low cost competitors often follow similar strategies to improve their position | |
| It is a challenge to anticipate the moves of unconventional competitors | |
| Most Business Models Have Limited Reach | |
| Developing a Worst Case Scenario Can Provide a "Burning Platform" | |
| Framing the Financial Analysis as a Comparison of Two Futures is Critical | |
| Challenge Questions | |
| Confronting Low Cost Competitors in the Price Value Segment of the Market | |
| Competing at All Levels in the Market is Usually Not Necessary | |
| The Challenge Decision Requires Thinking Through Many Issues | |
| Arguments for Entering the Price Value Segment | |
| "Good enough" products can meet a real market need | |
| Opportunity to engage price value customers and develop better solutions to their needs over time | |
| Opportunity to grow with customer as their strategies evolve | |
| May provide an opportunity for "up-selling" | |
| Gives traditional players some "control" over low cost competitors | |
| Arguments For Not Entering the Price Value Segment | |
| Conflicts with the traditional value proposition of the business | |
| Encourages cannibalization of high-end products | |
| Lacks resources and capabilities to successfully compete | |
| Value Chain Members Can Impact Decisions | |
| An Alternative Way to Provide a Price Value Solution to the Market | |
| Making the Decision in a Timely Manner | |
| Should the Price Value Business Be Independent? | |
| Integration has several potential advantages | |
| Advantages of independence often outweigh the advantages of integration | |
| Some Major Tactical Decisions | |
| Make versus buy | |
| Brand choice is a critical decision | |
| Developing new sales and distribution channels is often necessary | |
| Need to evolve channels over time | |
| Nokia Developed a Strong Position in the Entry Mobile Phone Segment | |
| Local Chinese competitors emerged quickly | |
| Nokia responded rapidly to the threat | |
| Nokia's results to date in the entry-level business have been very good | |
| Dow Corning Decided to Compete Aggressively for Price Seeking Customers | |
| Dow Corning faced a very tough situation in 2000 | |
| Dow Corning launched a new business unit | |
| And the strategy seemed to work well | |
| Aer Lingus Played a Price Value Game in a Different Segment | |
| Competing in Ryanair's home market | |
| A difficult balancing act between cost cutting and differentiation | |
| Some initial successes but is it sustainable? | |
| Challenge Questions | |
| Avoiding Head-to-Head Competition with Low Cost Competitors by Playing a Different Game | |
| Enhancing Performance Value | |
| Electrolux was not well positioned for the emerging market environment | |
| Electrolux responded to the challenge on multiple fronts | |
| Electrolux has made some progress but the challenges still loom large | |
| Maintaining Performance Leadership is a Challenge Today | |
| Rising costs and shortening windows represent a significant issue | |
| Using open business models can help | |
| Performance value leadership requires constant innovation | |
| Getting beyond the strategic breakpoint can create real competitive advantage | |
| Stressing Relational Value | |
| Orica was facing total commoditization of its core products | |
| Orica began moving toward providing solutions for its customers | |
| Orica leveraged its global leadership position to stay ahead | |
| Tesco built relational value in a mass-market | |
| Tesco combated the threat of the hard discounters by creating customer value | |
| Tesco also managed its costs very effectively | |
| Tesco is the clear leader in the UK and expanding aggressively into new markets | |
| Challenge Questions | |
| The Leadership Challenge | |
| Compaq Failed to Make a Successful Transition | |
| Meeting the Challenge of Low Cost Competition Often Requires a Corporate Transformation | |
| Numbers can support the need for change | |
| Building and Managing a Successful Price Value Business | |
| Product and service design challenge | |
| Marketing, sales and distribution challenge | |
| The cost control challenge | |
| Creating and Managing a Relational Value Business | |
| Designing an organization that will encourage building relational value | |
| Developing and using deep customer and market knowledge | |
| Inculcating a customer focused culture throughout the organization | |
| Building relational value is not a quick fix | |
| Challenge Questions | |
| An Even More Challenging Future | |
| Cost Innovation Must be Part of Everybody's Game | |
| The Threat From Low Cost Competition Will Intensify | |
| Traditional Companies Can Leverage Networks to Try to Stay Ahead | |
| Low Cost Competitors Face Their Own Challenges | |
| Anticipate Possible Future Competitive Moves and Proact | |
| Be Willing to Re-think Traditional Business Wisdom | |
| Put the Customer on Center Stage | |
| References | |
| Index | |
| Table of Contents provided by Publisher. All Rights Reserved. |
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