Imagine a new Value proposition


But the bakery Model remains a conventional one, whereas everything is changing around it.

The Baker would like to leverage new technological opportunities to make his Bakery Model more up to date.

As with a start-up Enterprise, we have to begin with the Value brought to the Customer in order to define a new Offer that can be a combination of several types of Product: Goods, Information and Services. Of course, it is equally in the Baker's interests to back what he already knows how to do.

The Baker knows his customers need to eat quickly in their lunch hour. He decides to develop a sandwich offer, prepared using his excellent bread and natural, fresh ingredients.

  1. Usage Value and Usability Value

    To avoid any misinterpretations, we propose distinguishing Usage Value from Usability Value:

    • The Usage Value is the value obtained by basic Functions of a Product: access emails via one's telephone is a new Usage Value
    • The Usability Value is attached to how easy it is to Use the Product: if the user email interface is complex, the Usage Value is positive, but its Usability Value is weak.
  2. Why look for a new Value proposition?

    Digital deeply transforms the Offers proposed to the Customer. The Values that the Customers expect, whether they are Individuals or Enterprises, are stable; but the way of satisfying them is changing fast. It is no longer enough to copy and improve, but to innovate deeply by proposing disruptive Products/Services. "It is not by improving the candle that we created the electric light bulb".
    We will give a few short examples. We can each add to this list according to our own observations.

    1. Information Products are in danger

      All enterprise models based on the Information Product are in danger today: new models are appearing.

      The music sector has been dramatically changed by iTunes and its successors. The global turnover for music went from 27 billion dollars to 22 billion between 2000 and 2012. Spotify uses a subscription-based model, but is testing a new model based on free music and advertising.

      The information sector is currently in crisis: press, television are confronted by the fact that young people do not consume information in the same way.

      The publishing sector is also in crisis: more than half of the books in the USA are today read on tablets; bookshop chains (Borders, Barnes and Nobles) are disappearing.

      Google uses a camera with a one gigapixel resolution to digitalize works of art and make them accessible to everyone with a degree of precision unavailable in the museums: what consequences will that have in the museums?

      Two sectors have not yet been impacted as greatly as they have more complex Models: education and health. But we can expect dramatic changes.

    2. Digital will dramatically change education

      • The extremely fast dissemination of Moocs ("Massive Open Online Courses") started in the United States in 2011 when Stanford university opened its first online lessons on artificial intelligence. The lessons are distributed free of charge on the Internet. Students can follow the lessons of the best teachers and obtain a certificate (payment required) at the end of the course. The learning is free, but the diploma has to be paid for. The consequence for the universities is a new revenue source in certification and an additional means of selection to identify the best students who they can then invite to their prestigious university. Lectures will gradually be done away with: why go to a lecture hall when you can stay at home and access, free of charge, when you want, the lessons from the best teachers? Teachers move towards question-and-answer sessions, practical work, case studies, in short, periods when the student becomes active. What remains is to find the economic Model: we will most likely have to go through the three unavoidable steps of Digital innovation. First, build the Offer and check its relevance, then generate volume and finally look for profitability, by making the students pay for the certificate at the end of the course, or through advertising, or by selling the lessons to other teaching organizations seeking to widen their offer, or developing continuing professional development courses with enterprises, or creating partnerships with education publishers... (see "Le Nouvel Economiste : La déferlante des MOOCs" Article in French: "The rush of MOOCs").
      • Providing each student with a computer enables him/her to access lessons (many in math, rarer in French or history) and exercises, to access knowledge via the Internet, to work in a group... Students' digital equipment: by equipping their pupils and teachers with computers, the Quebec district of Eastern Townships halved the number of pupils who left school with no qualifications: 22% of school children left school with no qualifications compared with 42% in 2002.

    3. Digital will dramatically change health

      An increasing number of remote diagnoses can be made today: the equipment is available, efficient and connectable.
      The length of hospital stays can be reduced in many cases without risk, provided that the home-care Service Offer is developed and that remote monitoring systems are properly operational. But to overhaul the Health Model, we need to make the many intervening parties agree, especially within the Civil Service who are not used to rapid Transformations. In particular, the question "who pays whom" is essential in achieving the economic balance of the system.
      This evolution will take us from curative medicine to preventive medicine, and this for the benefit of all.

    4. Even Goods Industries will be impacted

      The new tractors will be guided by satellite: a GPS, with a precision of 2cm and not 10 meters like those in cars, enables farmers to avoid going over the same ground twice when they are working: a saving of 10% to 20% in fuel and products. Combine harvesters adapt their own speed according to the crop they are harvesting, which enables a 20% improvement in hourly output.

      The "Google car" tested in California is an autonomous car, with a driver.
      Who will win in this competition?
      • The established manufacturers because they know how to build chassis, gearboxes, engines; because they have dealership networks and a loyal customer base?
      • Or newcomers like Google, because they master information systems or location data?

      Whoever wins, how will the insurance companies analyze the responsibilities?

    5. Collaborative sites propose new forms of usage

      Collaborative sites propose new forms of usage of which we will give 2 examples:

      • Example of a collaborative site proposing rooms: airbnb (Nouvelobs)
        On this website, individuals offer rooms to tourists. Value for the renter: not only the room will be less expensive than a hotel, but the customer will benefit from advice given by the homeowners on restaurants or shops in the neighborhood. We are welcomed as a person and not a customer.
      • Example of "covoiturage.fr", the market leader in Europe of carpooling. The site connects drivers and potential passengers who make the same journey in order to share costs.

      Competition is becoming fierce not only for traditional actors, but also for the State, whose revenue service is impacted.

  3. Start with the Value rather than improving a Product

    As we described above, the first task is deciding what Value we want to satisfy.

    In a world where progressive improvement is favored, the right design process is copying the best thing available, then seeking to improve it. Business monitoring is vital to identify competitors' good ideas. We begin by leveraging what has already been invented by the others, then we improve it by adding our personal touch. If we want to go through the whole learning process by ourselves, we will not be very efficient.

    In a world where disruptive Products dominate, this approach is less efficient: it is better to start with the Value the Customer is waiting for to imagine Products that do not yet exist today. It is one way of being the first on a new Market, which represents a considerable advantage, but is not enough, as the difficulties of Yahoo on search engines or Blackberry on smartphones have shown.

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The story of George the Baker is made available under the terms of the
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