source: http://en.wikipedia.org/wiki/Webvan
Developing a good value proposition isn’t easy. First, there’s two parts to consider: Point of Difference (POD) and the Point of Parity (POP). Developing a POP might be easy, but the POD can be a very difficult struggle for many firms. The POD needs to be innovative so that the firm can set itself apart from others in the industry. At the same time, it must be realistic so that it is achievable. Failure to achieve these two criteria might lead to the collapse of an entire firm. Take for example, Webvan, a chilling memory of the Dot Com Bubble. The firm’s main POD is its ability to deliver groceries to the customer’s door within 30 minutes of placing the order online. This is definitely a breakthrough that sets Webvan apart from every in other store in the grocery store industry since their service allows consumers to do their shopping online in the comfort of their homes. But in order to live up to this claim, Webvan needed to spend billions of dollars on building warehouses and an efficient transportation system that sent the company bankrupt with US$803 million in debt. Hence, a strong value proposition needs a POD that is both innovative and achievable.
Read full story here
Trackbacks