Shared Value as Corporate Strategy
Why Corporate Strategy Leaders Rewatch This 38-Minute Michael Porter Shared Value Framework Shared value profit promise: "Shared value goes beyond being generous goes beyond avoiding harm stopping things counterproductive, we can actually add value in business societal issues meeting most important societal needs, key that unlocks added value actually doing what businesses do approaching task using business model making profit, if tackle societal needs business model generates profit achieved most powerful force ever get changing world, can scale serve millions billions people solve problems not just make little band-aids actually solve most important problems world." Strategy differentiation fundamentals: "Essence strategy not doing same thing as competitor, no one best way compete any business, if get into battle competitor doing same thing offering same services meet same needs same way that's zero sum competition very hard win, if all doing same thing trying do little bit better probably going get price competition crater profitability not win, essence strategy how create unique value organization customer how do something distinctive serving customers choose serve." Value proposition three questions: "Value proposition answered three questions, question number one what customers going serve, are we going serve every customer business focus sophisticated customers lowincome customers, number two which their needs going try meet, are we going try meet every possible need space operate home in few critical needs distinctively good addressing, third part value proposition what price do we ask premium sort match price offer discount lower price because so efficient offer lower price still make more money." IKEA strategy choice example: "IKEA remarkable amazing global success furniture store everybody knows exactly what does nobody been able imitate company 40 50 years enormously profitable, unique value proposition welldesigned highstyle modular furniture designed relatively small living spaces very very low price points nice wellmade stuff amazingly low price, no service store see somebody IKEA uniform move towards them usually run other direction don't provide service, want you take furniture home yourself not going deliver want you deliver yourself Christmas-like experience assembling furniture when get home." Discovery Health insurance transformation: "Discovery Health company able think I'm health insurance company all about improving health, does your health insurance company live every day improve your health probably not process claims deny expensive services keep cost down, Discovery paired health insurance plan wellness program unique combination designed drive health, when subscriber health insurance program healthier pay less claims more profitable, one most profitable health insurance companies face earth profits sign creating profound social benefit healthier subscribers." 5 Key Timestamps: [04:57] The Shared Value Profit Promise – If tackle societal needs business model generates profit achieved most powerful force ever get changing world, can scale serve millions billions solve problems not just band-aids solve most important problems [07:59] The Strategy Differentiation Fundamentals – Essence strategy not doing same thing competitor no one best way compete, if doing same thing trying little bit better probably price competition crater profitability, essence strategy create unique value customer do something distinctive [17:26] The Value Proposition Three Questions – What customers going serve every customer focus sophisticated lowincome customers, which needs try meet every possible need home few critical needs distinctively good addressing, what price ask premium match offer discount lower price [20:51] The IKEA Strategy Choice Example – IKEA unique value proposition welldesigned highstyle modular furniture small living spaces very low price, no service store see IKEA uniform run other direction, want take furniture home yourself not deliver Christmas-like experience assembling furniture [28:32] The Discovery Health Insurance Transformation – Discovery think I'm health insurance company all about improving health, paired insurance plan wellness program unique combination drive health, when subscriber healthier pay less claims more profitable, one most profitable companies face earth profits sign creating profound social benefit
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