6 Differentiation Strategies - UTokyo OpenCourseWare

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Lecture Notes Vol. 6_2 for Management Strategy, 2006 6 Differentiation Strategies 3 Value Map 3.1 Quality and Price 3.1.1 Experience Curve－Pitfall of Low-Price Strategy - Extreme obsolescence in quality, debasement of competitive edge ● →Erosion of the market share against competitive products

● →Decrease in the sales size against substitute products -Miss a new production method that nearly changes the proficiency ratio -A company, if preoccupied with a high-margin policy during the maturation and indolent about

an investment, results in losing to its competitor that provides a differentiated product or to another firm that develops a totally new substitute product.

低中

高

低

中

高

20

29

38

13

20

27

7

14

21

0

5

10

15

20

25

30

35

40

ＲＯＩ（％）

相対的市場シェア

相対的品質

品質・シェアと収益性

出所：バゼル&ゲイル『新PIMSの戦略原則』1988年、ダイヤモンド社、136頁、図6-3。

Quality/Share and Profitabilitiy

High

Medium

LowHigh

Relative Quality

MediumLow

Relative Market Share Origin: Buzzell & Gale (1988), The PIMS principles:Linking strategy to performance, Diamond Inc., p.136,

ROI (%)

相対的知覚品質

（優れている）

相対的市場

シェア

（増加）相対的費用

（低い）

利益成果

（高い）

相対的価格

（高い）

優れた知覚品質にともなう成功図式

出所：バゼル&ゲイル『新PIMSの戦略原則』1988年、ダイヤモンド社、136頁、図5-4。

Success Diagram Involving Superior Perceptual Quality

Relative PerceptualQuality (Superior)

RelativeMarket Share

(Increase)

Relative Price(High)

RelativeExpense (Low)

ProfitPerformance

(High)

Origin: Buzzell & Gale (1988), The PIMS principles: Linking strategy toperformance, Diamond Inc., p.136, dia.5-4

Lecture Notes Vol. 6_2 for Management Strategy, 2006

2

3.1.2 Value Map

　

１）プレミアム

2）平均

3）経済的 4）高い価値

5）低い価値

相対的品質←低高→

↑高

相対的価格

低

↓

等価値曲線：

顧客に同等の価値を提供する製品を結んだ曲線．

High

5) Low Value

3) Economy 4) High Value

2) Average

1) Premium

Low

Low

Rel

ativ

e Pr

ice

Relative QualityHigh

Iso-Value Curve:Curve that connects products whichprovide the equivalent value

◆Position to provide average value -Premium Provide a superior quality at a price adding premium -Average Provide an average quality at an average price -Economy Provide an inferior quality at a low price ◆Position to provide high value -Provide a superior quality at an equivalent or low price ◆Position to provide low value

-Provide an inferior quality at an equivalent or high price ▲Example: Reduction in size and weight of cellular telephones (up to 1997) ●Cell phones for NTT Docomo


3

●Value Map on Cell Phones (Left on price and duration of call: Right on price and weight)

28,000

33,000

8 9 9 10 10 11 11

価格

通話時間

P

D N

F

Q

28,000

33,000

13 12 11 10 9 8 7

価格

重量

P

D N

F

Q

Price Price

WeightDuration of Call

ＱＰＮＦＤ


4

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

36,000

85 90 95 100 105 110 115

価格

通話時間（分）

P

D N

F

Q

P*

D*

N*

F*

Pric

e

Duration of Call (minutes)

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

36,000

130 120 110 100 90 80 70

価格

重量(g)

P

D N

F

Q

P*

D*

N*

F*

Pric

e

Weight (g)


5

携帯電話端末　国内市場シェア推移

0

5

10

15

20

25

30

96 97 98 99 2000 2001 2002

（暦年）

シェア（％）

NEC

Panasonic

Sharp

TOSHIBA

MITSUBISHI

SONY

京セラ

富士通

資料：『市場占有率』日経新聞社、各年版（９８－０４

Cell Phone Handset: Transition of Domestic ShareShare(%)

(Calender Year)

KyoceraFujitsu

Data: Share of Market , Nihon Keizai Shimbun, Inc., annual version (1998-2004)

The figure is omitted due to copyright.


6

1995 1996 1997 1998ノキアﾌｨﾝ 14.8% 16.7% 17.2% 24.4%モトローラ米 27.3% 26.2% 24.4% 21.3%エリクソン瑞 10.6% 12.5% 15.0% 13.0%松下日 4.6% 5.0% 3.3% 3.2%シーメンス独 1.9% 2.3% 2.0% 2.9%NEC 日 6.1% 5.4% 3.7% 2.5%東芝日 2.6% 2.3% 1.6% 1.7%アルカテル仏 0.8% 1.3% 0.9% 1.6%その他 31.2% 28.4% 31.9% 29.4%

100.0% 100.0% 100.0% 100.0%計

ノキア24.4%

Total30,523Million US$

1998年市場シェアシェアの推移

出所）TELESEEQ Yearbook

モトローラ21.3%

エリクソン13.0%

シーメンス2.9%

松下3.2%

NEC2.5%

東芝1.7%

アルカテル1.6%

その他29.4%

1998 Market Share

Nokia

Matsushita

Siemens

Alcatel

Ericsson

Motorola

Others

Toshiba

1995 1996 1997 1998Nokia Finland 14.8% 16.7% 17.2% 24.4%Motorola U.S. 27.3% 26.2% 24.4% 21.3%Ericsson Sweden 10.6% 12.5% 15.0% 13.0%Matsushita Japan 4.6% 5.0% 3.3% 3.2%Siemens Germany 1.9% 2.3% 2.0% 2.9%NEC Japan 6.1% 5.4% 3.7% 2.5%Toshiba Japan 2.6% 2.3% 1.6% 1.7%Alcatel France 0.8% 1.3% 0.9% 1.6%Others 31.2% 28.4% 31.9% 29.4%Total 100.0% 100.0% 100.0% 100.0%

Origin: TELESEEQ Yearbook

Share Transition

3.2.1 Method to Evaluate Relative Quality 1) List up product attributes that influence a purchasing decision other than pricing. 2) Weigh (W) each attribute in order of level of influence on a purchase decision. 3) Evaluate score (R = 1-10 points) on each attribute with respect to the whole product line of own

company and the competitors’. 4) Compute the relative quality.



7

1011

:1

≤≤

=∑

∑−

RiWi

n

RiWin

i

　　　

　　　

属性数　　 Quantity of Attributes

Key Buying Criteria Weight (%)*1 U.S.A. Japan

Product Attributes

Fuel economy 10 5.0 ＜ 7.0Engine maneuverability 5 8.4 8.5Shift 5 6.1 ＜ 9.0Acceleration 5 5.9 7.1

Accident avoid-ability 5 5.9 7.5Steering-wheel accuracy 5 5.0 ＜ 8.5Break 5 5.3 ＜ 8.5

Ride comfort 4 5.0 5.0Noise 4 5.3 5.0Driver's seat position 4 6.7 8.0Front seat 4 5.9 ＜ 8.0Back seat 4 3.3 4.0Air conditioning 4 9.0 ＞ 8.0

Controllability 3 5.6 ＜ 8.0Display 3 6.4 ＜ 9.0Ease of use 3 6.7 6.5Need for maintenance 7 2.7 ＜ 8.5

Service attributesEase of procurement 10 9.0 ＞ 6.0Convenience of service 10 9.0 ＞ 6.5

*1 Rough estimate by SPI staff *2 Evaluation of products' attributes quoted from Consumer Reports

Accommodation

Diagram 6-10 Overall Performance Evaluation on Compact Cars: U.S.A. vs. Japan

Evaluation Score*2

Engine and transmission

Handling and break

Ride quality

Origin: Buzzell & Gale (1988), The PIMS principles: Linking strategy to performance, Diamond Inc.


8

Diagram 6-11 Discount price and import quota strengthen American models' competitiveness

Value Map: Positions in June, 1984

Pric

e af

ter D

isco

unt

Relative Quantity (percentile)(based only on product attributes)

Olds CutlassSupreme

Toyota Camry

Made in Japan

Nissan Stanza

Olds Firenza

Mercury Topaz

Honda Accord

Made in U.S.A

Chevy CavalierFord LTD

Plymouth Reliant

Chevy Citation

Mazda 626

‡

Origin: Buzzell & Gale (1988), The PIMS principles: Linking strategy to performance, Diamond Inc.

3.2.2 Multi Dimensional Scaling (MDS) Method to plot product positions on the multidimensional space by measuring “difference” that consumers perceive by product brand ▲Example 1: MDS Mapping of American Midsize Passenger Cars

Origin: Barney (1996), Gaining and Sustaining Competitive Advantage, Prentice Hall

▲Example 2: Tylenol



9

Mildness

Tylenol

EffectivenessBufferin

Bayer

Excedrin

Diagram 6-1 Perception Map of Analgetics

Aspirins ofprivate brands

Anacin

Origin: Urban, Hauser & Dholakia, New Product Management , President, Inc., 1989

‡

Cluster 1Age = 67 ± 10Income = $12,000 ± $2,000

Cluster 2Age = 32 ± 10Income = $30,000 ± $3,000

Diagram 7-9 Exemplification of Consumer Clusters on Analgetics

Impo

rtanc

e of

Mild

ness

Importance of Effectiveness

Origin: Urban, Hauser & Dholakia, New Product Management, President, Inc., 1989

‡


10

●Reference (Origin: J&J web site http://www.jnj.co.jp/jjmkk/ja/history/story28.html) McNeil Consumer Healthcare Company is the largest non-prescription drug company in the U.S., and its major product “Tylenol” is the top brand of pain-relieving drugs with the annual sales of 1 billion US dollars across the world. The success of this Tylenol has begun since it first came onstage as a prescription drug 43 years ago in the U.S. Used by physicians as an ethical pharmaceutical in the beginning, it was further developed into an over-the-counter drug, and was launched in 1975 after carefully repeated market surveys. Upon placing it on the market, J & J put in a powerful sales effort through TV, publications and sales promotions, etc. targeting at consumers. Partly reinforced by high commendations already scored from doctors and pharmacists, in 1981 which was 6 years after the market introduction, the gross sales of Tylenol came to occupy more than 35% of the analgesic market, which was a phenomenal success. Acetaminophen, Tylenol’s active ingredient, has an effect on relieving pain and reducing fevers. Both acetaminophen and aspiring are excellent analgesic agents which consumers can obtain without prescriptions, and numerous clinical studies have confirmed that these ingredients relieve pain and have antipyretic effect. However, as taking aspiring involved a possibility to entail adverse side effects, Tylenol consisting primarily of acetaminophen has been widely accepted as a drug without such concerns by medical professionals and consumers to have accelerated its sale growth. In 182 and again in 1986, the Tylenol case broke out that shook the U.S. from coast to coast (cyanide-tampering case), which forced J & J and McNeil to encounter an acute crisis. Then-Chairman Burke not only responded to this situation ｂｙ positioning it as a crisis management, but also laid out a system to prioritize the “responsibility to consumers”, a decision made based on the first responsibility in “Our Credo”, the corporate philosophy of J & J. J & J’s response to this affair was much more highly appraised than ever by general consumers and governmental/industrial communities. Ｎeedless to say, the product recuperated the market as the result of the full staff effort acting as a unit to place the product on the market in the rapid speed way beyond an unexpectedly pace. 3.3 Two Kinds of Differentiation ◆Vertical Differentiation (differentiation by quality) ➢ To enhance the level of each attribute beyond that of other firms’ through a combination among

certain attributes ◆Horizontal Differentiation ➢ Combination among attributes or their ratio included in a product is different from that of other

firms’. ➢ Portable personal computer, PDA


11

▲Example: Competition between Toshiba and NEC over Laptop PC

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

012345678

重量(kg)

価格（円）

X-07

Tandy200PC-98LT

J-3100

DG/1

PHC-16

FM-16π

PC-5000

PC-8201

IBM PC コンパーティブル

HC-88

図 4-3製品アーキテクチャの変化による多様なラップトップの出現

PB-100F

Diagram 4-3 Emergence of Various Laptops due to Product-Architecture ChangePrice (Yen)

Weight (kg)

Convertible

Origin: Wi, Jong-Hyun, Master Dissertation, University of Tokyo

●Trajectory of Toshiba’s Products

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

3.1

012345678910

重量

性能代理変数

J-3100SL(87/10) J-3100(86/10)

J-3100GT(87/7)

J－3100SGX(87/12)

J－3100GX

(88/1)

Dynabook(89/6)

東芝

NEC

Perfo

rman

ce P

roxy

Var

iabl

e

Weight

Toshiba

Note: Though “J-3100GT” is the souped-up version of “J-3100”, both are being shown in the overlap.


12

●Trajectory of NEC’s Products

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

3.1

012345678910

性能代理変数

9801LS

(88/10)

9801LX5C(89/7)

9801LX(89/3)

東芝

NEC

98 ノート(89/11)

9801LV(88/2)

98LT(86/10)

重量

Dynabook(89/6)

J3100(86/10)

Perfo

rman

ce P

roxy

Var

iabl

e

Weight

Toshiba

98 Note (89/11)

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6 Differentiation Strategies - UTokyo OpenCourseWare