In 03 tilt 2015 niraj dawar

01/03/15
Unleash the Spark of
Innovation with
Jugaad!
A One-Day Workshop
Session 3:
Tilt – Innovation Goes Downstream in
the Value Chain

01/03/15
Framework for the Workshop
Post-Lunch
Mindspace
IDEO, 7 Rules
Manpower
10 Faces
Pre-Lunch
Methods
NABC Exercise
SCAMPER
Marketspace
Tilt
4Ms: Methods, Marketspace, Mindspace, Manpower

01/03/15
Creative Exercise 3
Join all the dots, using only four straight lines,
without lifting the pen from the paper.

01/03/15
Creative Exercise 3
A solution is not always possible at the same level on
which the problem exists. You need to go beyond the
current boundaries.
Connecting the dots.

01/03/15
Tilt – Repositioning Innovation
Product focused and production oriented companies
think their competitive advantages lies in
sourcing, production, logistics and product feature innovation.

01/03/15
However, these activities are
more and more often being commoditized or outsourced.

01/03/15
These activities are
driven by economies of scale.

01/03/15
These activities are driven by economies of scope.

01/03/15
Upstream
 Internal – within the
company
 Access to low-cost
suppliers; patents;
efficiency in production
 Cost leadership or
differentiation
 New products,
technologies, R&D
 Erodes as
competitors catch up,
imitate or leapfrog
Downstream
 External – in the
marketplace
 Market information;
customer
relationships
 Cost and risk
reduction
 New ways of
interacting with
customers
 Accumulative – can
grow with time,
experience, networks
Locus of competitive
advantage
Types of competitive
advantage
Basis of customer
value
Innovation
Sustainability of
competitive
advantage
Source: Tilt – Shifting your strategy from Products to Customers (Niraj Dawar) P70

01/03/15
"Innovation in a downstream facing company is
no longer about manufacturing better products.
It is about better ways of interacting with customers,
better ways of delivering information to customers,
and better ways of reducing customers' costs and their risks”

01/03/15
In a retail outlet, a
consumer buys a can of
Coke as part of a 6-pack.
The price is about
Rs.15 per can.
These activities are driven by economies of scale.

01/03/15
The same consumer,
on a hot summer day,
gladly pays Rs.90
for a chilled can of Coke
sold at the point-of-thirst
through a vending machine.
These activities are driven by economies of scope.

01/03/15
The focus of innovation has
shifted downstream to
customer satisfaction,
customer acquisition and
customer retention.
Rs. 15
Rs. 90

01/03/15
http://www.exgroup.com/index.php?section=our_approach&page=cust_exp_mgmt
Designing
The Product
Experience
Data on the Experiential World of the Customer
Structuring
The Customer
Experience
Engaging in
Downstream
Innovation
Building the Experiential Platform
1
2
3 4 5

01/03/15
Customer Value Creation
• A customer is ready to pay a 500 per cent price premium for
a can of Coke delivered to her from a tailor-made machine in
whatever the circumstances she wants it.
1

01/03/15
• It is chilled, it is single serve and it is at the point of thirst,
thus moving the concentration away from upstream activities
1
Innovation
Space
2

01/03/15

Video of Tilt – Where is Your Center of Gravity?

01/03/15
In the last 10 years there have been
two major innovations
in the automobile industry.
http://www.dgermancar.com/volkswagen/volkswagen-golf-blue-motion-races-2011-rac-future-car-challenge.html
An Upstream Strategy
(on the product side)
Electric engines
are replacing
IC engines

01/03/15
What is downstream strategy?
Different customers have different needs.
http://www.responsys.com/blogs/nsm/cross-channel-marketing/secret-customer-centric-innovation-qa-niraj-dawar/

01/03/15
A downstream strategy means …
Noticing how customers have very different needs than what
the automobile industry typically provides.

01/03/15
What is downstream strategy?
Instead of selling a customer one car, what if you sold a
temporary ownership which would allow them
to specify the type of car that they would need for a few hours
or a few days?

01/03/15
In the last 10 years there have been
two major innovations
in the automobile industry.
http://www.dgermancar.com/volkswagen/volkswagen-golf-blue-motion-races-2011-rac-future-car-challenge.html
Downstream
On the customer side
temporary ownership.

01/03/15
Why would customers prefer temporary ownership?
Brands such as Zipcar have created a rental model similar to
the hourly bicycle rental. This innovation is huge and will grow
to be even bigger as consumers realize that the cars we buy are
kept parked for 90 % of the time and are only used for 10 % of the
time, so why pay for the other 90 %?

01/03/15
Customer Value Creation
A customer is ready to pay a price premium for a car that can
be a SUV for one weekend and a family car for the next.
1

01/03/15
Think of one customer who needs a variety of different
vehicles for different activities who’s only interest is
temporary purchase.
1
Innovation
Space
2

01/03/15
http://bit.ly/1k8a0Tq A T Kearney – Reducing Complexity in Retail Banking

01/03/15
Accenture - New Banking Distribu1on Models
http://www.accenture.com/SiteCollectionDocuments/PDF/FinancialServices/Accenture-Banking-2016.pdf

01/03/15
“To compete effectively,
companies must shift from upstream to downstream activities,
emphasizing how they define their competitive set,
influence customers’ purchase criteria,
innovate to solve customer problems,
and build advantage by
accumulating customer data and
harnessing the network effect.”
Innovation is hugely successful on more “downstream activities”
close to the customer.

01/03/15
Innovating in the
customer experience.
The sign-on to Fidor Bank is through Facebook Connect which,
at this time, is one of the only bank that would work this way.

01/03/15
For every 2,000 Facebook likes that Fidor receives, it raises
the interest rate on FidorPay checking accounts by
10 basis points per year (with a cap of 15% per year).

01/03/15
Fidor Bank is changing the
banking service market
by
understanding the
convenience of social media
and
engaging customers to
co-design products
and
engaging community
to give peer-to-peer support
and
rewarding customers for
specific social interactions

Video of Fidor Bank Innovation

01/03/15

01/03/15
Tilt Matrix - Touchpoints, Customer Costs, Customer Risks
Prepurchase Purchase
delivery,
installation
Usage Maintenance Disposal,
renewal
Costs
incurred
by
customers
Risks
incurred
by
customers
Fidor Bank – Downstream Advantage

01/03/15
• Customer interaction, rather than
the factory, becomes the core of business innovation.
• The central strategic question changes from
"How much more can we sell?" to
"Why do customers buy from us?" and
"What else does the customer need?”
• Innovation to focus on
how to reduce customers' costs and risks.
• Competitive advantage can be gained by
innovatively managing the flow of information
in marketplace networks.

01/03/15
Mini-size Cooler
ChotuKool
Tilt – Products to Customers

01/03/15
Touchpoints, Customer Costs, Customer Risks
Prepurchase Purchase
delivery,
installation
Usage Maintenance Disposal,
renewal
Costs
incurred
by
customers
Risks
incurred
by
customers
Tilt – Products to Customers
Apply the Tilt Matrix to ChotuKool

01/03/15
Making Innovation Work
References
Tilt
Shifting Your Strategy From
Products to Consumers
By Niraj Dawar
Harvard Business
Review Press

01/03/15
Read
Frooti Case
Tomorrow’s Exercise

01/03/15
Framework for the Workshop
Post-Lunch
Manpower
10 Faces
Make It Work
Key Learnings
Pre-Lunch
Mindspace
Mental Models
7 Rules/ Frooti
3Ms: Mindspace, Manpower, Make It Work

In 03 tilt 2015 niraj dawar

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