The key to competitive success—for businesses and nonprofits alike—lies in an organization’s ability to create unique value. Porter’s prescription: aim to be unique, not best.
Note: Mr 5-Forces has never been so interesting - exposed one of my most dearly held misconceptions in the first few pages.
Which customers are you going to serve? Which needs are you going to meet? What relative price will provide acceptable value for customers and acceptable profitability for the company?
Note: essential elements of a value proposition
Here’s what is essential: finding a unique way to serve your chosen segment profitably.
Note: in servicing your target market segments this is the key
Southwest didn’t promise to get you anywhere you wanted to go, as other airlines did. Nor did it offer the basic amenities that were once standard industry fare: meals, assigned seats, baggage transfers. Full-service airlines (perhaps a term that no longer accurately describes the legacy carriers, with their higher costs and prices) overserved the needs of a large number of travelers flying Southwest’s shorter point-to-point routes.
Note: by overserved, porter means giving more value than the customer really needs or wants. by overpriced porter means the higher prices that are required to support the extra value being delivered.