Business Solutions

Another strategy focuses on changing economic characteristics, as the strategy itself becomes the innovation, since the product or service the business carries may have been around for quite some time, the strategy converts the old product or service into something new. It changes the utility value and economic characteristics, while physically there is no change, economically there’s something different and new.

Keep in mind that all strategies that have been discussed have one thing in common, that they each create a customer, and that is the ultimate purpose of a business, and indeed of all economic activity. They do so in four different ways; by creating utility, by pricing, by adaptation to the customer’s social and economic reality, by delivering what represents true value to the customer.

Creating utility enables customers to do what serves their purpose with the product or service. For example the old idea of a “bridal register” has been adapted by many product manufacturers, to allow customers to give what the bride needs instead of what she already has, and thus this innovative opportunity was created and adopted to give customers the utility they needed to accomplish their gift giving, and a vehicle by which the business can focus customer’s buying on it’s specific products only.

Creating utility through pricing is another innovation that allows manufacturers and businesses to sell their products, such as, computer printers that are priced very low, so low sometimes it seems they’re being given away, which for all practical purposes they are, since the replacement ink cartridges are priced higher than the original printers, thus the utility is created that sells ink cartridges with higher profit margins, and greater value in the mind the customer.

So remember, the customers do not buy a “product “, but what the product does for them, and how much the customer pays for each item depends on what the product does for the customer, how it fits his or hers reality, and what the customer sees as value.

Now creating true value to the customer might seem at times to be the most elusive and difficult task, since it is the customer who ultimately determines the value for services and products, and whatever the customer buys must fit the customer’s realities for value to be established, and the better the fit the higher the value.

The truly successful entrepreneur is one who knows his customer’s realities and the realities of the market that shape and influence customers value systems, can identify changes in the realities that ultimately affect the value customers place on the entrepreneur’s services and products, and quickly make the necessary changes in the services and products to maintain the level of reality fit and value needed for success.