Value denials –> business opportunities

28May08

Today, while researching for my 48h case-exam, I found a great article (Strategy’s strategist: An interview with Richard Rumelt), on The McKinsey Quarterly, on strategy planning.

“A value denial is a business opportunity. Every change and innovation creates new value denials. People wanted to buy music à la carte and keep 10,000 songs on their computers. Well, they got that, but there was a value denial: the digital music wasn’t portable. So along come the MP3 player and the iPod. But those innovations uncovered a new value denial: people also want to plug their players into their stereos. Well, this was pretty easily fixed, but playing your MP3s on your stereo uncovers yet another value denial: MP3s are compressed and just don’t sound as good as CDs. Finally, even when I have immediate access to all music anywhere and anytime through the “jukebox in the sky,”6 there will still be a value denial—how will I know what to listen to? I will need a private tutor and disc jockey to help arrange my listening and maybe to shape my tastes.

So one useful way to think about change is to turn aside from the central innovation and ask yourself what value denials it will uncover. How will they be fixed? And what value denials will then be uncovered by that fix?”

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