Chapter 5:

5. What is meant by the term value innovation? Can you identify a company not discussed in the text that has established a strong competitive position through value innovation?

• Student One

-Value innovation is a strategy where a company creates a new and unique value proposition that provides both better value to the customer and a lower cost structure compared to competitors. This allows the company to disrupt the market and establish a strong competitive position.

• An example of a company that has established a strong competitive position through value innovation is Tesla. Tesla disrupted the traditional automotive industry by introducing electric vehicles with advanced technology, high performance, and a focus on sustainability. This created a new value proposition for customers and set the company apart from traditional automakers. I found this article interesting because that broke down four components of innovation capital and described how Tesla used their innovation to gain a competitive edge and instill value in their brand.  

https://hbr.org/2020/02/lessons-from-teslas-approa…

Student Two

• Value innovation is when innovation creates more value for the company, through differentiating the product at a lower cost. Value innovation is what sets companies apart from the rest. https://hbr.org/2004/07/value-innovation-the-strat… Harvard Business Review  article discusses how value innovation is frequently created by ignoring what your competitors are doing and thinking for yourself. One of the examples they cite is Kinepolis, a Belgian chain of movie theaters. With the advent of VHS tapes, Belgian movie theaters were struggling to attract audiences. Most movie theaters saw their industry as dying, and were afraid to invest too much money in their product. Kinepolis did the opposite, and invested tons of money into making their theaters as attractive as possible. They invested in giant screens, comfortable chairs, and larger theaters overall.  They were also cheaper than other theaters, due to economies of scale and placing their theaters in cheaper areas of town. This set them apart from the pack. Kinepolis has revitalized the Belgian movie theater industry.