"The VRIO Model: The acid test of differentiation
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Instead of burdening you with a complex process you would never use anyway, I recommend a set of four questions as the means to begin defining and quantifying your value. This is an excellent discussion starter that also yields insightful answers to help you recognize and appreciate your own value. Pick what you think is an important feature of one of your best-selling products. Can this feature pass the following four-question test?
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• Is it Valuable to the customer? Customers should be able to tell why they want it, what pain point it addresses, or what gains it enables. The feature is clearly something that makes customers better off, and you have dear, ready answers to describe why.
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• Is it Rare? The fewer options the customer has, the rarer your feature is. You have something customers want, and few others (if any) offer the same feature.
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• Can it be Imitated? In other words, if you gave a competitor a few months, could they perform that same function just as easily as you do, and thus offset or neutralize your advantage? Ideally you would have a sustainable advantage, which means it would take considerable resources—if not a strategic decision—for one or more competitors to challenge you on it. Here we touch on switching cos., which may be technical, marketing, or relationship-based.
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• Are you Organized to exploit this differentiation? Sometimes companies have too much of a good thing. They have the potential to offer superior value, but they can't exploit it, either because they lack the processes to market and support the feature, or they lack the talent or the means to exploit its full potential. Sometimes a company is just plain had at executing. They have breakdowns in execution excellence and spend their time fixing their issues.
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If you can honestly answer "yes" to all of these questions, you are truly differentiated. But most companies will answer at least one question with "no."
Trechos retirados de Stephan M. Liozu. em "Dollarizing Differentiation Value: A Practical Guide for the Quantification and the Capture of Customer Value"
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