Innovating Customer Value : A study in creating uncontested market space

Abstract: A number of new companies are rapidly becoming successful in established markets, or are creating new markets for themselves where there is little or no competition. Their services and products seem to knockout their competition by offering significantly higher value compared to older products. The main purpose of this thesis is to choose a few fast-growing consumer focused companies, and study their business models’ comparative customer value, value creation and viral marketing components in relation to existing theory in the field. The thesis is a qualitative investigation, based on case studies, using an abductive approach. Important theories include Richard Normann’s ecogenesis, prime movers, and the concept of bundling/rebundling; W Chan Kim & R Mauborgne’s ”Blue Ocean Strategy”; J. P Womack & Jones D. T‘s “Lean Consumption”, and Malcolm Gladwell’s “Tipping point”. The four case studies are based on eBay, Google, Ryanair and Skype, all sharing similarities in terms of market-creation (or being a prime mover in an existing market), extraordinary success and market penetration. The most important conclusion is that all four companies have created their own markets, an ecogenesis, instead of fighting head-on with competitors. Furthermore, they all bear resemblance with the emerging theories of “Lean Consumption”, giving the customer what they want, where they want it and when they want it. In order to exploit new opportunities, one must find a business model that creates maximum “customer value” at an attractive price level (“value innovation”). The strength of the customer value in the service or product offering will decide whether a “tipping point” is reached and thereby how fast the marketing message spreads and to how many. The companies that continually think “outside the box” will be the winners in the race to attract customers and find or create new market space.