How Good is your Practice Value Innovation?

Value Innovation makes one part of Professor James Green Opportunity Analysis Canvas that pertains to developing the entrepreneurial idea. Value Innovation consists of simultaneously pursuing differentiation and low cost generating added value to both the patient and the practice. The patient’s obtained value is the difference between the benefit of the product/service and the price he pays. The value for the practice is the difference between the price and the cost of the product/service.

In Value Innovation, practitioners seek to increase both the value created to the patient and the value created to the practice. Professor Green emphasized the importance of the Value Curve which is a diagram that contains a comparison of all possible factors of products and services. Those factors are sorted in the diagram on a relative scale of low to high. Examples of products and services factors include features, benefits, price, etc.

Kim and Mauborgne developed and employed the Value Curve to draw the practice’s strategic profile showing how it invests and how it will invest in factors of competition. In a nutshell, the strategy canvas works by adding all competitors and factors to the diagram. A relatively low position in the diagram indicates that the competitor invests less (or asks less in price in case of a price diagram) in that factor. Connecting the dots across all factors for each competitor reveals the practice’s strategic profile, its competitors’ profile, and its main alternative (optician, ophthalmologist, perimetrist, …). By comparing the factors of all competitors you can identify common and differing factor levels with competitors.

A typical diagram would include factors from your optometry practice, competitors’ optometry practices, and alternatives like opticians, ophthalmologists, etc. A good drawn strategy should reveal more dots in common with alternatives than competing optometry practices. A winning and effective strategy should reveal three complementary qualities that include focus, divergence, and a compelling tag line.

The practice diagram should reveal a clear and distinct focus on factors that are apart from other competitors. Divergence in the factors the practice focuses on should reveal factors that the practice is investing or should be investing in. The compelling tag line should deliver a clear message of a truthful offer or package that other competitors don’t have.

Value innovation is directly related to the value curve. By changing different factors and features and assessing the negative and positive tradeoffs and effect of this arrangement, we can know what new features to create, and we can change the value proposition.