Developing and executing a strong value proposition that is understood by your employees and your 
customers is the hardest challenge every business leader faces. All stakeholders in the business ecosystem such as suppliers, employees, partners, and customers will always have their own interpretation of the strategy and what it means to them.
I recently had the opportunity of listening to a fascinating presentation on business strategy led by a founder of one of the most successful electronics manufacturers in Asia. This organization’s business model and strategic approach is simple; design, develop, and deliver as many different competitive forms products to existing competitors as possible and do it at a fraction of the cost of the branded market leader. To date, they have more than 10,000 products in the market including Smartphones, controllers, battery packs, and even robot vacuum cleaners that clean apartments while their “owners” are at work. Sounds like there is a vision that is understood and clear with great alignment, right?
The approach came across as quite aligned and bold until he added another little mindboggling 
strategic statement; “And we have another goal that’s not published in any of our documents. We want to sell our products at prices below the street prices of counterfeit replicas.”
It took a few moments for that comment to sink in. Their goal is to be the low-cost producer at prices that are cheaper than the black-market prices of the fake competitors that flood the markets. Outstanding!
One of their most important design principles to be able to deliver on the value proposition is to keep it simple and not overengineer their products. For example, he shared the process they use for building their remote controllers. In the current ecosystem, all the major branded competitors are competing against each other by adding more and more features to the point where only a fraction of the customers can actually use the devices successfully. Instead of competing on making complex features cheaper, they went the other way and reduced their versions to the most basic functionality such as “on”, “off”, “up”, and “down”. By doing this, they were able to reduce the cost structure of manufacturing by more than 80% of the branded innovators and within one year were selling at prices that are about 40% of the lead, innovative branded leader. Also within a year, they were about to capture more than 50% of the total available market and drive the market growth by more than 10% which means not only did they take a big slice of the pie, they made the pie bigger.
When I train leaders and individual contributors to develop their Business Acumen skills, I always start with a deep understanding of business strategy because as the saying goes; “If you don’t know where you are going, any road will get you there.” In that context, being strategic is not only what strategy you pursue, it’s also the strategies you do not pursue.
In the case of the company I just described, they have chosen the path of intense operational excellence to drive costs out of the system and deliver to their customers reasonable quality at the absolute lowest prices.
But as many businesses know, with strategic success brings temptations to move beyond your chosen value propositions into others. The leader of this successful operationally excellent company implored the audience to not fall into the following strategic temptations:
Don’t let the value proposition be interpreted as Product Leadership
Because they got so good so fast at producing simple, elegant, yet inexpensive products, customers started thinking the company was a “product leader” like Apple. The designs are clean and crisp but unlike Apple (who wants to be the product leader) this company can’t afford to do that because their margins are very thin and have a different customer base that is very price sensitive.
The leader shared, “You really have to dance with the customers who have brought you to the party.”
Don’t let the value proposition be interpreted as Customer Intimacy
The other interesting temptation of producing so many different versions of electronics is to be perceived as a Customer Intimate organization, designing and delivering products that seem tailored and customized. In several categories such as power banks (mobile rechargers) they have dozens of different versions in all shapes forms, sizes, and applications in the market. Internal stakeholders and many customers have confused the variety with customer intimacy and it’s a battle every day to keep focused. “Just because we have different varieties for different needs doesn’t mean it’s not a one-size-fits-all-at-the-lowest-price strategy.
In summary, it was one of the most interesting and inspiring discussions of business strategy I’ve ever heard and once again illustrates that the most successful companies on the planet focus on one value proposition and execute it flawlessly by creating alignment throughout their business ecosystem.
