A value curve plots multiple metrics that are important for your target customer

Question

A value curve plots multiple metrics that are important for your target customers (i.e. price, ease of use, speed, accuracy) with the low-high measures for competitors and yourself. By examining the existing and expected competitive offerings, you can analyze which metrics to modify in order to create a new value curve analysis. Virtual reality is still a very small market but that's not stopping many tech companies from investing lots of time and money to bring new VR tech to market. Since the market for the industry is small, there currently is not a need for mass production, which may save a lot of initial manufacturing cost in terms of capital intensity. Virtual reality is a new and emerging market, so the firm concentration is low because there are not that many competitors. The average firm size is also very small because there isn’t enough motivation due to the lack of research and development of virtual reality devices. Why did you select this target market and what existing factors can you eliminate?

Explanation / Answer

I have selected this market because in the target market related to VR (virtual reality) the value curve analysis has revealed that competition is not investing that much in this sector and as such the market potential will be significant when the technology becomes more acceptable and more pervasive. As we have seen in past new technologies take time to get accepted and adopted but once they are accepted they gain significant traction and race to inflection point. Thus I have selected this target market so as to gain the first mover advantage once the technology gets more acceptability.

The factors that can be eliminated are value propositions that will not hold much value for the initial users. These factors are price, ancillary services, and bundling with other products or services. Initial users in the market will get attracted to VR mainly due to the experience and usability of the technology. In the initial years price will not be a key value metric for them. Secondly consumers will not expect bundling with other services as they will get attracted to VR in its standalone existence and form. Once VR starts getting applied in different fields these factors will have to be included.

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