Choosing and Competing Effectively in the Right Space
Competing in the right space—the value chain and strategic control points
—William Sheppard, Minnetonka, Crème Soap on Tap and the story of the pumps
In this chapter, we develop in detail two critical building blocks for creating effective strategy: strategic control points and the value chain. We first illustrate the definition of a strategic control point via an example. Perhaps the best—and most dramatic—example is that of widely used liquid hand soap Softsoap®.
Back in 1865, William Sheppard of New York was granted a patent of “Improved Liquid Soap.” His invention was a good one with many practical uses, but like many inventions, it did not make its way into people's homes until many years after he conceived it. It wasn't until 1980, in fact, that the Minnetonka Corporation started offering “Crème Soap on Tap” through boutique distributors. The product was a success, and the corporation decided to follow up with a similar product for mass retail sale.1
During the launch, the company decided to package the product in a distinctive looking pump bottle. The problem, however, for this relatively small producer of consumer goods (and for countless others), was that retailing is intensely competitive. There are requirements ...