INDEX
activating an edge strategy
observing and refining operation, 179–180
airline industry
concept of “customer journey” and, 34
decision to charge for checked bags, 92–93
economic pressures in 2008, 91–92
results of its edge strategies, 94–95
unbundling strategy, 30
Air Products & Chemicals, 111–112
Amazon Web Services (AWS), 59–61
Apple
App Store strategy, 27
criteria fulfilled by outside product edges, 26
customer centricity and, 21
patterns in outside product edges, 28
product edges in iPod story, 24–25
product edges in iTunes story, 25–26
Asbury Automotive Group, 81
auto industry
peace-of-mind upselling, 80–82
product attributes upselling, 65–66
Best Buy’s Geek Squad, 46–47, 156–157
Bezos, Jeff, 60
big data. See data assets and edge strategy
Bliss brand, 143
BMW
peace-of-mind upselling, 80–81
product attributes upselling, 66
Bowman, Bob, 57
building edge-based plan
building case for investment, 177–178
defining operating model, 175–177
determining likely customer adoption rates, 174–175
essential questions, 175
people, process, technology framework, 176
bundling, edge-based. See also unbundling, edge-based
commoditization cycle, 106, 112–116
overall value proposition and, 113
Cat Connect, 129
Caterpillar, 129
Colfax/ESAB
customer mission definition and, 39–40
customer segmentation and, 39
Colour Life
insight into customer journey, 45
leveraging of foundational assets, 44–45
results of its journey edge strategy, 45–46
commoditization cycle
about, 19
edge-based bundling, 106, 112–116
edge-based customization, 106, 107–110
edge-based solutions, 106, 110–112
edge merchandising and, 117–118
edge strategies for fighting, 164
inevitability of product commoditization, 105
strategic moves to combat, 106
threat of in hotel industry, 109
cruise industry, 6. See also Royal Caribbean Cruise Lines
customer journey. See also journey edges
consideration of by P&G, 148
customer mission definition step, 39–40
customer permission set and, 35–37, 41–42
customer segmentation step, 39
insight into by Colour Life, 44–46
leveraging at Best Buy, 46–47, 156–157
value-added service at Whole Foods, 42–44
customer mission space, 36, 37, 39–40, 41, 117
customer permission set
analyzing alignment with core offerings, 22–23
analyzing potential merger and, 143
customer journey concept and, 2, 35–37
customization and, 107
dealing with margin pressure and, 95
enterprise edge opportunities and, 51–53
inside edge opportunities, 28–29
opportunity in misalignment, 24
product fractionation and, 168–169
customers
boundary between company and, 6, 7
concept of “journey” and, 34–35
consumer comfort with data, 129–130
consumers’ valuing of data, 130–131
customer centricity at Apple, 21
determining likely adoption rates, 174–175
enterprise edges and, 14
failure to understand journey edge at eBay, 151–152
finding customers for data offerings, 127–128
framework for identifying their mission, 35–36
mapping customer journey, 40–41, 169–171
permission set (see customer permission set)
product edges and, 13
response to bundled edge strategy, 115
segmentation analysis importance, 39, 167–168
unprofitable customers and margin pressure, 88–90
upselling and (see upselling)
using self-service to increase margins, 96–98
using self-service to preserve margins, 98–100
customization, edge-based
traditional customization, 107–108
data assets and edge strategy
consumer comfort with data, 129–130
data fluency increases, 127–128
disproportionate nature of data’s value, 133–134
edge opportunity offered by, 123–124
enterprise edge strategy and, 54–56, 122
finding customers for data offerings, 127–128
finding growth opportunities using, 164
identifying data-driven edge opportunities, 124–125
monetizing data, 54–56, 121–122, 132–133, 172
observations about data-powered edge strategies, 125
renting out data for revenue, 131–132
selling of data across industries, 121–122, 126–127
value placed on data by consumers, 130–131
viewing data as product, 128–129
developing edge strategy
foundational assets assessment, 171–173
mapping customer journey, 169–171
prioritizing edge opportunities, 173
product fractionation, 168–169
segmentation use to understand customers, 167–168
testing for enterprise edges, 172–173
Dunn, Brian, 156
ecotones in business
boundary between company and customer, 6, 7
foundational assets and, 7–8, 10–11
edge effect
developing mindset around (see edge mindset)
economic significance of edges, 5–6
ecotones in business and, 6–8, 10–11
ecotones in nature and, 4–5, 6–7
edges that frame businesses, 6–8
foundational assets in companies, 8–11, 18
prevalence of edge tactics in companies, 15
problems experienced by core strategy winners, 9–10
questions for finding edge opportunity, 13
returns of edge achievers versus other companies, 16
risk and, 3–4, 11–12, 55, 118, 179
role of edge strategy relative to core strategy, 14
edge merchandising, 117–118, 120
edge mindset
applying edge strategy (see edge strategies)
assessing foundational assets and, 162–163
defining edge of current product and, 162
fighting commoditization and, 164
finding growth opportunities using data and, 164
mergers and acquisitions and, 164
potential in exploring, 161–162
recognizing upselling opportunities, 163
relieving margin pressure and, 163–164
unbundling core elements, 117
upselling, 117
edge strategies
effective upselling using (see upselling)
enterprise (see enterprise edges)
fighting commoditization using (see commoditization cycle)
journey (see journey edges)
product (see product edges)
relieving margin pressure using (see margin pressure)
role in M&A (see mergers and acquisitions)
EMC, 122
enterprise edges
application in mergers and acquisitions, 144–145
assessing foundational assets and, 18, 52–53, 59–61, 172–173
example of growth strategy consistent with edge approach, 154–155
monetizing by-products, 54–56, 121–122, 132–133, 172
opportunity for incremental growth and, 52
P&G and Gillette merger and, 148
prevalence of edge tactics in companies and, 15
risk mitigation, 55
unlocking latent capacity, 56–58
wind farm example of exploiting, 50–51
ESAB. See Colfax/ESAB
foundational assets
assessing with inside view, 171–173
considerations for assessing, 162–163
data assets and (see data assets and edge strategy)
determining enterprise edge–based synergies and, 18, 144–145, 154, 159
edge customization and, 110
enterprise edges and, 18, 50–53, 59–61, 172–173
journey edges and, 38, 41, 42, 44–45
leveraging, 7–8, 10–12, 14, 18, 86, 114, 119
steps in developing strategy and, 166
unlocking latent capacity using, 56
Whole Foods and, 43
Fundamentals of Ecology (Odum), 4
Gallaway, Terrel, 5
Gallo, A. C., 43
Gannett Company, 121
Geek Squad, Best Buy, 46–47, 156–157
Gillete Company. See Procter & Gamble and Gillette
health-care sector
acquisition activity among drug companies, 153–155
de-contenting strategy, 31
edge strategy applied to data, 54–56, 132–133
hotel industry
commoditization threat in, 109
edge strategy applied to mergers, 143
sets of actors in, 108
traditional revenue model, 108–109
use of outside product edges, 109–110
Imperial Chemical Industries (ICI PLC), 137–138, 146
industrial gas industry, 111–112
inside edge strategy. See also product edges
airline industry response to margin pressure, 91–95
comfort upselling at JetBlue, 77–78
edge merchandising and, 117–118
knowledge-based upselling, 83–85
opportunities at core offering, 28–29
relieving margin pressure with, 31, 94–101, 102–103
rep-less model of product sales and support, 99–100
self-service options and, 95–98
unbundling and, 29–30, 88–90, 117
Jobs, Steve, 21
Johnson & Johnson, 158
Joly, Hubert, 156
journey edges
about, 13–14, 17–18, 35, 37–38
addressing customer’s endgame at Colfax (see Colfax/ESAB)
application in mergers and acquisitions, 144
combating commoditization with, 111–112
“customer journey” concept, 34–35, 170
customer mission definition and, 39–40
customer segmentation and, 39, 167–168
eBay’s failure to understand, 151–152
edge-based solutions, 106, 110–112
identifying customer’s mission, 35–36
leveraging foundational assets by Colour Life (see Colour Life)
leveraging of customer’s journey at Best Buy, 46–47, 156–157
mapping customer journey, 40–41, 169–171
opportunity at journey’s beginning or end, 46–47
P&G and Gillette merger and, 148
potential applications, 44
prevalence of edge tactics in companies and, 15
redefining company’s participation along, 36–37
trip analogy, 34
using value-added services at Whole Foods Market (see Whole Foods Market)
vertical integration versus, 37
Kanter, Rosabeth Moss, 149
Lamarre, Daniel, 83
Leopold, Aldo, 4
Mackey, John, 44
Major League Baseball Advanced Media (MLBAM), 57–58
mapping customer journey, 40–41, 169–171
margin pressure
airline industry’s response to, 91–95
breaking service bundle and, 94–95, 98
charging for selected elements and, 89
edge strategies for relieving, 19, 163–164
focusing on unprofitable customers, 88–90
fundamental cause of, 98
inside-edge strategy applied in education, 100–101
maintaining protected set of accounts and, 89
prevalence of margin-based edge strategies, 90
using self-service to increase margins, 96–98
using self-service to preserve margins, 98–100
medical device industry, 98–100
mergers and acquisitions
about, 20
acquisition activity among drug companies, 153–154
cross-selling revenue strategy, 149–150
edge mindset and, 164
edge strategy’s role in, 142, 156–157
elements of successful deals, 140
example of growth strategy consistent with edge approach, 154–156
factors determining valuation, 141
failed strategy example, 137–138
historical value of transactions, 138–139
product edge applications, 142–144
reasons companies undertake transactions, 139–140
reasons most deals fail, 140
revenue synergy failure example, 150–153
risk when diversification is goal, 157–158
successful application of edge strategy example (see Procter & Gamble and Gillette)
summary of edge-based acquisition analysis, 145–146
Miller Smith, Charles, 137–138
mission space, customer, 36, 37, 39–40, 41, 117
MLBAM (Major League Baseball Advanced Media), 57–58
monetizing by-products, 54–56, 121–122, 132–133, 172
Nielsen N.V., 84
Odum, Eugene, 4
outside edge strategy. See also product edges
convenience upselling at Hertz, 75–76
criteria fulfilled by outside product edges, 26
edge merchandising and, 117–118
enhancement of core offerings and, 24–26, 28
outside edge opportunities, 23
passion options at Cirque du Soleil, 82–83
patterns in outside product edges, 28
peace-of-mind upselling by auto industry, 80–82
relief options by telecom companies, 78–80
P&G. See Procter & Gamble and Gillette
peace-of-mind upselling, 80–82
Pharmasset, 155
Polanyi, Karl, 5
pricing strategy
sales per customer and, 67
science and art of, 67
Procter & Gamble and Gillette
enterprise edge synergy and, 148
investors’ reaction to merger, 146–148
journey edge synergy and, 148
product edge synergy and, 148
results of merger, 149
product edges
alignment of core offerings with customer needs, 22–23
Apple and (see Apple)
application in mergers and acquisitions, 142–144
customer centricity and, 21–22
edge-based customization, 106, 107–110
hotel industry use of, 109–110
inside edge strategy (see inside edge strategy)
P&G and Gillette merger and, 148
patterns in outside product edges, 28
prevalence of edge tactics in companies and, 15
product fractionation, 168–169
Reed, Mark, 149
relief-oriented upselling, 78–80
revenue synergies
analysis of edge opportunities, 143–144, 145, 158–159
basis in core offerings, 142–143
effectively applying an edge strategy and, 149–150
mergers and acquisitions failures and, 141, 150–153
Riordan, Michael, 154
risk
edge effect and, 3–4, 11–12, 55, 118, 179
enterprise edges and, 55
in mergers and acquisitions, 157–158
upselling and, 83
“roll-up” transactions, 149
Royal Caribbean Cruise Lines (RCL)
base packages, 73
customers’ response to upsell, 74–75
offering of add-on choices, 73–74
segmentation of customers, 167–168
self-service gas stations, 96–98
Severts, Jeff, 156
solutions, edge-based, 106, 110–112
Starbucks, 69
Starwood Hotels & Resorts Worldwide, 143
Stephens, Robert, 156
synergy
edge strategies and, 148
mergers and acquisitions and, 141, 150–153
revenue synergies (see revenue synergies)
tailored clothing businesses, 107–108
telecom industry
benefits from edge-based bundling, 116
Caller ID upsell by, 78–80, 113–114
customer response to bundled edge strategy, 115
Toyota Motor Company
leveraging of foundational assets, 8
selling of data across industries, 126–127
Triangle Pharmaceuticals, 155
Ulrich, Frank, 96
unbundling, edge-based. See also bundling, edge-based
as response to unprofitable customers, 90
strategy of breaking service bundle, 94–95, 98
United Airlines
decision to charge for checked bags, 92–93
economic pressures in 2008, 91–92
results of its edge strategies, 94
upselling
basis of strategy, 68
creating right choices and, 70–71
cruise industry example (see Royal Caribbean Cruise Lines)
journey edge approach to, 69
journey edge upselling statistics, 72
key aspect of possibility-awareness, 69–70
product edge upselling statistics, 71
recognizing opportunities, 163
relief-oriented options, 78–80
trade-offs between edge options, 69
varying-the-core-product approach, 68
Van Noord, Collene, 101
Ventimiglia, Peter, 79
vertical integration, 37
Whitman, Meg, 150
Whole Foods Market
business background, 33, 42–43
leveraging of temporal transitions, 7
results of journey edge strategy, 43–44
use of value-added services to expand edge, 43
wind farms and enterprise edges, 50–51
yield loss, 179