ENTREPRENEURSHIP

USP & VP

REBP
 A unique selling proposition (USP), or
unique selling position, is a statement
that succinctly outlines how your
business, product, or service is different
from that of your competition. It
identifies what makes your business the
U better choice, and why your target
clients should choose you over the
S competition.
P
The factor or consideration presented
by a seller as the reason that one
product or service is different from and
better than that of the competition.
 USP refers to the unique benefit
e x h i b i t e d b y a c o m p a n y, s e r v i c e ,
product or brand that enables it to
stand out from competitors.The USP
U must be a feature that highlights
S product benefits that are meaningful
to consumers.
P
 The term was developed by television
a d v e r t i s i n g p i o n e e r R o s s e r R e e v e s o f Te d
B a t e s & C o m p a n y. T h e o d o r e L e v i t t , a
professor at Harvard Business School,
suggested that, "Differentiation is one
of the most important strategic and
tactical activities in which companies
must constantly engage.
U
S
A s d e s c r i b e d b y D r. J a m e s B l y t h e , t h e P
USP "contains the one feature of the
product that most stands out as different
from the competition, and is usually a
feature that conveys unique benefits to
t h e c o n s u m e r. " C o m m u n i c a t i n g t h e U S P i s
a key element of branding.
 TIPS on how to make your own USP?

Pinpointing your USP requires some hard soul-

s e a r c h i n g a n d c r e a t i v i t y.
U
• Analyze how other companies use their USPs
S to their advantage (careful analysis of other
companies' ads and marketing messages).
P
• If you analyze what they say they sell, not
just their product or service characteristics,
you can learn a great deal about how
companies distinguish themselves from
competitors.
 TIPS on how to make your own USP?

Charles Revson,
founder of Revlon,
always used to say
he sold hope, not
U makeup.

S
Some airlines sell
P friendly service,
while others sell
on-time service.

A business can peg its USP on Product characteristics,

Price structure, Placement strategy (location and
d i s t r i b u t i o n ) o r P r o m o t i o n a l s t r a t e g y.
 TIPS on how to make your own USP?

PUT YOURSELF IN YOUR

CUSTOMER'S SHOES:

To o o f t e n , e n t r e p r e n e u r s f a l l i n l o v e
U with their product or service and
S forget that it is the customer's
needs, not their own, that they must
P s a t i s f y. S t e p b a c k f r o m y o u r d a i l y
operations and carefully scrutinize
what your customers really want.

Q U A L I T Y, C O N V E N I E N C E , R E L I A B I L I T Y,
FRIENDLINESS, CLEANLINESS,
COURTESY OR CUSTOMER SERVICE.
 TIPS on how to make your own USP?

K N O W W H AT M O T I V AT E S Y O U R C U S T O M E R S '
B E H AV I O R A N D B U Y I N G D E C I S I O N S .

Effective marketing requires you to be an

a m a t e u r p s y c h o l o g i s t . Yo u n e e d t o k n o w w h a t U
drives and motivates customers. Go beyond the
traditional customer demographics, such as
S
a g e , g e n d e r, r a c e , i n c o m e a n d g e o g r a p h i c P
location, that most businesses collect to
analyze their sales trends.
W H AT I S A V A L U E P R O P O S I T I O N ?
https://youtu.be/VZ5rgVgn5qk
 Value Proposition
• It refers to a business or marketing
statement that a company uses to
summarize why a consumer should buy a
product or use a service.
• This statement convinces a potential
consumer that one particular product or
V service will add more value or better solve
P a problem than other similar offerings will.
• It is a promise by a company to a customer
or market segment.
• It is an easy-to-understand reason why a
customer should purchase a product or
service from that specific business.
 Value Proposition

• It should be a clear statement that explains

how a product solves a pain point,
V communicates the specifics of its added
benefit and states the reason why it's better
P than similar products on the market.
• The ideal value proposition is
concise and appeals to a customer's strongest
decision-making drivers.
5 E X A M P L E S O F VA L U E P R O P O S I T I O N Y O U W I S H Y O U H A D

https://youtu.be/IffDMgtJHBI
S T R AT E G Y Z E R ' S V A L U E P R O P O S I T I O N C A N V A S E X P L A I N E D

https://youtu.be/ReM1uqmVfP0
D E V E L O P E D B Y A L E X O S T E R W A L D E R AT S T R AT E G Y Z E R
CASE STUDY(USP& VP)
 Identifying
Attributes
of Strategic
Resources
 Resource-based theory of
sustainable competitive advantage

• useful in studying entrepreneurship

because it focuses on differences
Resource and peculiarities that characterise
any thing or quality entrepreneurs and the founding of
their companies.
that is useful. • treats entrepreneurs as important
and unique resources to the firm,
resources that money cannot buy.
• values creativity, uniqueness,
entrepreneurial vision and intuition,
and the initial conditions (history)
under which new ventures are
created.
 Resource-based theory of
The resource-based theory
sustainable competitive
holds that SCA is created advantage
when firms possess and
employ resources that are: • Buy (or acquire)
cheaply
• Valuable • Transform or Deploy

• Rare (the resources)

• Implement (the
• Imperfectly imitable
strategy)
• Non substitutable
• Sell dearly
 Competitive Sustained
Advantage Competitive
Advantage
Occurs when the
entrepreneur is Competitive advantage
implementing a value- with a very important
creating strategy not addition: current and
simultaneously being potential firms are
implemented by any unable to duplicate the
current or potential benefits of the strategy
competitors

V A L U E C R E AT I N G - A B O V E N O R M A L G A I N O R G R O W T H
 • Resources are valuable when
they help the organization
implement its strategy
effectively and efficiently.
Valuable: • A valuable resource exploits
opportunities or minimizes
threats in the firm’s
environment.
• There are not enough for
all competitors.
• Valuable resources shared
by a large number of firms
cannot be a source of
competitive advantage or Rare:
SCA.
• A resource can be
considered rare as long as
it is not widely available to
all competitors.
 • Firms with rare and valuable
resources clearly have
advantages over firms lacking
such assets.
• Rare resources - Cost higher
Imperfectly • If the price is so high that no
Imitable: profit is made - there is no SCA.
• Where duplication is not
possible at a price low enough
to leave profits, the resource is
said to be imperfectly imitable
(cannot be imitated)
Three reasons for imperfect
imitability:
1. Unique Historical
Conditions
2. Ambiguous Causes and
Effects Imperfectly
3. Complex Social Imitable:
Relationship
(Organizational Culture)
 • refers to the degree to
which common resources
are strategically equivalent
to the valuable and rare
Non resources of another firm.
Substitutable
• very different resources can
also be substitutes.
Management Team 1
• W E L L E D U C AT E D
• EXPERIENCED
• C R E AT I V E
• I N T E R P E R S O N A L LY
M O T I V AT E D
• I N N O V AT I V E

Management Team 2 New Team

They are strategically
equivalent and they
perform the same functions
for both firms effectively.
Even though the 1st top management team is
valuable, rare, and imperfectly imitable, it is not a
source of SCA because a substitute exists and can
be employed.

• Expert-system computer programmer - Manager

• Charismatic leader - well-designed strategic
planning system
• Well-designed programmed-learning module -
inspirational teacher
• When a firm possesses and controls resources
with these 4 characteristics, it can withstand
competitive and imitative pressures.
• If the new enterprise can protect these
resources and maintain these 4 qualities, it will
have competitive advantage over the long
term.

QUESTION:
W H AT A R E T H E B U S I N E S S E S T H AT H A V E T H E S E 4
QUALITIES?
C R E AT E S C O M P E T I T I V E RESOURCE NO COMPETITIVE
A D V A N TA G E DIMENSION A D V A N TA G E

Exploits opportunity Not suited to the

VA L U A B L E environment;
Neutralizes threats
common
Unique
RARE Readily available
Costly to procure
Inexpensive

Unique history Ordinary history

Causally ambiguous I M I TA B L E Causality known
Socially complex Socially simple

Not possible through: Easily possible:

S U B S T I T U TA B L E
Similar modes Similar modes
Different modes Different modes
 ACTIVITY:
Make a list of companies or businesses that have the
following qualities:

get 1/2 crosswise paper

I M P E R F E C T LY N O N S U B S T I T U
VA L U A B L E RARE
I M I TA B L E TA B L E

BE READY TO DEFEND YOUR ANSWERS.

Resource
Types:
 Physical
Resources:

the tangible property the

firm uses in production
Financial and administration.
Resources: This includes firm’s plants
and equipment, its
represent money location and amenities.
assets and fungible
stocks
 Human Technological
Resources: Resources:

• embodied in a
includes the
process, system, or
knowledge, training
physical
and experience of transformation.
the entrepreneur Includes labs, research
and his/her team of & development
employees and facilities and testing
managers and quality control
technologies.
• Physical or legal
entities and are owned
by the organization
Reputational Organizational
Resources: Resources:

the perceptions that includes firm’s

constituents in the structure, routines and
firm’s environment systems.
have of the company
 Reference:

Dollinger, Marc. Entrepreneurship: Strategies and

Resources. 1995

https://www.entrepreneur.com/encyclopedia/unique-selling-
proposition-usp

https://www.investopedia.com/terms/v/valueproposition.asp