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 Contents

List of Figures vii

Preface xi

Chapter 1: An Introduction to Competitive Business Strategies 1

Historical Concepts of Business and Competitive Strategy 2
The Transaction Premium 4
Terms 6
Review/Discussion Questions 6
Suggested Readings 7

Chapter 2: The Value Frontier 9

Dimensions of the Value Frontier 9
Competitive Strategy on the Value Frontier 15
Terms 17
Review/Discussion Questions 17
Suggested Readings 17

Chapter 3: Thinking Strategically 19

The Strategic Planning Process 19
The Elements of Effective Strategies 24
Terms 26
Review/Discussion Questions 26
Suggested Readings 26

Chapter 4: Product and Brand Strategies 27

Customer Economic Rationality on the Value Frontier 27
Competitive Behavior and the Value Frontier 30
Terms 32
Review/Discussion Questions 32
Suggested Readings 33

Chapter 5: The Firm’s Alternative Market Entry Strategies 35

Required Level of Investment 37
Barriers to Competitor Entry 38

iii
iv Contents

Opportunities for Product Line Extension 39

Initial Market Risk 40
Customer Brand Identification 40
Relative Length of Remaining Market Life 41
Terms 42
Review/Discussion Questions 42
Suggested Readings 42

Chapter 6: Competitive Differentiation and Competitive Advantage 43

Pioneering Strategies 43
Penetration Strategies 45
Skimming Strategies 48
Alternative Customer Responses to Price 50
Challenger Strategies 50
Flanking Strategies 50
Leapfrog Strategies 52
Price and Performance-based Leapfrog Strategies 55
Challengers versus Followers 56
Lock-in Strategies 57
Sunk Cost Lock-in 57
Network Lock-in 58
Bundling Strategies 60
Terms 60
Review/Discussion Questions 61
Suggested Readings 61

Chapter 7: Competitive Response 63

Counter-flanking Strategies 63
Counter-leapfrog Strategies 69
Temporary Price-based Leapfrog (Price Promotions) Strategies 70
Contingent Price-based Leapfrog (Price Matching) Strategies 71
Countering Lock-in and Bundling Strategies 72
Terms 73
Review/Discussion Questions 73
Suggested Readings 73

Chapter 8: Mature Markets and Irrational Competitors 75

Irrational Competitors: Loss Leaders and Predators 76
Signaling Strategies 80
Terms 81
Review/Discussion Questions 82
Suggested Readings 82
 Contents v

Chapter 9: Cooperative Strategies 83

The Basis for Cooperation 83
The Intended Effects of Cooperation 84
Terms 86
Review/Discussion Questions 87
Suggested Readings 87

Chapter 10: The Product Life Cycle on the Value Frontier 89

Stages in the Product Life Cycle 89
Strategic Decision-making and the PLC 91
Terms 95
Review/Discussion Questions 95
Suggested Readings 95

Chapter 11: Strategic Business Unit and Divisional Strategies 97

Strategic Business Unit (SBU) Level 97
Division Level 99
The Company’s SBU Portfolio 99
Contribution Margin versus Full Cost Coverage 101
Sunk Costs versus Recoverable Costs 103
Terms 105
Review/Discussion Questions 105
Suggested Readings 106

Chapter 12: Growth, Integration, and Diversification 107

Relative Competitive Position (RCP) and the Mid-life Extension 107
Forward Integration Strategies and Vertical Marketing Systems (VMS) 109
Diversifying to Internalize Economic Externalities 112
Terms 115
Review/Discussion Questions 115
Suggested Readings 115

Chapter 13: The Art and Science of Competitive Strategy 117

Tools for Evaluating Brand Positions 117
Image Development (Social Cause Marketing) 119
Co-branding and Brand Licensing 120
Customer Relationship Management (CRM) 122
Customer Life-Cycle (CLC) Planning 123
Putting It All Together: The Integrated Competitive Strategy 125
Terms 126
Review/Discussion Questions 127
Suggested Readings 127
vi Contents

Chapter 14: Competitive Strategy in the Age of Technology 129

Enhanced Information Input, Storage, and Retrieval 130
Inputs 130
Storage 131
Retrieval 132
Information Processing 132
Information dissemination 134
Applying Digital Technologies to Enhance Competitiveness on the Value Frontier 135
Competitive Response 136
New Technologies for Developing and Maintaining Customer Relationships 137
Short Message Service 138
Multimedia Message Services 139
Push Notifications 139
App-based Marketing 140
In-game Mobile Marketing 141
Quick Response Codes 142
Bluetooth 142
Proximity Systems 143
Location-based Services 143
Ringless Voicemail 144
The Evolving Digital Marketplace 145
Terms 145
Review/Discussion Questions 145
Suggested Readings 146

Chapter 15: Competitive Strategy in Increasingly Competitive Markets 147

The Competitive Planning Hierarchy 148
The Macroenvironmental Context for Competitive Strategy 151
Why Products Fail 153
The Importance of Continual Environmental Scanning 154
Isolating New Business Initiatives 155
Sustainable Competitive Advantage through Brand Positioning 156
Brand Excellence 156
Customer Relationship Development 157
Reliability and Advanced Design 157
Price Leadership 158
High Style and Fashion 159
Social Status 160
The Future of Competitive Strategy 161
Terms 161
Review/Discussion Questions 161
Suggested Readings 162

Glossary 163
 List of Figures

Figure 1.1 The Firm’s Operational and Competitive Strategies 2

Figure 1.2 A Transaction: The Hypothetical Purchase of a Cup of Coffee (1) 5
Figure 1.3 A Transaction: The Hypothetical Purchase of a Cup of Coffee (2) 5
Figure 2.1 Customer Decision-Making Variables: Initial Salient Variables 10
Figure 2.2 Customer Decision-Making Variables: Quantification of
Surviving Variables 10
Figure 2.3 One Customer’s Ideal Point on the Value Frontier 11
Figure 2.4 Multiple Customers’ Ideal Points of the Value Frontier 11
Figure 2.5 Customers’ Ideal Points and Suppliers’ Value Propositions on
the Value Frontier 12
Figure 2.6 Projective Customer Preference Mapping (1). Hypothetical
Example: Automobile Tires 13
Figure 2.7 Projective Customer Preference Mapping (2). Hypothetical
Example: Automobile Tires 13
Figure 2.8 Customer Preferences Reflected on the Value Frontier 14
Figure 2.9 Market Segments on the Value Frontier: Identification of
Key Market Segments 14
Figure 2.10 Market Segment Migration on the Value Frontier 15
Figure 2.11 Repositioning Existing Value Propositions to Reach New
Market Segments 16
Figure 2.12 Developing New Value Propositions to Reach New Market Segments 16
Figure 3.1 Strategic Planning Process 20
Figure 3.2 Organizational Objectives 25
Figure 4.1 Customer Ideal Points on the Value Frontier 28
Figure 4.2 Customer Ideal Points on the Value Frontier: Ideal Point Migration 29
Figure 4.3 Customer Ideal Points on the Value Frontier: Off-curve Ideal Points 29
Figure 4.4 Customer Ideal Points on the Value Frontier: Producer Quality/Price
Improvement 30
Figure 4.5 Customer Ideal Points on the Value Frontier: Value Frontier Shift 31
Figure 5.1 Alternative Market Entry Strategies 38
Figure 6.1 Pioneer Firm’s Initial Market Position 44

vii
viii List of Figures

Figure 6.2 Pioneer Firm’s Initial Market Position: Higher and Lower Range Value
Propositions 45
Figure 6.3 Pioneer Firm’s Initial Market Position: The Range of Customer Value 46
Figure 6.4 Pioneer Firm’s Initial Market Position: Market Penetration Pricing 46
Figure 6.5 Pioneer and Challenger Firms’ Market Positions: Price and Quality/
Performance-based Penetration Strategy 48
Figure 6.6 Pioneer Firm’s Initial Market Position: Skim Pricing 49
Figure 6.7 Pioneer and Challenger Firms’ Market Positions: Competitor Flanking
Strategy 51
Figure 6.8 Pioneer and Challenger Firms’ Market Positions: Price-based Leapfrog
Strategy 52
Figure 6.9 Pioneer and Challenger Firms’ Market Positions: Performance-based
Leapfrog Strategy 54
Figure 6.10 Pioneer and Challenger Firms’ Market Positions: Price and
Performance-based Leapfrog Strategy 55
Figure 6.11 The Firm’s Lock-in Strategy 59
Figure 7.1 Pioneer Firm’s Market Position: Optional-Pricing Strategy 64
Figure 7.2 Pioneer Firm’s Market Position: Product Lining Strategy 65
Figure 7.3 Pioneer Firm’s Market Position: Market Cannibalization with
Self-flanking 66
Figure 7.4 Pioneer and Challenger Firms’ Market Positions: Pioneer
Counter-flanking Strategy 67
Figure 7.5 Pioneer and Challenger Firms’ Market Positions: Fighting
Brand Strategy 68
Figure 7.6 Pioneer and Challenger Firms’ Market Positions: Price- and
Performance-based Counter-leapfrog Strategy 69
Figure 8.1 Pioneer and Follower Firms’ Market Positions: Crowding on the
Value Frontier 75
Figure 8.2 Game Theory Model: Initial Stasis 78
Figure 8.3 Game Theory Model: Initial Competitive Action 79
Figure 8.4 Game Theory Model: Competitive Response 79
Figure 8.5 Game Theory Model: Preemptive Action 80
Figure 9.1 Value Frontier Shift Following Cooperative Marketing Program
Implementation 85
Figure 9.2 Value Frontier Coverage Following Cooperative Market Program
Implementation 86
Figure 10.1 The Product Life Cycle (PLC): PLC Stages and Customer
Description 90
Figure 10.2 The Product Life Cycle (PLC): PLC Stages and Customer
Classification 92
 List of Figures ix

Figure 11.1 The Levels of Organizational Competitive Decision-making 98

Figure 11.2 The SBU Portfolio: The SBU Development Process 100
Figure 11.3 The SBU Portfolio: Cash Sources and Uses 101
Figure 11.4 The Break-even Model: The Full-cost Model 102
Figure 11.5 The Break-even Model: The Variable-cost Model 103
Figure 11.6 The Product Life Cycle (PLC): PLC Stages and Profit Curve 104
Figure 12.1 The Product Life Cycle (PLC): PLC Stages and the Mid-Life
Extension 108
Figure 12.2 Vertical Marketing Systems (VMS): Three Primary Forms 109
Figure 13.1 Customers’ Ideal Points and Supplier Value Propositions on the
Value Frontier 118
Figure 13.2 The Elements of Integrated CRM Solutions 123
Figure 13.3 The Customer Life-Cycle (CLC): CLC Stages and Consumption
Patterns 124
Figure 13.4 The Elements of Competitive Advantage 126
Figure 15.1 The Competitive Planning Hierarchy 148
Figure 15.2 Core Competency Improvement: Cost Leadership and Differentiation
Strategies 149
Figure 15.3 Competitive Position on the Value Frontier: Creating Competitive
Advantage through Penetration/Leapfrog Strategy 150
Figure 15.4 Competitive Position on the Value Frontier: Creating Competitive
Advantage through Price and Performance-based Repositioning
Strategy 151
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 Preface

The first edition of The Value Frontier broke new ground in presenting a high-level and com-
prehensive overview of the alternative market strategies available to the firm. Our purpose
was to educate current and future managers in the broad options available to their firms as
market pioneers, challengers, and followers. An understanding of the dynamics of the market-
place is even more important today; when product life cycles have grown increasingly shorter,
competitors have more alternatives for entering and exiting new and growing markets, and
there is generally less room for error in strategy development and program implementation.
On-going developments in distribution and communications technologies to meet con-
sumers’ rapidly changing preferences highlight the imperative for firms in a broad range of
industries to implement evermore responsive and flexible strategies. Gone are the days when
organizations could be readily classified as “industrial,” “commercial,” or “retail,” with their
standard strategies and operations. Changing communications and distribution channels,
along with new and innovative business models, necessitate that inside-out strategies become
outside-in strategies. Such strategies apply the firm’s core competencies in creative ways to
overcome the obstacles posed by an evermore rapidly changing set of macroenvironments. An
example can be seen in the case of online retailer Amazon’s response to the competitive threat
posed by resurgent brick-and-mortar retailer Walmart. During the time when we published
the first edition of The Value Frontier, it was tacitly assumed that each competitor occupied
a distinct space in the retail marketplace and that competitive overlaps would be limited to
venue-driven pricing based on convenience and the customer experience.
Since then, these two retailing behemoths have collided in a battle for the hearts, minds,
and wallets of consumers. While each retailer still emphasizes price and cost leadership, they
increasingly appeal to consumers who do not view Walmart and Amazon as operating in
distinct market spaces. Evolving consumer needs emphasize convenience, mobility, and trans-
parency. The advent of mobile technologies has bridged the gap between online and brick-
and-mortar, and a continually evolving sense of customer empowerment drives increasingly
overlapping opportunities for Amazon, Walmart, and a host of other firms.
These developments have led Amazon to explore opportunities in the brick-and-mortar
space (witness Amazon’s acquisition of Whole Foods) and Walmart’s changing approach to
online retail (including free shipping on $25 minimum orders to compete with Amazon’s
Prime service). In the meantime, apparently complacent retailers such as Sears-Kmart, Macy’s,

xi
xii Preface

and Nordstrom are finding that customer market segment drift has put them on a collision
course with a host of brick-and-mortar and online retailers they had not previously viewed
as competitors. Clearly, consumer brand constellations are ever-evolving, and, in combination
with consumers’ changing buying patterns, it is never safe to simply assume that any firm’s
market position is secure.
This newest edition of The Value Frontier will identify and examine how to best prepare
managers for dealing with change. The new and updated examples presented in the text
highlight key developments since the publication of the first edition, and new materials cover
important information for dealing with disruptive innovations that challenge the firm’s mar-
ket position. Our emphasis is still on the market developments that are changing the role of
management but with a renewed focus on the evermore rapid pace of change.
Please feel free to comment on this book and to recommend changes that might improve
the quality of our material and keep it relevant to today’s business environment. We are eager
to make this an essential text for managers who wish to comprehend the larger dynamics of
competitive markets. Enjoy the second edition of The Value Frontier, and good luck with your
business and career endeavors.
 CHAPTER 1

An Introduction to
Competitive Business
Strategies

O rganizational strategy is a set of concepts and processes designed to directly or indirectly

contribute to the creation of value propositions for the firm’s customers while, at the
same time, helping the firm to gain advantages over its competitors. The activities associated
with these concepts, known as the value creation process, include inbound logistics (materi-
als/labor procurement, inbound transportation, warehousing, and inventory management),
manufacturing/production, outbound logistics (warehousing, inventory management, and
outbound transportation), distribution, and sales. The linkage of these activities is the firm’s
value creation process.1
This process can be further classified under operational strategies, those intended principally
to make the firm more cost competitive in its industry, and competitive strategies, designed
to best position the firm’s product and service offerings against its market competitors.
Competitive strategy may best be viewed as the market face of the firm—its presentation of a
value proposition for customers that establishes a market position against current and prospective
competitors. This process, also known as market-facing strategy, involves the definition of prod-
ucts and services, the establishment of distribution channels, price-setting, the development
of marketing communication strategies, creating a corporate/brand image, and providing cus-
tomers with postpurchase service and support. This distinction between operational strategies
and competitive strategies is presented in Figure 1.1.
This book will focus on the tools and dynamics of competitive business strategies. In
order to understand this aspect of organizational strategy, it is important to recognize the
wide-ranging historical and environmental conditions that have given rise to competitive
business strategies as a set of disciplines. Moreover, it is equally important to understand the
transactional dynamics—the interactions between consumers and producers—that ultimately

1
Michael E. Porter, Competitive Advantage (New York: The Free Press, 1985).

1
2 The Value Frontier

C
U
I The Firm’s Value Creation Process
S
N
Inbound Manufacturing/ Outbound T
P Distribution Sales
Logistics Processing Logistics O
U
M
T
E
R
Operational Strategies: Competitive (Market-facing) Strategies:
Procurement Product/Service Definition
Inbound/Outbound Transportation Pricing
Warehousing Marketing Communication
Inventory Management Distribution
Manufacturing/Processing Sales, Service and Support
Corporate/Brand Image

Figure 1.1 The Firm’s Operational and Competitive Strategies.

creates value for both parties. It is these transactional dynamics that inform the competitive
strategies of the firm.
The processes associated with the development of competitive business strategies have a
relatively short history. Until the mid-18th century, the great majority of business transactions
were local and determined as much by regional customs as by market dynamics. Most arti-
sans and tradesmen served relatively small communities and customer-supplier relationships
tended to be of longstanding duration. Therefore, competitive business strategies were both
geographically and culturally circumscribed, creating limited opportunities for new market
entrants and relatively little need for defensive actions by established firms. The focus of most
early firms was therefore on the operational aspects of the business. This changed dramatically
with the advent of the Industrial Revolution. Many businesses changed in scale and scope, as
specialization in expertise and technology led to more complex and frequently less proximal
relationships between customers and their suppliers.

Historical Concepts of Business and Competitive Strategy

In the period between the 1750s and 1820s, most firms operated on the production concept of
business. This view held that economies of scale, generally in the production of staples such
as nails, grains, and fabrics, were critical to finding a broad market for these goods. The cost
of production, and by extension the prices at which goods were offered to customers, was
the driving force of business. As manufacturing economies improved, the emphasis turned
to the product concept of business, the view, which predominated between the 1820s and 1870s,
that one best product should be mass produced for large or mass markets. Businesses were still
seeking to achieve scale economies, but they were now also focused on providing a differen-
tiated and competitive product for a large group of customers, also known as a target customer
 An Introduction to Competitive Business Strategies 3

market segment. In this era, firms such as Colt Firearms, Pears Soap, and Elgin Watches began
their ascendancy.
It did not take long for companies to realize that the product concept of business had its
limitations. Sure, firms could now mass produce for a large market that could newly afford
low-cost fabricated products, but the proliferation of manufacturers and consequent rapid
growth in production capacity resulted in a glut of goods in many markets. This caused many
producers to adopt the selling concept of business, which focuses on aggressive sales strategies to
find a mass market for the firm’s differentiated goods. The advent of the traveling salesperson,
or “drummer,” dates from this era. Many firms fielded a large sales force specifically organized
to reach every corner of their geographic markets and aggressively sell their products. This is
also the era of mass merchandising, epitomized by the emergence of large retailers, including
Sears & Roebuck, A.T. Stewart, John Wanamaker, and Montgomery Ward.The selling concept
of business drove business strategy from the 1870s through the 1940s.
The selling concept of business was facilitated by the development of the railroads in the
United States following the Civil War, as well as in England and much of continental Europe.
Drummers could be dispatched quickly and easily, and Sears & Roebuck could ship its broad
catalog of offerings (which, for a time, even included quasi-prefabricated homes!) throughout
the North American continent. In due time, not unlike the other business strategies discussed
earlier, the selling concept also became passé as mass marketing techniques gained currency.
Since the 1940s, a host of environmental changes have resulted in the marketing concept of busi-
ness, generally referred to as simply “the marketing concept.”
The marketing concept evolved naturally from the selling concept as firms in many indus-
tries became more adept at identifying customers’ unmet needs and in developing suitable
value propositions, including product and service lines, pricing programs, distribution chan-
nels, marketing communications programs, brand identities, and service and support solutions,
to meet those changing needs. Marketing research became a necessary tool for understanding
customers and for anticipating changes in customer preferences. Market segmentation was
further refined in this era as firms battled for supremacy in the service of customers’ evolving
needs and as product life cycles consequently grew shorter. In order to succeed in increasingly
fast-changing markets, firms must continually scan their macro- and micro-environments and
adapt their internal capabilities to remain competitive.
The marketing concept is still the primary operating mode for businesses in developed
economies. There are clear indications, however, that in time the societal concept of business
will become the operating mode for most companies in developed nations. This is currently
driven by the “green movement”—environmentalism and conservation, but is also associated
with a focus on product safety, business ethics, and general corporate responsibility. The soci-
etal concept of business holds that operating a business, even in free market economies is a
privilege and not a right. If the business does not add value to consumers and to society as a
whole, then the people, through their elected government (and its agencies and courts), have
the right—and in some instances the obligation—to punish or shut down the operations of
that business.
4 The Value Frontier

The Transaction Premium

The all-consuming question that all businesses must ask themselves is how they can best meet
the needs to their customers. In this book, we posit that the process of meeting customer
expectations occurs on the Value Frontier. This is the space in which customers and suppliers
meet to conduct transactions. The premise of the Value Frontier is that customers can articu-
late (or at least recognize) their own needs, and that producers can convert these needs into
a set of clearly understood value propositions. The Value Frontier will be described in more
detail later in this book; but first, it is important to understand why customers and producers
would enter into any transaction.
As with all social phenomena, businesses could not survive for long if they did not con-
tinuously add value to society. This means that businesses must transform “zero sum trans-
actions”—where one party to the transaction gains exactly the same value that the other
party loses—into value-generating transactions. They do so by generating a premium for the
producer (the firm) and the customer.
Let’s take a simple example: The purchase of an eight ounce cup of coffee. In this exam-
ple, let’s assume an individual steps off the train in a city with which she is unfamiliar. In the
course of her walk through the city she becomes tired and begins to search for a coffee ven-
dor. Given her lack of familiarity with the city and its coffee vendors, this consumer begins
with a price expectation, based on previous experiences in other places, of $1.20 for an eight
ounce cup of coffee. The traveler soon sees a 7-11 Convenience Store, and enters to make
the purchase. She approaches the coffee stand and notes that the price is $1.00 for an eight
ounce cup.
Will this consumer make the purchase? The answer is yes. The $1.00 price for the coffee
is below her perceived value for the cup of coffee. Therefore, a rational consumer will make
the transaction. Now, we know that with major purchases, rational consumers will seek to
maximize the difference between monetary price ($1.00), the actual monies exchanged, and
their perceived value ($1.20). But with the purchase of a cup of coffee, as with the purchase
of most impulse goods and convenience goods, customers are unlikely to incur the additional
frictional costs associated with search and negotiations, and will simply accept the proposed
price if it is below their perceived value. At this stage, the transaction can be diagramed as
shown in Figure 1.2.
This transaction has created $0.20 in value for the consumer by providing a value propo-
sition that exceeds, in the customer’s perception, the transaction’s monetary cost. Obviously, a
rational consumer will only enter into a transaction that provides her or him with a customer’s
transaction premium. Moreover, as stated earlier, customers will evaluate various value proposi-
tions in a given product/service category to determine which alternative transaction would
provide them with the greatest premium.
So, why don’t all producers seek to maximize their revenues by pricing their goods or ser-
vices just below each customer’s perceived value? There are two key reasons: (1) the frictional
costs mentioned earlier, and the related desire to serve a mass market, lead producers to offer
 An Introduction to Competitive Business Strategies 5

a standardized value proposition to a large number of potential consumers with different value
perceptions; and (2) the desire to retain customers for future transactions and to create posi-
tive word-of-mouth communication between customers and their friends and acquaintances.
In other words, it simply doesn’t make sense to negotiate the transaction of a cup of coffee
with each customer, and all vendors want their customers to come back—with their friends.
Therefore, in most cases marketers set a standard price for their value propositions—a price
that is often substantially below some individual customers’ perceived value.
The foregoing discussion only explains why the customer would enter into this transac-
tion. Why would a producer offer its value proposition to the customer? The answer is that
this customer is willing to pay a higher price than the next-best customer. For this, we must
assume that the next-best customer is only willing to pay $0.90 for an eight ounce cup of
coffee. The difference between what the first customer will pay ($1.00) and the next best cus-
tomer will pay ($0.90), also known as the opportunity cost, is the producer’s transaction premium.
The opportunity cost is, therefore, what the producer gives up (the next-best opportunity) in
order to accept the best available opportunity. This is illustrated by Figure 1.3.
It is important to note that the producer’s marketing transaction premium is not the
same thing as his or her profits from the transaction. This transaction may or may not be

Customer’s Perceived
Value: $1.20

Customer’s
Transaction Premium: $0.20

Monetary
Transaction: $1.00

Figure 1.2 A Transaction: The Hypothetical Purchase of a Cup of Coffee (1).

Customer’s Perceived
Value: $1.20

Customer’s Transaction
Premium: $0.20

Monetary
Transaction: $1.00

Producer’s Transaction
Premium: $0.10

Producer’s Opportunity
Cost: $0.90

Figure 1.3 A Transaction: The Hypothetical Purchase of a Cup of Coffee (2).

6 The Value Frontier

profitable, but the marketing transaction premium is always positive, otherwise the producer
would not enter into the agreement. Just as consumers are rational about seeking the highest
possible premium from each transaction, producers also seek the highest possible transaction
premium—of course, consistent with their long-term goals of customer retention and positive
word-of-mouth.
The foregoing analysis begins to explain how customer–producer transactions add value
to society. By helping to create a perception among customers that they are getting “more
than they pay for”, and giving producers the tools to identify those customers with the high-
est perceived value for their goods and services (and therefore the willingness to pay the high-
est price), transactions benefit all parties. Therefore, the total value of our hypothetical coffee
transaction is $1.30, including the $1.00 monetary exchange and the $0.30 in premium value
created by the process of understanding customers’ unmet needs and wants, and of applying
this intelligence to create a set of appropriate value propositions.
The value creation process is fundamental to the success of any business. Customers and
producers enter into transactions with the aim of maximizing the value of each transaction
consistent with the frictional costs of the transaction, the information available to guide the
transaction, and the long-term value of customer retention and positive word-of-mouth. The
space in which the customer’s expectations and the supplier’s value proposition meet is known
as the Value Frontier.

TERMS
Competitive strategies Product concept of business
Customer’s transaction premium Production concept of business
Market position Selling concept of business
Market-facing strategy Societal concept of business
Marketing concept of business (marketing concept) Target customer market segment
Mass markets The Value Frontier
Operational strategies Value creation process
Organizational strategy Value proposition
Producer’s transaction premium

REVIEW/DISCUSSION QUESTIONS
1. What are the most important differences between operational strategies and competitive strat-
egies? Explain you response by using an example of a current business or industry.
2. How does the producer’s opportunity cost differ from its profits for a given transaction?
Why is the producer’s transaction premium always positive?
3. What are some examples of the emergence of the societal concept of business as the successor
to the marketing concept? How does the societal concept differ from the marketing concept
of business?
 An Introduction to Competitive Business Strategies 7

SUGGESTED READINGS
Fullerton, Ronald,“Segmentation in Practice: An Overview of the Eighteenth and Nineteenth
Centuries,” in Jones, D.G.B. and Tadajewski, M. (eds.), The Routledge Companion to
Marketing History. Oxon, Routledge, 2016, 94.
Kotler, Philip and Gary Armstrong. Principles of Marketing. Pearson, 2014.
Visit https://textbookfull.com
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 CHAPTER 2

The Value Frontier

T he Value Frontier is a conceptual space for a specific product or service where the cus-
tomer’s and producer’s preferences meet. Difficulties arise because customers may not be
able to articulate their unmet needs concerning a product or service category and producers
must, therefore, work with very limited information to develop their value propositions.
This is particularly true in new markets where customers have little experience concerning
product use and functionality, prevailing prices, and related service and support solutions. The
development of value propositions in such markets is, therefore, often a process of trial and
error involving extensive market research and an uncertain value exchange between custom-
ers and producers.

Dimensions of the Value Frontier

As we have seen, even with the purchase of a cup of coffee, an event that occurs millions
of times each day in the United States, consumers are confronted with issues of quality
(Starbucks, McDonald’s, 7-11s, and the local independent coffee vendor), distribution (con-
venience, transaction timing, and immediate gratification), price, and so on. Therefore, we can
view consumers as decision-making machines, weighing the importance of various purchas-
ing criteria, and evaluating these criteria against one another in complex ways. The coffee
scenario, however, is a relatively simple example. In order to gain a better appreciation for this
process, let us look at a more complex purchasing decision: the buying of automobile tires. In
this case, a consumer may consider five salient variables (price, reliability, appearance, handling,
and warranty); each of these will play an important role in how the purchasing decision is
made. This is illustrated by Figure 2.1.
On the graph, these variables appear to be discrete, that is, individually defined and indi-
vidually determined. Without constraints, the consumer would choose the tires with the low-
est price, highest reliability, best handling, finest appearance, and longest warranty. However,

9
10 The Value Frontier

we know that economics, that is, resource limitations, places constraints on consumption,
which means that the consumer must first decide which variables are really significant for his
or her decision-making. The surviving variables will need to be quantified. This is illustrated
by Figure 2.2.
As you can see, the decision variable we called “appearance” is no longer a factor in the
customer’s decision-making. This is simply because it was not deemed sufficiently important
to that particular customer to be included in the decision-making process. Each remaining
variable now has a range that allows the consumer to compare the individual offerings of the
various tire producers. Note, too, that the orientation of price as a decision variable is inverse
to the other variables.This is because, all other things being constant, consumers prefer a lower
price to a higher one. Ultimately, the consumer in our example will need to make trade-offs
among the remaining variables (price, reliability, handling, and warranty). This is illustrated
by Figure 2.3.

Price

Reliability

Handling

Appearance

Warranty

Figure 2.1 Customer Decision-Making Variables: Initial Salient Variables.

Price
Min.

Reliability
Max.
Handling
Max.

Max.

Min. Warranty

Max.

Figure 2.2 Customer Decision-Making Variables: Quantification of Surviving Variables.

 The Value Frontier 11

The result of all of these trade-offs, that is, price versus warranty, warranty versus handling,
handling versus reliability, and so on, is a multidimensional hyperspace (a space with more than
three dimensions) that essentially quantifies each variable in the consumer’s decision-making
against every other variable in his or her decision-making. The resulting space is defined as
the Value Frontier. The Value Frontier is, therefore, all of the possible combinations of salient
decision-making variables relevant to consumers relative to the available value propositions of
suppliers. A hyperspace with four or more dimensions cannot be visualized in graphic form,
so our model is just a three-dimensional conceptualization. Our consumer (now known as
Customer A) is represented on this hyperspace example by a point, known as the customer’s
ideal point, illustrating the tradeoffs made by that specific consumer.
We know that there are multiple consumers in most markets and that they all make their
consumption decisions more or less independently (with the help of advertising, referrals from
friends and experts, etc.). Each consumer, therefore, has his or her own ideal point on the
Value Frontier. This is presented in Figure 2.4.

Price
Min. Cust. A Value
Ideal Point Frontier

Reliability

Handling

Max.

Warranty

Figure 2.3 One Customer’s Ideal Point on the Value Frontier.

Price Cust. C
Min. Ideal Point
Cust. A Value
Ideal Point Frontier

Reliability Cust. B
Ideal Point

Handling
Cust. D
Ideal Point
Max.

Warranty

Figure 2.4 Multiple Customers’ Ideal Points on the Value Frontier.

12 The Value Frontier

In addition, we know that suppliers provide value propositions, also identified as specific
points on the Value Frontier. Each value proposition may be seen as a combination of the
elements of the marketing mix (product, price, marketing communications, distribution, service
and support, and brand image) developed by the firm to satisfy customers’ unmet needs. In
our automobile tire example, these value propositions are represented by the brands Firestone,
Goodyear, Pirelli, and Toyo. (Note that this is being presented as an example and does not
represent the actual offerings or market positions of these suppliers.) The combination of
customers’ ideal points and value propositions (presented as brands) on the Value Frontier may
be illustrated by Figure 2.5.
The multidimensional model that is the Value Frontier shows consumers and producers
in proximity to one another. Each customer will prefer the value proposition, that is, closest
to his or her ideal point, assuming resource availability. On the graphic representation of
the Value Frontier, this appears to be physical distance, but is most commonly calculated as
Euclidean distance in a hyperspace. A projective customer preference map is a rendering, generally
in two-dimensional form, of the relationship of customers’ ideal points to the value prop-
ositions offered by various producers. It provides less information than a multidimensional
rendering of the Value Frontier, but it has the compensating benefit of visual simplicity.
On the projective customer preference map of our hypothetical example, with price as
one dimension and quality/performance (representing reliability, handling, and warranty) as
another dimension, the relative position of customers and suppliers can be illustrated more
simply by Figure 2.6.
Regardless of the method for calculating this distance, each supplier strives to position its
value proposition (or multiple value propositions) as closely as possible to its target customers,
consistent, of course, with customers’ resource limitations.The affinity of our conceptual custom-
ers (ideal points) to the available conceptual value propositions (brands) is illustrated by Figure 2.7.

Toyo Goodyear
Price
Min. “Value
Cust. A Frontier”
Ideal Point Cust. C
Ideal Point

Cust. B
Reliability
Ideal Point

Handling Firestone
Cust. D
Max. Ideal Point
Warranty

Pirelli

Figure 2.5 Customers’ Ideal Points and the Suppliers’ Value Propositions on the Value Frontier.
 The Value Frontier 13

HIGH Cust. D
Price Ideal Point
Pirelli

Goodyear
Cust. B
Ideal Point
Firestone
LOW HIGH
Quality/
Performance
Toyo
Cust. C
Ideal Point
Cust. A
Ideal Point
LOW

Figure 2.6 Projective Customer Preference Mapping (1). Hypothetical Example: Automobile Tires.

HIGH Cust. D
Price Ideal Point
Pirelli

Goodyear
Cust. B
Ideal Point
Firestone
LOW HIGH
Quality/
Performance
Toyo
Cust. C
Ideal Point
Cust. A
Ideal Point
LOW

Figure 2.7 Projective Customer Preference Mapping (2). Hypothetical Example: Automobile Tires.

This can also be presented in the form of the multidimensional Value Frontier of our
hypothetical automobile tire example (Figure 2.8).
In this example, customers A and C are attracted to Toyo’s value proposition; customer B
is attracted to Firestone; and customer D is attracted to Pirelli. On a larger scale, those custom-
ers with proximal ideal points may be seen as a customer cluster, or customer market segment in
the strategy nomenclature. Firms target their value propositions to individual market segments
as depicted by Figure 2.9.
This example shows that suppliers commonly have specific target customer market seg-
ments (or, more simply, target segments) in mind when they develop their value propositions.
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 [With ever-increasing passion.
So fair was thy touch on the golden strings
That my breast heaves high and my spirit sings!
I must out, I must out to the sweet green leas!
I die in the Hill-King’s fastnesses!
He mocks at my woe as he clasps his bride
And sails away o’er the waters wide!
[Shrieks.
With me all is over; my hill-prison barred;
Unsunned is the day, and the night all unstarred.
[She totters and, fainting, seeks to support herself
against the trunk of a tree.
Signë.
[Weeping, has rushed up to her, and takes her in her
arms.] Margit! My sister!
Gudmund.
[At the same time, supporting her.] Help! Help! she is
dying!
[Bengt and the Guests flock round them with cries
of alarm.
 ACT THIRD
The hall at Solhoug as before, but now in disorder after
the feast. It is night still, but with a glimmer of
approaching dawn in the room and over the
landscape without.
Bengt stands outside in the passage-way, with a beaker
of ale in his hand. A party of Guests are in the act of
leaving the house. In the room a Maid-Servant is
restoring order.

Bengt.
[Calls to the departing Guests.] God speed you, then,
and bring you back ere long to Solhoug. Methinks you,
like the rest, might have stayed and slept till morning.
Well, well! Yet hold—I’ll e’en go with you to the gate. I
must drink your healths once more.
[He goes out.
Guests.
[Sing in the distance.]
Farewell, and God’s blessing on one and all
Beneath this roof abiding!
The road must be faced. To the fiddler we call:
Tune up! Our cares deriding,
With dance and with song
We’ll shorten the way so weary and long.
Right merrily off we go.
[The song dies away in the distance.
[Margit enters the hall by the door on the right.
 Maid.
God save us, my lady, have you left your bed?
Margit.
I am well. Go you and sleep. Stay—tell me, are the
guests all gone?
Maid.
No, not all; some wait till later in the day; ere now
they are sleeping sound.
Margit.
And Gudmund Alfson—?
Maid.
He, too, is doubtless asleep. [Points to the right.] ’Tis
some time since he went to his chamber—yonder, across
the passage.
Margit.
Good; you may go.
[The Maid goes out to the left.
[Margit walks slowly across the hall, seats herself by
the table on the right, and gazes out at the open
window.
Margit.
To-morrow, then, Gudmund will ride away
Out into the world so great and wide.
Alone with my husband here I must stay;
And well do I know what will then betide.
Like the broken branch and the trampled flower
I shall suffer and fade from hour to hour.
[Short pause; she leans back in her chair.
I once heard a tale of a child blind from birth,
Whose childhood was full of joy and mirth;
For the mother, with spells of magic might,
Wove for the dark eyes a world of light.
And the child looked forth with wonder and glee
Upon valley and hill, upon land and sea.
Then suddenly the witchcraft failed—
The child once more was in darkness pent;
Good-bye to games and merriment;
With longing vain the red cheeks paled.
And its wail of woe, as it pined away,
Was ceaseless, and sadder than words can say.—
Oh! like that child’s my eyes were sealed,
To the light and the life of summer blind—
[She springs up.
But n o w—! And I in this cage confined!
No, now is the worth of my youth revealed!
Three years of life I on him have spent—
My husband—but were I longer content
This hapless, hopeless weird to dree,
Meek as a dove I needs must be.
I am wearied to death of petty brawls;
The stirring life of the great world calls.
I will follow Gudmund with shield and bow,
I will share his joys, I will soothe his woe,
Watch o’er him both by night and day.
All that behold shall envy the life
Of the valiant knight and Margit his wife.—
His wife!
 [Wrings her hands.
Oh God, what is this I say!
Forgive me, forgive me, and oh! let me feel
The peace that hath power both to soothe and to heal.
[Walks back and forward, brooding silently.
Signë, my sister—? How hateful ’twere
To steal her glad young life from her!
But who can tell? In very sooth
She may love him but with the light love of youth.
[Again silence; she takes out the little phial, looks
long at it and says under her breath:
This phial—were I its powers to try—
My husband would sleep for ever and aye!
[Horror-struck.
No, no! To the river’s depths with it straight!
[In the act of throwing it out of the window, stops.
And yet I could—’tis not yet too late.—
[With an expression of mingled horror and rapture,
whispers.
With what a magic resistless might
Sin masters us in our own despite!
Doubly alluring methinks is the goal
I must reach through blood, with the wreck of my soul.
[Bengt, with the empty beaker in his hand, comes
in from the passage-way; his face is red; he
staggers slightly.
Bengt.
[Flinging the beaker upon the table on the left.] My
faith, this has been a feast that will be the talk of the
country. Eh, are you there? You are well [Sees Margit.]
again. Good, good.
Margit.
 [Who in the meantime has concealed the phial.] Is the
door barred?
Bengt.
[Seating himself at the table on the left.] I have seen
to everything. I went with the last guests as far as the
gates. But what became of Knut Gesling to-night?—Give
me mead, Margit! I am thirsty. Fill this cup.
[Margit fetches a flagon of mead from a cupboard, and
fills the goblet which is on the table in front of him.
Margit.
[Crossing to the right with the flagon.] You asked
about Knut Gesling.
Bengt.
That I did. The boaster, the braggart! I have not forgot
his threats of yester-morning.
Margit.
He used worse words when he left to-night.
Bengt.
He did? So much the better. I will strike him dead.
Margit.
[Smiling contemptuously.] H’m—
Bengt.
I will kill him, I say! I fear not to face ten such fellows
as he. In the store-house hangs my grandfather’s axe; its
shaft is inlaid with silver; with that axe in my hands, I tell
you—! [Thumps the table and drinks.] To-morrow I shall
arm myself, go forth with all my men, and slay Knut
Gesling.
[Empties the beaker.
 Margit.
[To herself.] Oh, to have to live with him!
[Is in the act of leaving the room.
Bengt.
Margit, come here! Fill my cup again. [She
approaches; he tries to draw her down on to his knee.]
Ha, ha, ha! You are right fair, Margit! I love you well!
Margit.
[Freeing herself.] Let me go!
[Crosses, with the goblet in her hand, to the left.
Bengt.
You are not in the humour to-night. Ha, ha, ha! That
means no great matter, I know.
Margit.
[Softly, as she fills the goblet.] Oh, that this might be
the last beaker I should fill for you.
[She leaves the goblet on the table and is making
her way out to the left.
Bengt.
Hark to me, Margit. For one thing you may thank
Heaven, and that is, that I made you my wife before
Gudmund Alfson came back.
Margit.
[Stops at the door.] Why so?
Bengt.
Why, say you? Am not I ten times the richer man? And
certain I am that he would have sought you for his wife,
had you not been the mistress of Solhoug.
 Margit.
[Drawing nearer and glancing at the goblet.] Say you
so?
Bengt.
I could take my oath upon it. Bengt Gauteson has two
sharp eyes in his head. But he may still have Signë.
Margit.
And you think he will—?
Bengt.
Take her? Aye, since he cannot have you. But had you
been free,—then—Ha, ha, ha! Gudmund is like the rest.
He envies me my wife. That is why I set such store by
you, Margit. Here with the goblet again. And let it be full
to the brim!
Margit.
[Goes unwillingly across to the right.] You shall have it
straightway.
Bengt.
Knut Gesling is a suitor for Signë, too, but him I am
resolved to slay. Gudmund is an honourable man; he
shall have her. Think, Margit, what good days we shall
have with them for neighbours. We will go a-visiting each
other, and then will we sit the live-long day, each with his
wife on his knee, drinking and talking of this and of that.
Margit.
[Whose mental struggle is visibly becoming more
severe, involuntarily takes out the phial as she says:] No
doubt, no doubt!
Bengt.
 Ha, ha, ha! it may be that at first Gudmund will look
askance at me when I take you in my arms; but that, I
doubt not, he will soon get over.
Margit.
This is more than woman can bear! [Pours the
contents of the phial into the goblet, goes to the window
and throws out the phial, then says, without looking at
him.] Your beaker is full.
Bengt.
Then bring it hither!
Margit.
[Battling in an agony of indecision, at last says.] I pray
you drink no more to-night!
Bengt.
[Leans back in his chair and laughs.] Oho! You are
impatient for my coming? Get you in; I will follow you
soon.
Margit.
[Suddenly decided.] Your beaker is full. [Points.] There
it is.
[She goes quickly out to the left.
Bengt.
[Rising.] I like her well. It repents me not a whit that I
took her to wife, though of heritage she owned no more
than yonder goblet and the brooches of her wedding
gown.
[He goes to the table at the window and takes the
goblet.
[A House-Carl enters hurriedly and with scared
looks, from the back.
 House-Carl.
[Calls.] Sir Bengt, Sir Bengt! haste forth with all the
speed you can! Knut Gesling with an armed train is
drawing near the house.
Bengt.
[Putting down the goblet.] Knut Gesling? Who brings
the tidings?
House-Carl.
Some of your guests espied him on the road beneath,
and hastened back to warn you.
Bengt.
E’en so. Then will I—! Fetch me my grandfather’s
battle-axe!
[He and the House-Carl, go out at the back.
[Soon after, Gudmund and Signë enter quietly and
cautiously by the door on the right.
Signë.
[In muffled tones.]
It must, then, be so!
Gudmund.
[Also softly.]
Necessity’s might
Constrains us.
Signë.
 Oh! thus under cover of night
To steal from the valley where I was born!
[Dries her eyes.
Yet shalt thou hear no plaint forlorn.
’Tis for thy sake my home I flee;
Wert thou not outlawed, Gudmund dear,
I’d stay with my sister.
Gudmund.
Only to be
Ta’en by Knut Gesling, with bow and spear,
Swung on the croup of his battle-horse,
And made his wife by force.
Signë.
Quick, let us flee. But whither go?
Gudmund.
Down by the fiord a friend I know;
He’ll find us a ship. O’er the salt sea foam
We’ll sail away south to Denmark’s bowers.
There waits you there a happy home;
Right joyously will fleet the hours;
The fairest of flowers they bloom in the shade
Of the beech-tree glade.
Signë.
[Bursts into tears.]
Farewell, my poor sister! Like mother tender
Thou hast guarded the ways my feet have trod,
Hast guided my footsteps, aye praying to God,
The Almighty, to be my defender.—
Gudmund—here is a goblet filled with mead;
Let us drink to her; let us wish that ere long
Her soul may again be calm and strong,
And that God may be good to her need.
[She takes the goblet into her hands.
Gudmund.
Aye, let us drain it, naming her name!
[Starts.
Stop!
[Takes the goblet from her.
For meseems it is the same—
Signë.
’Tis Margit’s beaker.
Gudmund.
[Examining it carefully.]
By Heaven, ’tis so!
I mind me still of the red wine’s glow
As she drank from it on the day we parted
To our meeting again in health and glad-hearted.
To herself that draught betided woe.
No, Signë, ne’er drink wine or mead
From that goblet.
[Pours its contents out at the window.
We must away with all speed.
[Tumult and calls without, at the back.
Signë.
List, Gudmund! Voices and trampling feet!
 Gudmund.
Knut Gesling’s voice!
Signë.
O save us, Lord!
Gudmund.
[Places himself in front of her.]
Nay, nay, fear nothing, Signë sweet—
I am here, and my good sword.
[Margit comes in in haste from the left.
Margit.
[Listening to the noise.] What means this? Is my
husband—?
Gudmund and Signë.
Margit!
Margit.
[Catches sight of them.] Gudmund! And Signë! Are you
here?
Signë.
[Going towards her.] Margit—dear sister!
Margit.
[Appalled, having seen the goblet which Gudmund still
holds in his hand.] The goblet! Who has drunk from it?
Gudmund.
[Confused.] Drunk—? I and Signë—we meant—
Margit.
[Screams.] O God, have mercy! Help! Help! They will
die.
 Gudmund.
[Setting down the goblet.] Margit—!
Signë.
What ails you, sister?
Margit.
[Towards the back.] Help, help! Will no one help?
[A House-Carl rushes in from the passage-way.
House-Carl.
[Calls in a terrified voice.] Lady Margit! Your husband
—!
Margit.
He—has he, too, drunk—!
Gudmund.
[To himself.] Ah! now I understand—
House-Carl.
Knut Gesling has slain him.
Signë.
Slain!
Gudmund.
[Drawing his sword.] Not yet, I hope. [Whispers to
Margit.] Fear not. No one has drunk from your goblet.
Margit.
Then thanks be to God, who has saved us all!
[She sinks down on a chair to the left. Gudmund
hastens towards the door at the back.
Another House-Carl.
 [Enters, stopping him.] You come too late. Sir Bengt is
dead.
Gudmund.
Too late, then, too late.
House-Carl.
The guests and your men have prevailed against the
murderous crew. Knut Gesling and his men are prisoners.
Here they come.
[Gudmund’s men, and a number of Guests and
House-Carls, lead in Knut Gesling, Erik of Heggë,
and several of Knut’s men, bound.
Knut.
[Who is pale, says in a low voice.] Manslayer,
Gudmund. What say you to that?
Gudmund.
Knut, Knut, what have you done?
Erik.
’Twas a mischance, of that I can take my oath.
Knut.
He ran at me swinging his axe; I meant but to defend
myself, and struck the death-blow unawares.
Erik.
Many here saw all that befell.
Knut.
Lady Margit, crave what fine you will. I am ready to
pay it.
Margit.
 I crave naught. God will judge us all. Yet stay—one
thing I require. Forgo your evil design upon my sister.
Knut.
Never again shall I essay to redeem my baleful pledge.
From this day onward I am a better man. Yet would I
fain escape dishonourable punishment for my deed. [To
Gudmund.] Should you be restored to favour and place
again, say a good word for me to the King!
Gudmund.
I? Ere the sun sets, I must have left the country.
[Astonishment amongst the Guests. Erik, in whispers,
explains the situation.
Margit.
[To Gudmund.] You go? And Signë with you?
Signë.
[Beseechingly.] Margit!
Margit.
Good fortune follow you both!
Signë.
[Flinging her arms round Margit’s neck.]
Dear sister!
Gudmund.
Margit, I thank you. And now farewell. [Listening.]
Hush! I hear the tramp of hoofs in the court-yard.
Signë.
[Apprehensively.] Strangers have arrived.
[A House-Carl appears in the doorway at the back.
House-Carl.
 The King’s men are without. They seek Gudmund
Alfson.
Signë.
Oh God!
Margit.
[In great alarm.] The King’s men!
Gudmund.
All is at an end, then. Oh Signë, to lose you now—
could there be a harder fate?
Knut.
Nay, Gudmund; sell your life dearly, man! Unbind us;
we are ready to fight for you, one and all.
Erik.
[Looks out.] ’Twould be in vain; they are too many for
us.
Signë.
Here they come. Oh Gudmund, Gudmund!
[The King’s Messenger enters from the back, with his
escort.
Messenger.
In the King’s name I seek you, Gudmund Alfson, and
bring you his behests.
Gudmund.
Be it so. Yet am I guiltless; I swear it by all that is
holy!
Messenger.
We know it.
Gudmund.
 What say you?
[Agitation amongst those present.
Messenger.
I am ordered to bid you as a guest to the King’s house.
His friendship is yours as it was before, and along with it
he bestows on you rich fiefs.
Gudmund.
Signë!
Signë.
Gudmund!
Gudmund.
But tell me—?
Messenger.
Your enemy, the Chancellor Audun Hugleikson, has
fallen.
Gudmund.
The Chancellor!
Guests.
[To each other, in a half-whisper.] Fallen!
Messenger.
Three days ago he was beheaded at Bergen.
[Lowering his voice.] His offence was against Norway’s
Queen.
Margit.
[Placing herself between Gudmund and Signë.]
Thus punishment treads on the heels of crime!
Protecting angels, loving and bright,
Have looked down in mercy on me to-night,
And come to my rescue while yet it was time.
Now know I that life’s most precious treasure
Is nor worldly wealth nor earthly pleasure,
I have felt the remorse, the terror I know,
Of those who wantonly peril their soul,
To St. Sunniva’s cloister forthwith I go.—
[Before Gudmund and Signë can speak.
Nay: think not to move me or control.
[Places Signë’s hand in Gudmund’s.
Take her then, Gudmund, and make her your bride.
Your union is holy; God’s on your side.
[Waving farewell, she goes towards the doorway
on the left. Gudmund and Signë follow her, she
stops them with a motion of her hand, goes
out, and shuts the door behind her. At this
moment the sun rises and sheds its light into
the hall.
Gudmund.
Signë—my wife! See, the morning glow!
’Tis the morning of our young love. Rejoice!
Signë.
All my fairest of dreams and of memories I owe
To the strains of thy harp and the sound of thy voice.
My noble minstrel, to joy or sadness
Tune thou that harp as seems thee best;
There are chords, believe me, within my breast
To answer to thine, or of woe or of gladness.
Chorus of Men and Women.
Over earth keeps watch the eye of light,
Guardeth lovingly the good man’s ways,
Sheddeth round him its consoling rays;—
Praise be to the Lord in heaven’s height!

24. This no doubt means a sort of arcaded veranda

running along the outer wall of the house.
25. A contest in impromptu verse-making.
 LOVE’S COMEDY

PERSONS OF THE COMEDY

Mrs. Halm, widow of a government official.
Svanhild,
Anna, } her daughters.
Falk, a young author,
}
Lind, a divinity student, her boarders.
Guldstad, a wholesale merchant.
Stiver, a law-clerk.
Miss Jay, his fiancée.
Strawman, a country clergyman.
Mrs. Strawman, his wife.
Students, Guests, Married and Plighted Pairs.
The Strawmans’ Eight Little Girls.
Four Aunts, a Porter, Domestic Servants.

Scene.—Mrs. Halm’s Villa on the Drammensvejen at

Christiania.
 LOVE’S COMEDY
PLAY IN THREE ACTS
 ACT FIRST
The Scene represents a pretty garden irregularly but
tastefully laid out; in the background are seen the
fjord and the islands. To the left is the house, with a
verandah and an open dormer window above; to the
right in the foreground an open summer-house with
a table and benches. The landscape lies in bright
afternoon sunshine. It is early summer; the fruit-
trees are in flower.
When the Curtain rises, Mrs. Halm, Anna, and Miss Jay are
sitting on the verandah, the first two engaged in
embroidery, the last with a book. In the summer-
house are seen Falk, Lind, Guldstad, and Stiver: a
punch-bowl and glasses are on the table. Svanhild sits
alone in the background by the water.
Falk [rises, lifts his glass, and sings].
Sun-glad day in garden shady
Was but made for thy delight:
What though promises of May-day
Be annulled by Autumn’s blight?
Apple-blossom white and splendid
Drapes thee in its glowing tent,—
Let it, then, when day is ended,
Strew the closes storm-besprent.
Chorus of Gentlemen.
Let it, then, when day is ended, etc.
Falk.
 Wherefore seek the harvest’s guerdon
While the tree is yet in bloom?
Wherefore drudge beneath the burden
Of an unaccomplished doom?
Wherefore let the scarecrow clatter
Day and night upon the tree?
Brothers mine, the sparrows’ chatter
Has a cheerier melody.
Chorus.
Brothers mine, the sparrow’s chatter, etc.
Falk.
Happy songster! Wherefore scare him
From our blossom-laden bower?
Rather for his music spare him
All our future, flower by flower;
Trust me, ’twill be cheaply buying
Present song with future fruit;
List the proverb, “Time is flying;—”
Soon our garden music’s mute.
Chorus.
List the proverb, etc.
Falk.
I will live in song and gladness,—
Then, when every bloom is shed,
Sweep together, scarce in sadness,
All that glory, wan and dead:
Fling the gates wide! Bruise and batter,
Tear and trample, hoof and tusk;
I have plucked the flower, what matter
Who devours the withered husk!
Chorus.
 I have plucked the flower, etc.
[They clink and empty their glasses.
Falk [to the ladies].
There—that’s the song you asked me for; but pray
Be lenient to it—I can’t think to-day.
Guldstad.
Oh, never mind the sense—the sound’s the thing.
Miss Jay [looking round].
But Svanhild, who was eagerest to hear—?
When Falk began, she suddenly took wing
And vanished—
Anna [pointing towards the back].
No, for there she sits—I see her.
Mrs. Halm [sighing].
That child! Heaven knows, she’s past my comprehending!
Miss Jay.
But, Mr. Falk, I thought the lyric’s ending
Was not so rich in—well, in poetry,
As others of the stanzas seemed to be.
Stiver.
Why yes, and I am sure it could not tax
Your powers to get a little more inserted—
Falk [clinking glasses with him].
You cram it in, like putty into cracks,
Till lean is into streaky fat converted.
Stiver [unruffled].
Yes, nothing easier—I, too, in my day
Could do the trick.
 Guldstad.
Dear me! Were you a poet?
Miss Jay.
My Stiver! Yes!
Stiver.
Oh, in a humble way.
Miss Jay [to the ladies].
His nature is romantic.
Mrs. Halm.
Yes, we know it.
Stiver.
Not now; it’s ages since I turned a rhyme.
Falk.
Yes, varnish and romance go off with time.
But in the old days—?
Stiver.
Well, you see, ’twas when
I was in love.
Falk.
Is that time over, then?
Have you slept off the sweet intoxication?
Stiver.
I’m now e n g a g e d—I hold official station—
That’s better than in love, I apprehend!
Falk.
Quite so! You’re in the right, my good old friend.
The worst is past—vous voilà bien avancé—
Promoted from mere lover to fiancé.
Stiver [with a smile of complacent recollection].
It’s strange to think of it—upon my word,
I half suspect my memory of lying—
[Turns to Falk.
But seven years ago—it sounds absurd!—
I wasted office hours in versifying.
Falk.
What! Office hours—!
Stiver.
Yes, such were my transgressions.
Guldstad [ringing on his glass].
Silence for our solicitor’s confessions!
Stiver.
But chiefly after five, when I was free,
I’d rattle off whole reams of poetry—
Ten—fifteen folios ere I went to bed—
Falk.
I see—you gave your Pegasus his head,
And off he tore—
Stiver.
On stamped or unstamped paper—
’Twas all the same to him—he’d prance and caper—
Falk.
The spring of poetry flowed no less flush?
But how, pray, did you teach it first to gush?
 Stiver.
By aid of love’s divining-rod, my friend!
Miss Jay it was that taught me where to bore,
My fiancée—she became so in the end—
For then she was—
Falk.
Your love and nothing more.
Stiver [continuing].
’Twas a strange time; I could not read a bit;
I tuned my pen instead of pointing it;
And when along the foolscap sheet it raced,
It twangled music to the words I traced;—
At last by letter I declared my flame
To her—to her—
Falk.
Whose fiancé you became.
Stiver.
In course of post her answer came to hand—
The motion granted—judgment in my favour!
Falk.
And you felt bigger, as you wrote, and braver,
To find you’d brought your venture safe to land!
Stiver.
Of course.
Falk.
And then you bade the Muse farewell?
Stiver.
I’ve felt no lyric impulse, truth to tell,
From that day forth. My vein appeared to peter
Entirely out; and now, if I essay
To turn a verse or two for New Year’s Day,
I make the veriest hash of rhyme and metre,
And—I’ve no notion what the cause can be—
It turns to law and not to poetry.
Guldstad [clinks glasses with him].
And, trust me, you’re no whit the worse for that!
[To Falk.
You think the stream of life is flowing solely
To bear you to the goal you’re aiming at—
But you may find yourself mistaken wholly.
As for your song, perhaps it’s most poetic,
Perhaps it’s not—on that point we won’t quarrel—
But here I lodge a protest energetic,
Say what you will, against its wretched moral.
A masterly economy and new
To let the birds play havoc at their pleasure
Among your fruit-trees, fruitless now for you,
And suffer flocks and herds to trample through
Your garden, and lay waste its springtide treasure!
A pretty prospect, truly, for next year!
Falk.
Oh, next, next, next! The thought I loathe and fear
That these four letters timidly express—
It beggars millionaires in happiness!
If I could be the autocrat of speech
But for one hour, that hateful word I’d banish;
I’d send it packing out of mortal reach,
As B and G from Knudsen’s Grammar vanish.
Stiver.
Why should the word of hope enrage you thus?
 Falk.
Because it darkens God’s fair earth for us.
“Next year,” “next love,” “next life,”—my soul is vext
To see this world in thraldom to “the next.”
’Tis this dull forethought, bent on future prizes,
That millionaires in gladness pauperises.
Far as the eye can reach, it blurs the age;
All rapture of the moment it destroys;
No one dares taste in peace life’s simplest joys
Until he’s struggled on another stage—
And there arriving, can he there repose?
No—to a new “next” off he flies again;
On, on, unresting, to the grave he goes;
And God knows if there’s any resting then.
Miss Jay.
Fie, Mr. Falk, such sentiments are shocking.
Anna [pensively].
Oh, I can understand the feeling quite;
I am sure at bottom Mr. Falk is right.
Miss Jay [perturbed].
My Stiver mustn’t listen to his mocking.
He’s rather too eccentric even now.—
My dear, I want you.
Stiver [occupied in cleaning his pipe].
Presently, my dear.
Guldstad [to Falk].