Table of Figures 1
Building Value 2
Value Proposition 2
Value Positioning Map 3
Tailored Value Chain 4
Strategy as Ecology 7
Table of Figures
Figure 1 Value Proposition of Dish TV 2
Figure 2 Positioning maps for Indian DTH industry 3
Figure 3 McKinsey's Generic Value Chain for Dish TV 4
Figure 4 Activity Systems Map of Dish TV 5
Figure 5 Distribution Channel Design 6
Figure 6 Example of Dish TV's Initiative to reduce taxes (Value Sharing Activity) 7
In the case of Dish TV, the various activities that the company has chosen to undertake reflect the presence of a distinctive value proposition, which is supported by a value chain tailored to achieve it. As we have learnt, the presence of both a value proposition and a tailored value chain are essential for the sustainability of any firm in the industry.
Using the framework given by Magretta1, we can arrive at the distinctive value proposition of Dish TV by answering the 3 questions (which customers, which needs and what relative price). By answering these questions we see that value proposition of the customers is ‘to serve the TV owners in India, by fulfilling their needs for entertainment with a wide variety of choice in programming along with a superior quality of transmission, at a relative price discount’ compared to other companies in the industry.
Figure 1 Value Proposition of Dish TV
Due to the unique nature of the Indian DTH industry where differentiation is not possible in terms of programming content (due to government regulations prohibiting exclusivity) and customers are extremely price sensitive, we would be hard-pressed to find truly distinctive value propositions among the competing firms through this framework. This is because almost all companies are targeting the same needs of the customer. The other ways they can have a distinctive value proposition are in the type of customers they target and in their relative price offering, but the differences in these aspects are relatively minor.
For example TataSky targets a ‘disproportionate share of the premium market and a fair share of the mass market’2. However, due to the novelty of the industry in India, the distinction between both groups is not very clear and many customers keep switching between both descriptions. Also, due to high costs coupled with the need to achieve operational cash flows quickly, companies are in a scramble to get as many customers/subscribers as soon as possible. As a result, most firms do not overtly discriminate between groups of customers. It is also for this reason, that most of them offer similar prices to attract the widest range of customers to themselves. Added to this, is the fact that companies do not have complete independence in pricing, as there are TRAI regulations restricting the premium which can be charged even for a’la carte offerings.
The distinctive nature of Dish TV’s value proposition comes from the way it...