Category Archives: Working Papers

Service Supply and Asymmetric Demand

Title: Service Supply and Asymmetric Demand
Author: Boxer, P.J. & Cohen, B.
Category: Working
Publication Year: 2003

People expect the behaviours of large, complex systems of systems to be embedded in their personal contexts-of-use. But suppliers of such systems often persuade their users to settle for something less than their particular needs because that something is better than nothing. Digitisation is turning this whole approach to designing complex systems of systems inside out. New approaches are required to understanding the nature of these complex systems which address risk, meaning and composition in ways that place the user of such systems at the centre of their formation instead of at their periphery. This paper outlines such an approach and the demands it places on the processes of collaborative composition.

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Understanding Value Propositions and Effects Ladders

Title: Understanding Value Propositions and Effects Ladders
Author: Philip Boxer
Category: Working paper

A supplier’s users are different in how they expect the supplier to respond to their demands. And the supplier’s users face the same challenge in relation to meeting the range of unique demands of their customers. There are things that a supplier’s user demands that are common across all of a supplier’s users, so that its market can be defined as those users with these common demands that it can supply. This common demand is a symmetric demand because there is symmetry between what the supplier is offering and how its market is defined in relation to its users.

But there is also an asymmetric component of a supplier’s users’ demands. Asymmetric demand is that component of what the user wants that is particular to their way of competing. It is what distinguishes the form of one user’s demand within a market from that of another user. A value deficit arises when there is a failure by the supplier to address this asymmetric component of a user’s demand. That is, a value deficit arises through a failure to address the needs of a user’s particular way of competing.

Such deficits will always arise in relation to users. But the effects of digitization on the efficiency and logistical reach of suppliers is also increasing the supplier’s ability to organize its response to the user’s demand more conveniently and relevantly. The balance of power between the symmetric and asymmetric components of demand is shifting towards having to address the value deficit explicitly in order to counteract fragmenting markets, if not to capture new forms of value. The general tendency to move ‘downstream’ requires suppliers to face difficult choices in how they balance the differing competitive challenges of the supply- and demand-sides of their business. Value propositions provide an approach to capturing these new forms of value.

In what follows, the relation of a supplier to its user is considered. Insofar as the supplier chooses to address the asymmetric nature of the user’s demand, it must understand the nature of the demands on the user by the user’s customers within the user’s context-of-use. This creates a parallel process for the supplier between working with its relation to the direct demands of its users, and working with the indirect demands of its users arising within each user’s context-of-use from the user’s relation to the demands if its customers.

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The question of architecture

Title: The question of architecture
Authors: Philip Boxer & Tom Flynn
Published: Working paper

The pathfinder project is aiming to generate three kinds of benefit in order to deliver step-change improvements in orthotics:
• Level I – defining current demand and realigning product/service protocols to it
• Level II – re-organizing referral protocols and configuration of clinics to improve delivered health care within existing catchments
• Level III – extending organization of hubs-and-spokes to include re-organization of catchments within Primary Care Trusts
The pathfinders have so far established that the scale of level II benefits are significantly greater than Level I benefits, because of the role of the clinic within the larger Primary, Acute and Long Term care contexts. It is expected that this will continue to be true for Level III benefits, although these will not be examined until the end of the pathfinder process. The question addressed by this paper is how these different levels of benefit are to be achieved on a larger scale across the UK’s National Health Service.

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Is the customer an endangered species? Niches and Clusters

Title: Is the customer an endangered species? Niches and Clusters
Authors: Philip Boxer & Dr Robin Wensley
Category: Working paper

We link together some of the current evidence and experience in consumer and industrial market segmentation studies. The primary consequence of this work is to refocus our attention away from the concept of the product market, a single or multiple resource to be exploited by businesses, towards the concept of the active customer: the customer who uses the various producer offerings by configuring them in such a way as to support his or her needs as best as s/he is able. Such a refocusing suggests a parallel view of market organisation in support of such active customers. In this respect, we echo Wroe Alderson’s writing, and are able to develop his ideas by looking more closely at the ways in which channels of distribution are able to balance the interests of the systems that they link: active customers; and the businesses supplying the channels of distribution. Our conclusion is that the word ‘niche’ has been used to support a view of market organisation which has encouraged a relationship between businesses and customers which does not consider the effect business has on its customers. We will argue that the view parallel to that of “market organisation” is that of “demand organisation”.

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