Value-driven product design
A PC company struggling with unit cost disadvantage relative to its competitors identified cost savings opportunities by increasing part commonality across models and leveraging industry standard parts. To maintain customer value through these changes, It developed and employed a consumer back framework for defining the value and differentiation that various parts contribute to the end users' value proposition.
After assessing the company’s product portfolio and design processes, Strategy& discovered that only 40% of parts were used on multiple products and only 2% were PC industry standard. Furthermore, product resulted in a $53 to $92 per unit cost disadvantage across the product lines.
Strategy& defined a market based “DSUV” — Distinct System User Value — to target non-critical features and drive cost savings on existing product. The company captured an 8% unit cost improvement across the product family.