Abstract
This chapter, which is mainly based on (Forrest et al., to appear, Market-sensing capabilities, profitability within stagnant industries and crafting of customer value propositions), studies the concept of market-sensing capability and its impact on a company from the perspective of market competition. Then it looks at, as a case analysis, sources of profits within a slow growth industry. As a second case analysis, results, developed in this chapter, are employed to reveal how a company can formulate effective customer value propositions (CVPs). This chapter shows, among others, that (1) the capability of market-sensing permits a company to classify customers into various classes, (2) it lowers operational costs while increasing expected profits, (3) the profit of a company within such an industry that experiences slow growth can grow only through a combination of raising unit price and lowering unit cost, and (4) how market knowledge and its innovative understanding can potentially lead to the formulation of effective CVPs. Other than employing any approach that is either statistics- or anecdote-based, this chapter makes use of the rigor of game theory to establish its results. Therefore, compared to empirical studies, results established in this chapter are generally true unless given conditions are violated. At the conclusion, managerial recommendations are listed for decision-makers and potential questions for future research are given.
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Forrest, J.YL., Liu, Y. (2022). Market-Sensing Capabilities and Their Vital Importance in Firm Performance. In: Value in Business. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-030-82898-1_16
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