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Abell Analysis

Combining the Value Proposition and Customer Segment building blocks from the Business Model Canvas using the Business Definition Framework

By using Abell's Business Definition Model we can gain more insight in the customers needs and wants, pains and gains, anxieties and desires, whatever you want to call them, to fine tune our value proposition to the right buying reasons. We need to understand WHY customers want to buy into our offering so we can tweak our communication to convey the right message to the right customer. This has everything to do with positioning, image, building relationships and your sales pitch (value proposition).

Dr. Derek F. Abell:

Dr. Derek F. (Francis) Abell is Professor Emeritus and co-founder of the European School of Management and Technology (ESMT), which is established in Berlin, Germany. Abell is also famous for his (further) developed business definition model, the ‘Abell model’.The model provides a good overview of the various consumers, theirs needs and which Technologies could be best deployed to serve these consumers.

Abell started his academic career as an assistant professor at the Harvard Business School in Boston in 1970. In addition he was also a visiting professor at the INSEAD institute in Fontainebleau in France. From 1974, Abell became a partner and professor at the Harvard Business School in Boston. He worked there until 1979 and extended his work into a representation of Europe. In 1981, Abell moved to Switzerland to take up the position of Dean and Professor at theInternational Institute for Management Development (IMD) in Lausanne. At that time Abell also served as a consultant of the United Nations in Eastern Europe. In 1994, Abell became Professor of two Universities namely: Eidgenössische Technische Hochschule (ETH) in Zurich, and Ecole Polytechnique Fédérale (EPF) in Lausanne. He worked there until 2002. In the last years of his career (from 2002) Abell contributed to helping establish the European School of Management and Technology (ESMT) in Berlin.

Mission and Market Definition - The Abell model

In this step the company’s market is formulated. This is done by expressing the mission of the company and the application of the Abell Model, sometimes called the business definition model. The Abell Model is a three dimensional model for defining the business of the company and finding areas for growth and diversification along its axis. The company’s mission is created when three strategic questions to be answered:
  • Who is our target customer group
  • What function do we provide the customer
  • How do we provide for that function (technology)
These issues come together in the Abell model. In Abell model looks at three dimentions:
  • Market Group Dimension. Who are we serving?
  • Problem-solving Dimension. In which needs will we provide?
  • Technology Dimension. How do we provide in the needs?

Positioning: the entrepreneurial approach

In addition the questions asked in the Abell Model, entrepreneurs need to ask questions on competition and customer motivation. So for every MPT one should ask the questions:
  • Who or what are we competing with (competition or substitutes)
  • Why would the customer buy from us and not from our competitors.

Using the three column model: 

I find the three dimensional model very cumbersome and prefer the three columned one. 
  • In the first column you define your customer groups. Customer groups need to have either specific needs or wants for that group, or specific propositions to that needs or wants for that group. Groups that have identical needs or wants and identical propositions should be combined. 
  • In the second column you define the customer needs or wants for that customer group. 
  • Per need or want you state your value proposition to satisfy that need or want in the third column.
  • You can add a fourth column competitors and alternatives with their value propositions if you want. 
It's not uncommon to sketch a new business model canvas for every customer group. 

Customer Groups: Customer needs:
Jobs to be done
Customer Anxieties 
Customer Disires

Urgency
Will to sacrifice
Availability of means
Your Value Proposition:
Product Features
Customer Benefits
User Experience

Value to Customer
Costs to Customer
Competitors, alternatives and their value proposition
 Group 1      
 Group 2      
 Group 3      
 Group 4      

Customer needs explained:
  • Jobs to be done: What do the customers really need, a 10 mm drill of a 10 mm hole? The customer is often asking for a common solution while the problem is not always clear.
  • Customer Anxieties: Fears, worries and sorrow. Often hidden and not clear to the customer. It's the entrepreneurs job to find out what drives your customers. Ask them!
  • Customer Disires: Needs and wants of the customer. Sometimes hidden, sometimes clear. It's the entrepreneurs job to find out what drives your customers. Ask them!
  • Urgency, Will to sacrifice and Availability of means: How urgent are the anxieties and desires of your customers? Do they need to be fixed today? tomorrow? next week? Are your customers willing to bring sacrifices to have their anxieties and desires relieved? Do they have the means to pay for your product/service or are the able to acquire the means?
Your Value Proposition explained:
  • Product Features: How does your product or service fulfil the jobs to be done?
  • Customer Benefits: How does your product or service fulfil the desires a how does it take away the anxieties?
  • User Experience: What does the product or service do for the customers? Does it exite? Does it give peace of mind? Does it bring comfort etc.
  • Value to Customer: How does the product or service create value to the customer
  • Costs to Customer: How do the customers pay for the product (time, money, attention, privacy)

Examples:

Example Abell Analysis for a Car Dealership (3:30, Youtube)

Example Abell Analysis for a new distribution Channel (2:05, Youtube)