The “value triangle” of quality, speed, and price highlights the inherent trade-offs businesses must make in their offerings, where excelling in two areas often necessitates compromise in the third.

Primary Implication

The “value triangle” establishes the quality, speed, and price tradeoff options available for your products and services.  It is anchored by the reality that you can have two of these values but not all three.

Use it as a decision tradeoff framework for best meeting your customers’ price sensitivity relative to product quality and speed of acquiring your solution to their problem.

Overview

The Value Triangle:  Choosing Your Business Focus

Every business faces a fundamental trade-off:  you can’t be the best, fastest, and cheapest.  This is the “Value Triangle”.  Understanding this helps you target the right customers and find your ideal market position.

Here’s the breakdown of the Value Triangle Trade-Off’s:

• Good and Cheap?  You’ll be slow.  Think handcrafted furniture with a long waitlist.
• Fast and Cheap?  Quality will suffer.  Imagine a budget airline with cramped seats and delays.
• Good and Fast?  Expect a high price tag.  This is the realm of emergency plumbing or overnight shipping.
• Good, Fast, and Cheap?  Almost impossible!

Think about it:

Imagine you need to fly to New York tomorrow.  Booking last minute will be expensive!  But with time to plan, you can find a cheaper flight.  This illustrates the trade-off between speed and price.

Two Paths to Profit:

• Focus on Speed:  Businesses like FedEx thrive on speed.  They invest in infrastructure to deliver quickly, but this comes at a cost.  Customers pay a premium for this convenience.
• Focus on Price:  Other businesses prioritize affordability.  They streamline processes to offer the lowest prices, but can’t handle rush orders.  Think discount retailers and budget supermarkets.

By understanding the Value Triangle, you can make strategic choices about where your business fits in the market.  Choose your two strengths, and build your business profit model around them.