For example we take Formule 1 hotels (part of Groupe Accor), which introduced a pioneering budget hotel concept. The Hotels served previously travelers who wanted something between the one – or two-star category. Accor figured out what it could deliver what travelers value most- like easy and speedy check-ins by using a credit card for access, and clean, quiet rooms with bed quality – while reducing what they didn't care as much about- like restaurants, decorated lobbies, architecture, room size, reception desk, price and 24 hours reception.These hotels offered a new, attractive solution for those customers who would otherwise balk at the idea of staying in an economic hotel. In effect, Formule 1 Hotels created a value curve that was completely different from its competitors. Its costs were slashed and its profit margins were doubled that of the industry average, while occupancy rates were also higher. Creating a new value curve is the key to Value Innovation.Price average: € 15 versus/against 30 € the industry priceCost per room:€ 15 versus 41 Cost of staff/sales:20.23 % versus 25-35%Occupancy rate: 3 times averageProfit margins: 2 x industry averageOther examples for the success of this strategy are: EbayCirque du Soleil (by looking across the market boundary of the theater, Cirque du Soleil, also offered new noncircus factors, ech Cirque du Soleil creation has a theme and a story line, somewhat resembling a theater performance. Le Cirque du Soleil also borrows ideas from BroadwaY shows.)SwatchBody ShopIkeaStarbucksRyanair, Easyjetto name a few!!!!
