Overview
our work 
development 
In brief, the fact-based approach means taking an unstructured business question like: "how should we position ourselves in the widget market?" and arriving at a structured solution by identifying and analyzing the fundamental economic drivers which motivate market movers: customers, competitors, complementors, suppliers, and internal business units.
By understanding these drivers in detail, various actions and outcomes can be modeled and an optimal set of strategic actions can be identified. By logically linking actions and expected outcomes, powerful conclusions can be drawn and supported. These conclusions reflect the motivations of economic actors based on today's reality--which may not necessarily agree with what has been observed historically i.e."conventional wisdom". The final output is an unequivocal recommendation of what to do, how to do it, and what will be the likely "bottom-line" result. An example of the power of fact-based analysis is included below to provide additional context about this critical element of our approach to consulting.
Unstructured problem faced by a Dean & Company client:
Where should my price be set for a new technology-oriented service to attract a significant number of customers and earn an attractive return?Conventional wisdom:
Determine internal costs and add a profit margin, then survey customers for their reaction, or their "willingness to pay". Incorporate results to "tweak" price a bit until customer acceptance and margin requirements are satisfied.Drawbacks to conventional approach:
Due to newness of service, internal costs were evolving and customers did not understand the product well enough to provide a reliable judgment on acceptable prices. In addition, the conventional approach provided no insight to customers' choices based on competitors' actions. Further, technology and new competitive entrants were changing so rapidly that customers' choices were becoming more robust almost every month.Fact-based approach:
Develop a detailed understanding of the customer economics driving the choice. What would be the impact on the customers' cost structure were they to buy this product? What would they have to do to realize the savings? What type of customer would be likely to buy the product and take the steps to realize savings? How many of these types of customers are present in the market? How swiftly will they adopt the product? What can be done through product modification or price incentives to speed customer acceptance and purchase? What should our client's message be and how can we get it out most effectively to customers?By assembling factual answers to these and other key questions and assimilating the findings, Dean & Company was able to assemble a clear and logical model of how customers will make choices in this market. More sophisticated customers will be early adopters, but over time all potential purchasers will be powerfully influenced by the same inescapable economic facts. Competitors will similarly be driven to satisfy the economic needs of customers, and those who do so the earliest and most effectively will thrive.
Results:
Our findings regarding the economic drivers of customers along with the model of the business that we subsequently built revealed that a price which was less than half the cost for customers to replicate the service themselves would be both attractive and feasible, and a powerful incentive for early adoption. Though this price was below the client's present cost, the volume of business that would be attracted would quickly reduce costs through economies of scale and identified efficiency improvements. The end result would be a commanding market share position and robust profitability in 2-3 years.The client implemented our recommendations, dramatically altering the playing field in this market, and created a fast growing and highly profitable business unit. By employing our fact-based approach, the client seized the initiative relative to its competitors and is providing its customers with a compelling value proposition.
