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Changing Values and Characteristics

In the entrepreneurial strategies discussed so far, the aim is to
introduce an innovation. In the entrepreneurial strategy dis-
cussed in this chapter, the strategy itself is the innovation. The
product or service it carries may well have been around a long
time—in our first example, the postal service, it was almost two
thousand years old. But the strategy converts this old, estab-
lished product or service into something new. It changes its util-
ity, its value, its economic characteristics. While physically
there is no change, economically there is something different
and new.
All the strategies to be discussed in this chapter have one thing in
common. They create a customer—and that is the ultimate purpose of
a business, indeed, of economic activity.*
But they do so in four different ways:

• by creating utility;
• by pricing;
• by adaptation to the customer’s social and economic reality;
• by delivering what represents true value to the customer.

CREATING CUSTOMER UTILITY
English schoolboys used to be taught that Rowland Hill “invented”
the postal service in 1836. That is nonsense, of course. The Rome of the
Caesars had an excellent service, with fast couriers carrying mail on reg-
ular schedules to the furthest corners of the Empire. A thousand years
later, in 1521, the German emperor Charles V, in true Renais-

*As was first said more than thirty years ago in my The Practice of Management
(New York: Harper & Row, 1954).
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