9.22.2008

Value Proposition in Virgin Paradise

I recently returned from a consulting gig in the US Virgin Islands -
no, really - and the assignment was a fascinating exercise in the
importance of value proposition. It's an entrepreneurship term but
with economic roots: value proposition basically means that you are
offering some unique, better thing to the marketplace of people making
choices. The main consumer places like the US Virgin Islands tend to
think about are tourists, are rightly so, as island economies tend to
be heavily tourism-oriented.

And it is an appropriate customer to consider, and the USVI is trying
to do what any tourist destination is trying to do: maximize the
tourist experience so that as many tourists come, have as good a time
as possible, and tell as many people as possible. And there are
tangible things you can do to make that work for you: promote more
aggressively to potential vacationers, enact laws to minimize things
that aggravate tourists (like pushy cabbies or shopkeepers), and
invest in infrastructure that enhances the tourist experience
(sidewalks, ferries).

Of course, the reason why tourism is big business in a place like the
USVI is that it is one of the Territory's unique assets. You can't
sell a tropical vacation to Kansas City, after all. Hence, though it
is right for the local economy to consider ways to diversify out of
tourism (since tourism is such a cyclical industry and is vulnerable
to national and global economic downturns), it is also right for the
local economy to continue to invest in tourism efforts (since it's the
best thing it can offer that no one else can offer).

Another locational value proposition question we are tasked with is
selling the USVI to businesses which are looking for new sites to
locate. In an increasingly global business order, anything from hedge
funds to rum refinery plants can be located anywhere, and where these
things get sited depends on the various value propositions of the
places being considered. So we spent a fair amount of time talking to
local public and private sector folks about the various strengths and
weaknesses of the USVI as a place to do business, from which we will
be helping the Territorial government craft a marketing message to
businesses looking for locations that the USVI is perfect for them.

That's all I can say at this point, but I hope I've conveyed the
importance of determining and marketing one's unique value
propositions. We think about this all the time in Philadelphia, and
being hired to think about it for a place like the US Virgin Islands
has been an enjoyable way to see the same principles play out in a new
setting. There's not much this island territory has in common with
the City of Brotherly Love, but when it comes to attracting visitors,
diversifying one's economy, and being a preferred place to locate a
business, the principles are the same.

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