4. The Ofmos

Note: This essence-only approach saves you time. Yet despite appearances, the content is rich. Remember, "A picture tells a thousand words!" Therefore, we recommend careful analysis of the axiom and the chart (click to enlarge) before joining the discussion. (For your convenience, you can also download a PDF version of all chapters.)

Comments

[Cristian]

What's with the terms "ofmos" and "tofmos?" ...They are just simple concoctions consisting of the words "offering," "market," "microcosmos," and "total."

OFMOS = (OF)fering + (M)arket + microcosm(OS)
TOFMOS = (T)otal + (OF)fering + (M)arket + microcosm(OS)

So, an ofmos is a microcosmos defined by a vendor's offering and a set of customers that have the same behavior relative to the offering, while a tofmos is a microcosmos that includes all (one or more) similar ofmos withing the same community. Easy! But I'll get back with more explanations because understanding these concepts is key to understanding the whole theory.

Cristian | BizBigPic

[Alex]

Hello! I really just don't understand this slide. What are the blue dots? Why are the two diagrams both split into a left part and a right part? Is the diagram on the left the tofmos as opposed to the diagram on the right which is marked "ofmos"? How many vendors are shown on each diagram -- are there two vendors? Or is it two different products of the same vendor? As we go from left to right in each diagram, are we going along the same minor issues-major issues scale introduced in the previous slides? Thank you.

[Cristian]

Hi Alex! Here are some points that might help answer your questions:

---The "diagrams" are representations of a small section of the Offering Map (the intersecting lines are sections of the lines that separate the 9 zones of a complete Offering Map, as shown in slide 3). In fact, they are identical, showing the same section of the map. Only the perspective is different - individual transactions (blue circles) and ofmos (purple diamonds).
---The chart on the left shows unique transactions between a single vendor and several customers that have the same problem solving behavior relative to the transacted offering. That is why the blue circles (transactions) appear grouped together on the map.
---Additionally, customers with similar problem solving behavior tend to belong to already-existent homogenous groups of customers (groups held together by geopolitical, social, trade, and/or other type of bond). This ensures that the problem solving behaviors within the group remain similar over time. So, even as an offering commoditizes, the associated transactions generated by the customers in such group will continue to appear grouped together on the Offering Map. As a result, we can treat this system of transactions as a unique commoditizing entity, the ofmos. (This shift in perspective is highlighted on the map with the dotted purple line.)

For example, let's consider a hypothetical company of which business consists of selling the same type of PC to individuals in only two countries. While one country is technologically advanced, the other is not. Let's assume that each population is homogenous relative to the PC offering. In other words, all individuals of one country have and maintain (over time) a similar problem solving behavior relative to the PC offering. As a result, at any given time, the company's transactions tend to appear as two distinct groups of transactions on the Offering Map. Consequently, the company's business can be seen as a portfolio of two commoditizing ofmos.

I hope this helps. Thanks for participating, and please don't hesitate to ask more questions.

Cristian | BizBigPic

[Cristian]

One of the biggest sins of the traditional teachings in business is that it trains us to think about offerings (products and services) in isolation, without considering their context. For clarification, here are two examples:

1) Most of you have heard of, or participated in discussions about "star" offerings, right? How about "dog" offerings? Well, the problem with this way of thinking is that it ignores the offering’s context by assuming that all customers see (or behave relative to) that offering in the same way. As you all know, in reality, the same offering can be a "star" for some customers and a "dog" for others.

2) Also a favorite of mine is the fashionable "service-centered organization," or something along this line. The problem here is that the advocates of this movement ignore (or don't understand) that SERVICES ARE COMMODITIZING TOO. Like in the previous example, they ignore the context by assuming that all customers see services as some kind of premium offerings. In addition, they assume that premium offerings will maintain their premium status over time for the same set of customers. And that is all false.

So, why are we stuck with this narrow way of thinking? Because although every offering commoditizes over time, meaning that customers learn how to employ it better, the process of generating it might not change. As a result, a manager can be easily trapped into a stationary view of her or his offering. (Sure, there are other reasons, but this one is arguably the most important.)

The ofmos, as entities defined by an offering and a set of customers with a particular behavior, solve this problem. The new concept enables us to generate a comprehensive picture of an organization that includes not only its offerings, but its markets as well.