If focusing on competitors leads strategists inexorably to the notion of sustainable competitive advantage, focusing on the customer leads them to the notion of value. In the 1981 staff paper "Market strategy and the price-value model," Harvey Golub and Jane Henry introduce a framework designed for industries whose products have a sizable share of intangible or subjective value. Every product or service gives customers some benefit, for which they are willing to pay up to some maximum price. In microeconomic terms, this maximum is the "reservation price," or, in Golub and Henry’s lexicon, simply the value the customer ascribes to the product. The strength of the buying proposition for any customer is a function of its value to that customer, minus the price—in other words, the surplus value that the customer will enjoy once that product is paid for. Golub and Henry’s model plots all products in a certain market on a two-dimensional price-value graph, enabling the strategist to identify underpriced and overpriced products and to spot regions of price-value space that are relatively free of products and therefore ripe for new entries.

Another price-value model, designed more for business-to-business equipment sales than for the consumer goods market, is...