Model Canvas

Business Model Canvas

Value Proposition
Your Value Proposition describes the bundle of products and services that create value for a specific Customer Segment. Question to ask
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What value do we deliver to the customer? Which one of our customer's problems are we helping to solve? Which job are we helping the customer get done? Which customer needs are we satisfying? What bundlesof products and services are we offering to each Customer Segment.

More about value propositions Your Value Proposition is the reason why customers turn to your company over another. It solves your customer’s problem or satisfies your customer’s need. Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment.In this sense, your Value Proposition is an aggregation, or bundle, of benefits that your company offers customers. Some Value Propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes. Types of value proposition Your Value Proposition creates value for a Customer Segment through a distinct mix ofelements catering to that segment’s needs. Values may be quantitative (e.g. price, speed of service) or qualitative (e.g. design, customer experience). Elements from the following nonexhaustive list can contribute to customer value creation: Newness Some Value Propositions satisfy an entirely new set of needs that customers previously didn’t perceive because there was no similar offering. This isoften, but not always, technology related. Cell phones for instance, created a whole new industry around mobile telecommunication. On the other hand, products such as ethical investment funds have little to do with new technology.

Performance Improving product or service performance has traditionally been a common way to create value. The PC sector has traditionally relied on this factor bybringing more powerful machines to market. But improved performance has its limits. In recent years, for example, faster PCs, more disk storage space, and better graphics have failed to produce corresponding growth in customer demand. Customization Tailoring products and services to the specific needs of individual customers or Customer Segments creates value. In recent years, the concepts of masscustomization and customer cocreation have gained importance. This approach allows for customized products and services, while still taking advantage of economies of scale. “Getting the job done” Value can be created simply by helping a customer get certain jobs done. Rolls-Royce understands this very well: its airline customers rely entirely on Rolls- Royce to manufacture and service their jetengines. This arrangement allows customers to focus on running their airlines. In return, the airlines pay Rolls- Royce a fee for every hour an engine runs. Design Design is an important but difficult element to measure. A product may stand out because of superior design. In the fashion and consumer electronics industries, design can be a particularly important part of the Value Proposition.Brand/status Customers may find value in the simple act of using and displaying a specific brand. Wearing a Rolex watch signifies wealth, for example. On the other end of the spectrum, skateboarders may wear the latest “underground” brands to show that they are “in.” Price Offering similar value at a lower price is a common way to satisfy the needs of price-sensitive Customer Segments. But low-priceValue Propositions have important implications for the rest of a business model. No frills airlines, such as Southwest, easyJet, and Ryanair have designed entire business models specifically to enable low cost air travel. Another example of a pricebased Value Proposition can be seen in the Nano, a new car designed and manufactured by the Indian conglomerate Tata. Its surprisingly low price makes the...