Topic:Value Proposition and Value Innovation

From SharedExperienceProject

Contents 1 Topic Highlights 2 Introduction and Motivation 3 Learning Activities 4 Learning Objectives 5 References

Topic Highlights

(What you will learn)

• The basics of what is meant by the term value proposition
• How to analyze the value proposition of a company, its substitutes and its competitors (among other groups)
• How to communicate that value proposition using a simple visually appealing value curve
• How and when to create a new value proposition with the potential of capturing new groups of customers

Introduction and Motivation

(Why learn it)

A clear description of the value proposition is key to analyzing, understanding, and communicating a company's business model.

This topic borrows from work presented in a very interesting paper^[1], to provide one of the most useful analytical tools a strategist can have in his or her toolbox. It allows you to think at a high level about the value you can / should offer to customers, and it encourages you to "think outside the box" to create new markets to which your competitors may not have access.

It is also useful for analyzing companies like WestJet, [yellow tail] and Cirque du Soleil, and some of the reasons they have been so successful.

Learning Activities

(How the levels of understanding will be gained)

Learning activities for this topic

Type	Name	Direction
Reading	Read before class: Creating New Market Space	Self-directed
Lecture and discussion	What's your economic offering? Your value proposition?	Instructor-directed
In-class activity	Get the Job!	Peer-directed
Personal activities	Reflection and review, e.g. of the activity and the learning objectives given below in this page	Self-directed

Learning Objectives

(Levels of understanding to be gained)

Learning objectives for this topic

Level of Understanding	Objective(s)
Very best	Can I do a value curve analysis for a new company, e.g. one entering an industry for the first time or wanting to gain market share? Based on the curves of the substitute and average competitor, am I comfortable knowing that I could recommend what the new company might reduce, raise, eliminate or create?
Highly satisfactory	Given a company and industry, can I identify the dimensions of competition (as we did in the second part of the in-class activity)? Can I link the value curve to a discussion of the overall business model?
Satisfactory	Given the points of value upon which a company competes, can I draw the value curves for the company, its substitutes, and its competitors (as we did in the first part of the in-class exercise)? For appropriate examples, can I identify the points of value that may have been reduced, raised, eliminated or created?
Maybe just enough to pass	Do I understand what a value proposition is? Can I name the axes that are normally used in creating a value curve?

References

1. ↑ Kim, W.C. and R. Mauborgne (1999) Creating New Market Space, Harvard Business Review, Jan-Feb, 1999, pp. 83-93.