A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.
|Concept Overview||The Value Proposition Canvas is a strategic tool used by businesses and startups to design, analyze, and improve their value propositions. It helps companies understand the needs and preferences of their target customers and align their products or services with those customer segments effectively. The Value Proposition Canvas is a visual representation that consists of two key components: the Customer Profile and the Value Map.|
|Components||The Value Proposition Canvas comprises two primary components: |
– Customer Profile: This represents the left side of the canvas and focuses on understanding the customer segments. It includes sections for describing the customer’s jobs (tasks they want to accomplish), pains (challenges and frustrations), and gains (desired outcomes and benefits).
– Value Map: Positioned on the right side of the canvas, the Value Map outlines the corresponding aspects of the company’s value proposition. It includes sections for defining the products and services offered (products and services), how they alleviate customer pains (pain relievers), and the benefits or gains they provide (gain creators).
|Applications||The Value Proposition Canvas has various applications in business strategy and development: |
– Product Development: It helps in aligning product features and benefits with customer needs and preferences.
– Market Segmentation: It aids in identifying and targeting specific customer segments with tailored value propositions.
– Marketing and Messaging: The canvas assists in crafting effective marketing messages and communication strategies.
– Innovation: It encourages innovative thinking by exploring ways to alleviate customer pains and create gains.
– Customer-Centric Approach: The canvas promotes a customer-centric approach to business strategy by prioritizing customer needs and value.
|Benefits||Utilizing the Value Proposition Canvas offers several benefits:|
– Customer Understanding: It provides a structured framework for gaining deep insights into customer needs and motivations.
– Alignment: It ensures alignment between what the company offers and what customers value most.
– Differentiation: It helps businesses differentiate themselves from competitors by tailoring their value propositions.
– Efficient Resource Allocation: Companies can allocate resources more efficiently by focusing on areas that create the most value for customers.
– Innovation and Iteration: The canvas encourages ongoing innovation and iteration to continually improve the value proposition.
|Process||Developing a Value Proposition using the canvas typically involves these steps: |
– Customer Profile: Start by identifying the customer segment you want to target and create a detailed profile by listing their jobs, pains, and gains.
– Value Map: Next, consider how your product or service can address the customer’s jobs and provide pain relievers and gain creators.
– Alignment: Ensure alignment between the customer profile and value map to create a compelling value proposition.
– Testing and Refinement: Test the value proposition with customers and gather feedback for refinement. Iterate the process as necessary.
|Challenges||Challenges in using the Value Proposition Canvas include the need for accurate customer research, potential bias in assumptions, and the requirement for cross-functional collaboration within the organization. Additionally, translating customer insights into actionable value propositions can be complex.|
Breaking Down Value Proposition In Business
A value proposition can be defined as the promise of value to be delivered and a belief from the customer that value will be experienced.
Creating a value proposition is a part of a business strategy. Kaplan and Norton say, “Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.”
- Value creation.
- Value delivery.
- And value capture.
And they are all related to customers.
For that matter, an entrepreneur becomes a business designer:
One of the most used, yet most confusing concepts in the business world is “value proposition.”
Many believe they know what they’re talking about, yet you’ll be surprised to discover that what they call value proposition is either a value proposition statement or a distorted version of what it is.
The problem with this kind of distortion are multiple:
- Lack of alignments.
- Lack of clarity.
- Inability to design a proper value proposition.
To have a deep understanding of how value proposition works, we’ll look at the prevailing theories of values available to entrepreneurs.
Jobs-To-Be-Done Theory of value
Theodore Levitt said, “people do not want a quarter-inch drill, they want a quarter-inch hole.”
Therefore, this theory focuses on the jobs-to-be-done by the potential customer. A jobs-to-be-done analysis allows switching the focus toward
- The “job” the customer is trying to get done. This is the unit of the analysis.
- Groups of people trying to get a job done define the market, rather than focusing on a product, or features of a product.
- Customers become job executors.
- This implies that you can group customers’ demographics and psychographics based on the struggles they experience in getting the job done.
A job is defined as:
A “job” is not a description of what the customer is doing, the solution they are using, or the steps they are taking to get a job done. Rather, the “job” statement embodies what the customer is ultimately trying to accomplish.
According to the jobs-to-be-done theory, which also informs the value proposition canvas, those jobs can be summarized as:
- Functional jobs.
- Social jobs.
- Emotional jobs.
- Supporting jobs.
But is this theory all that is when it comes to value proposition? This, of course, is one model available.
Value proposition: tell me why I should buy from you
Kotler – in his book “Kotler on Marketing” – defines a value proposition as to answer a key question for your potential customer: “why should I buy from you?”
According to Kotler, a value proposition is critical as it helps define the context in which the product needs to be positioned.
More precisely the value proposition development has to go through four steps:
- Band positioning.
- Specific positioning.
- Value positioning.
- Total value positioning.
In the brand positioning, for instance, Michael Porter advised a company should be focused on achieving an advantage either as a product differentiator, a low-cost leader, or a niche.
Other frameworks, like the three-way framework from Treacy and Wiersema, proposed the value disciplines, or becoming the product leader, the operational leader, or achieving customer intimacy.
In all those cases, focus is key.
And just to be sure, it isn’t like being competitive in all those aspects can’t be possible.
It is that for that to happen, you need such a budget that a few organizations would make it.
The specific positioning is about – in many cases – choosing a single major benefit that ranges across possibilities such as best quality, best performance, least expensive, easiest to use, and more.
More precisely, according to Kotler, the specific positioning could be
- Attribute positioning.
- Benefit positioning.
- Use/application positioning.
- User positioning.
- Computer positioning.
- Category positioning.
- Quality/price positioning.
In choosing a value proposition, Kotler argues that buyers think in terms of “value for money: or what they get for what they pay.”
- More for more.
- More for the same.
- The same for less.
- Less for much less.
- More for less.
It all starts with a profitable and scalable business model
A value proposition design is critical for the success of a company.
Yet it is important to insert it in but to make it work you need to insert it in the context of a scalable and profitable business model.
Once you understand what a business model is you can start designing it.
There are several methodologies to do it, I’d suggest you start with the Business Model Canvas for enterprise businesses; the Lean Startup Canvas for startups, the Blitzscaling Canvas for scaleups; the FourWeekMBA VBDF framework for tech companies, and the VBDE Framework for Blockchain Business Models.
The value proposition canvas
Once you get through those resources you’re ready to dive into the value proposition canvas.
In fact, the value proposition canvas is like a plug-in to the business model canvas.
In fact, the value proposition canvas focuses on two segments of the business model canvas: “value propositions” and “customer segments.”
What is a value proposition?
The value proposition is about how you create value for customers.
In short, it describes the benefits customers can expect from your products and service, and how it can help them solve pain points and generate short and long-term gains.
What is a value in the value proposition canvas?
The value proposition is really about understanding your customer’s problems and needs.
In short, this is the primary reason that makes you unique compared to others.
You don’t need a thousand words to communicate your value proposition. You need a line:
In fact, today one of the most critical drivers for DuckDuckGo’s growth is privacy.
Where Google has built its business model on the data of its users, DuckDuckGo throws that data away to make the search experience as private as possible.
Thus, with a single line, DuckDuckGo is communicating what makes it unique compared to other search engines, what issue can it solve (privacy) and what gains a user has (avoid tracking from Google).
As pointed out on strategyzer.uservoice.com there are several elements of the product or service that help craft a compelling value proposition:
- “Getting the job done.”
- Cost reduction.
- Risk reduction.
Those elements are critical to putting together a value proposition that comprises two main aspects: a customer profile and a value map.
The customer profile
A customer profile needs to be understood in the function of the market in which the customer is served.
In other words, it doesn’t make sense to make grandiose plans or assumptions about your customers.
Those need to be tested and validated by looking at three aspects.
Understand what’s important and what’s insignificant about customer jobs
Understanding customer jobs might comprise the set of tasks your customers are trying to perform what problems they are encountering and what needs they’re trying to satisfy.
The aim is to prioritize and find what’s important and what’s insignificant.
There are several types of jobs to take into account as explained by strategyzer.uservoice.com:
- Functional jobs.
- Social jobs.
- Emotional jobs.
- Supporting jobs.
Understand what is extreme and what’s moderate about customer pains
One of the most valuable aspects of a product or service is its ability to relieve customers from a pain point, a problem they have, or the obstacle that prevents them from getting the job done.
Thus, this process is really about understanding customers’ frustrations, problems, and pain points.
The main aim is to understand the intensity of those problems as a sort of thermometer that tells you what issues are extreme and what are moderate.
Understand what’s essential and what’s nice to have by generating customer gains
Those comprise the gains that customers required, expect, and desire within the product or service to make them come back.
Also, there is another critical aspect which is about unexpected gains that can be a powerful lever to hook your customers.
Hooking is not about creating tricks that make them stick. But creating so much value that they want to get back to your product and service again and again.
Once profiles the customer it is essential to create a value map.
The value map
Once understood the customer profile, the value map is the tool to fill in the blanks and make the customer profile reflected in the product or service.
In short, the value map allows you to be clear and structured on what specific steps to take to make your customers happy, avoid the pain, and what particular features will help.
Thus you want to focus on three aspects:
- Products and services.
- Pain relievers.
- Gain creators.
Customer gains vs. customer pains
What are customer gains and customer pains?
Customer gains are outcomes or measures of success that save a customer time, effort, or money and make them happy.
Customer pains, on the other hand, are obstacles, fears, or frustrations that present an obstacle to the ideal outcome being achieved.
Broadly speaking, customer gains and pains may be functional, social, or emotional in nature.
Understanding customer gains
Customer gains make jobs-to-be-done and by extension, customers’ lives easier. They have various levels of priority:
- Expected gains – the gains a customer expects from a solution even if that solution could function without them.
- Unexpected gains – the features that exceed expectations.
- Desired gains – those that a customer would love to have but does not expect from a solution.
- Required gains – the features that are critical to a solution’s function.
Understanding customer pains
Customer pains annoy, frustrate, or trouble the customer and can take the form of undesirable or unwanted costs, risks, or emotions.
Customer pains usually arise for the following reasons:
- A lack of productivity – many customers desire a more streamlined experience or want to remove redundancies and inefficiencies. A convoluted checkout process is a common cause of this customer pain.
- A lack of support – these are pains associated with poor or non-existent customer service or a lack of information.
- Financial constraints – such as expensive subscription fees, a lack of price transparency, added checkout fees, and products that must be replaced frequently despite being promoted to last.
- Sub-optimal processes – businesses with sub-optimal processes create pain for their customers in several ways. A customer service team that is only available during business hours is one example.
The relationship between gains and pains
In combination with a customer’s jobs-to-be-done (JTBD), customer pains and gains form part of a customer profile and value proposition.
When building these profiles, however, it’s important to point out that gains are not the opposite of pains.
Consider a restaurant diner whose job-to-be-done is to simply pay for lunch.
If the diner’s credit card is declined for whatever reason, that is a clear customer pain.
But if the credit card is accepted and payment is approved, this is not a gain because the outcome falls under the diner’s normal expectations.
To move beyond the idea that pains and gains are opposites, consider these tips:
- Define what constitutes expectations, as expectations that are not met result in clear customer pains.
- Always look for continuums on which pains and gains can coexist. A customer who receives a coffee from a barista in 2 minutes may be considered a gain, while 5 minutes is considered normal and 10 minutes results in pain because of lost time.
- Then, define the boundaries of those continuums.
- Customer gains are outcomes or measures of success that save a customer time, effort, or money and make them happy. Customer pains are obstacles, fears, or frustrations that present an obstacle to a gain being realized.
- Customer gains may be categorized as unexpected, expected, required, and desired. Customer pains typically arise because of a lack of productivity or support, financial constraints, and sub-optimal processes.
- Note that customer gains are not the opposite of customer pains. In fact, the opposite of customer pain is the customer’s normal expectations for a specific job-to-be-done.
It’s all about product-market fit!
The goal of the Value Proposition Canvas is about designing the value proposition that can make you reach the so-called product-market fit.
Have you reached it yet? If not, it’s time to design your value proposition with the value proposition canvas.
Alternatives to the value proposition canvas
It’s important not to get bogged down on the specific framework to use.
Indeed, there are many other frameworks to be used to map and design a value proposition.
One example is perhaps to start by representing the customer value chain (or the set of steps customers take when dealing with our product and service).
From there map out how each product improvement will impact the customer experience.
And you can go as far as trying to empathize with the potential customer.
Once mapped out or designed the value proposition, there is only as far as you can get with it.
In fact, tapping into existing needs it’s a great starting place, but then you need to have a plan for “demand generation.”
Beyond value: demand generation and why it matters
The common and most accepted entrepreneurial theories of value, stem from the assumption that value exists. That in many cases that can’t necessarily be generated a new.
However, that is not the case.
Extremely successful companies are those able to create a brand that resonates in people’s minds so that even a commodity will be perceived as a status quo, a tool to feel special or to communicate identity.
One example of that is Nike and its ability to use “innovation” as a way to infuse demand generation into its shoes, which otherwise might be well-considered commodities:
You might want to call it marketing, or branding.
But in reality, this is about perception, identity, and how you want your people, the ones that identify with your brand, to feel about themselves.
In short, what you make of your brand is not about you, but about how the people that buy your brand want to feel, think, and identify with you.
This is called demand generation, and it’s at the base of a strong brand, thus a company with a strong business model, where the value proposition is not drawn from existing pains potential customers might experience.
It’s rather created by the brand, and it leverages psychological clues that help the desired audience feel moved and inspired.
Demand generation isn’t an inexpensive endeavor.
Quite the opposite, finding and distributing the message that amplifies the brand requires a lot of experimentation.
And once you stumble on that message, ensuring it gets properly distributed might cost real bucks.
For instance, by 2018, Nike spent $3.5 billion in demand generation alone:
As Steve Jobs put it in a speech dated 1997:
To me marketing’s about values this is a very complicated world it’s a very noisy world and we’re not going to get a chance to get people to remember much about us no company is and so we have to be really clear on what we want them to know about us.
Nike sells a commodity they sell shoes and yet when you think of Nike you feel something different than a shoe company and their ads as you know they don’t ever talk about the product they don’t ever tell you about their soils and why they’re better than Reebok so what Nike is doing in their advertising they honor great athletes and they honor great athletics that’s who they are that’s what theyare about.
While for large companies demand generation can be easily bought.
For startups, it’s more complicated, because they need to do that with a few resources. Indeed, spending most of the budget on demand generation is too risky in the short term.
Yet, creating demand for your product is the most important long-term strategy as it will make the difference between selling a commoditized product at no margins instead of a premium-priced product (which gives the business enough resources to keep financing its R&D, marketing, and operations).
However, demand generation can be inexpensive if done correctly.
While for massive corporations like Nike, it makes sense to spend all this money on demand generation.
For rising companies and startups demand generation can be done at no cost. Demand generation can be done cheaply if you think:
- Unconventionally, do things that for linear thinkers do not make any sense.
- Obliquely, it doesn’t directly promote your company/product, but the connection there is more subtle. Yet when it gets triggered it becomes even more powerful than a linear promotion.
- Other-oriented, it’s not about you, your company, or your product. A successful demand generation campaign at no cost is about others. It’s about making them feel special, unique, and part of something.
Startups can generate demand when they use unconventional marketing tactics (lateral vs. linear thinking), oblique (indirect vs. direct promotion), and centered on making other people feel good about themselves (the iPhone could have never scaled at that premium price if it was only a smartphone).
Apple is a champion in demand generation. Yes, the company is a tech giant, with billions of dollars spent on R&D.
According to LinkedIn, the company employs more than thirty-six thousand engineers and almost thirty thousand IT people as of November 2019. And by 2019 it spent over $16 billion on R&D.
At the same time, the company spent over eighteen billion in sales and administrative expenses primarily due to higher spending on marketing and advertising and infrastructure-related costs (FourWeekMBA Analysis from Apple’s financial statements).
Apple always focused on creating iconic ad campaigns to amplify its brand values.
Amazon value proposition case study
While Jeff Bezos has highlighted over and over again that Amazon is about customer obsession.
Don’t be fooled by that. While Amazon does leverage operational efficiency, speed, and convenience, the company’s brand are as important to make sure people trust it enough to prefer that to the local store in the neighborhood.
This might sound trivial, yet Amazon is a global player that offers more and more localized distribution. This requires an extremely strong brand!
Value and brand building activities
Communication-Market Fit: Alignment between value offered and its storytelling
There is a part of the value that is created, almost magically by changing the way you communicate your product.
That part does not require technical adjustments, features, or engineering.
It simply requires a better understanding of customers’ desires.
The built-in narrative for your product can shape its perception, and with that, it makes the product more valuable, overnight.
For instance, when Apple communicates its products, it seems it’s doing that by explaining plain and clear the technology behind those products.
But in reality, Apple is generating desire, by explaining its technical superiority.
Therefore, those who buy Apple can justify it (to themselves and others) not only with the aesthetic appeal but with technical superiority.
Value and business model innovation
The redefinition of value, from one era to the next is at the core of business model innovation.
Indeed, the innovators are those who change the perspective and reshape the definition of value by challenging accepted and dominating assumptions.
The innovator, therefore, will build up a new definition of value, by testing what customers really want in that time frame.
This connects to the next point.
Breaking down the trade-off between cost and value
As technical innovation becomes available to anyone, at a cheap price, what redefines the rules, in some cases, is a mix of the increased value of a product delivered to more people, for less.
This sort, of innovation in theory is known as the Blue Ocean Strategy.
In reality, this is a messy process, for companies, that in the real world, try to redefine value.
As the technology matures, a product that was only available at substantial costs becomes ready for mass markets.
Those few players, able to unlock these markets, gain a few years of competitive advantage.
Win-win-win value-driven approach
Thus, a multi-faceted value proposition centered around a product and service can align several interests, and create multi-million if not billion industries.
Google, the search engine, has so far a symbiotic relationship with the billion users worldwide, the millions of publishers that enrich its organic index, and the businesses that pay to be featured within its advertising index.
While Google’s recent updates worry many publishers as those added features (mostly instant answers) give answers to users without sending back traffic, thus potentially reducing the opportunities for them.
In the last two decades, Google has propelled entire industries, it has enabled the development of multi-billion dollar companies built on top of its free traffic (companies like TripAdvisor, Booking, Airbnb, Quora, and more) thus establishing industries that otherwise would have not existed without it, in the first place.
The value proposition in the era of customer obsession
A key element of today’s value proposition is the ability of companies to experiment with customers.
Where, in many cases, people might not be sure about what they really want, companies have the resources and the power to experiment and come up with original products.
Thus, testing helps companies also move outside what people think or say they want, to test what they really desire.
When companies move in this direction, this is when customer obsession is achieved.
Indeed, customer obsession is a mixture of guts and experimentation, but then it also looks at data to determine how people really behave, rather than what they say they like.
Perhaps, when a new product is launched or demoed, and orders or pre-orders come in, even though the product is highly innovative, this is one of those skin in the game signs that work as a signal for companies to keep pushing in that direction.
- Value is a generic concept that can change meaning based on context. In the business world, value is usually referred to as how products solve problems for potential customers.
- Therefore, value is the glue of a business model, as it keeps together the core building blocks that might make a company successful in the first place.
- While in the tech-driven world, value is thought of primarily in terms of pain points. There is a good chunk of value that can be unlocked via demand generation and communication-market fit. In short, there are aspects of a product that might make it more valuable by changing the perspective, target audience, and the story built within the product.
Value Proposition Basics:
- A value proposition is the promise of value a customer will experience from a product or service.
- Creating a strong value proposition is an essential part of a business strategy, providing a basis for sustainable value creation.
Value Proposition Components:
- A business model includes value creation, delivery, and capture, all centered around customers.
- The value proposition canvas is a tool to design and analyze value propositions, focusing on customer segments and value propositions.
Jobs-To-Be-Done Theory of Value:
- The Jobs-To-Be-Done framework identifies and categorizes consumer needs based on jobs customers are trying to accomplish.
- Functional, social, emotional, and supporting jobs define customer needs and pain points.
Value Proposition Design:
- Value propositions answer the question, “Why should I buy from you?”
- Specific positioning and total value positioning help define the context in which the product is positioned.
Value Proposition Canvas:
- The value proposition canvas is a tool to design value propositions based on customer segments and their needs.
- The canvas includes customer profiles, pain relievers, and gain creators.
Customer Gains and Pains:
- Customer gains save time, effort, or money and make customers happy.
- Customer pains represent obstacles, fears, or frustrations that hinder desired outcomes.
Achieving Product-Market Fit:
- Product-market fit is the alignment of a product with a market’s needs and desires.
- The value proposition canvas helps design a value proposition that achieves product-market fit.
Demand Generation and Brand Building:
- Demand generation creates desire for a product or service, often through branding.
- Successful brands create unique identities and use demand generation to make customers feel special.
Marketing Strategy and Differentiation:
Value proposition examples
Apple’s value proposition
Amazon value proposition
Google value proposition
Some of those would be:
- Users: a free search engine for billions of users around the world. Users get a free, seamless engine that helps them find an answer to anything. Google also provides now advanced features that enable a very advanced and rich experience for users. Among all the partners, Google’s users are the most important. Even though users don’t pay for Google search, they are at the core of the overall Google business model. Without users, Google would not have a business model in the first place.
- Businesses advertising on Google: The core of the Google business model is advertising, focused on targeted text-based ads for businesses offered via the AdSense network. Before Google existed,d there was no way for marketers to know in detail all the conversion metrics of their ads. While Overture was the first in offering CPC advertising, Google managed to scale it up at massive levels.
- Publishers: Before Google disrupted the advertising world and took over the digital advertising market, a few established publishers could make money via advertising. With its AdSense network, Google also allowed small publishers to monetize their content.
- Developers: in a world where AI and machine learning have become critical to creating products that people want, developers have become even more important than publishers – I argue – for the development and evolution of Google’s future business model.
DoorDash Value Proposition
- For restaurants, more exposure for their brands, and an additional revenue stream.
- For dashers, the ability to earn income flexibly.
- For eaters, the comfort of having food delivered straight to their doors.
Vroom Value Propositions
Vroom is an e-commerce platform for used cars. Its value propositions are in line with its key partners:
- Car buyers, get a curated, wide, and reconditioned inventory, with a set of value-added services (insurance and more), together with the car purchase.
- Car sellers can get the easy valuation of the car, and in this case also a simple setup process to sell the car directly to Vroom.
Honey Value Propositions
- For members Honey makes available discounts, to shop conveniently in many shops, part of the network.
- Stores, part of the network, get additional exposure on the platform, thus attracting more potential customers.
Udemy Value Propositions
- Instructors get an additional income stream, and the ability to work flexibly, with a scalable product, like a course.
- E-learners get access to the Udemy marketplace, with a wide variety of courses, usually available at an affordable price.
- Companies get access to a whole library of courses, so they can reduce the training costs for employees and have a smoother transition with the company, as they have unlimited learning resources available for their growth.
Discord Value Propositions
- Gamers get a platform where they can interact with other gamers.
- Developers get an ecosystem where they can make money by developing games on the platform.
Craiglist Value Propositions
- Users get access to a free website that has any sort of listings, from jobs, to rents and sales of used items.
- Companies get mostly free postings on the platform, except for a few categories of products where the listings is paid.
WordPress Value Propositions
- Website owners get easy to set up a blogging platform for free, with the possibility to expand their capability with plugins and extensions.
- Developers get access to an ecosystem where they can develop their own tools to be hosted on the WordPress marketplace and build a business around that tool.
Key Highlights From The Value Proposition Case Studies
Apple’s Value Propositions:
- Innovation and Creativity: Apple’s products encourage users to think differently and be creative.
- Reliable Tech Devices: Apple offers high-quality devices that cater to mass markets.
- Privacy Emphasis: Apple emphasizes user privacy, setting itself apart from other tech giants.
Amazon’s Value Propositions:
- Customer-Centric Approach: Amazon aims to be Earth’s most customer-centric company, providing a wide range of products and competitive prices.
- Kindle: Provides an easy way to read books on the go.
- Marketplace: Allows businesses to sell products and reach a larger customer base.
Google’s Value Propositions:
- Users: Offers a free and seamless search engine experience to billions of users.
- Businesses Advertising: Provides targeted text-based ads through AdSense.
- Publishers: Allows small publishers to monetize their content.
- Developers: Supports developers in creating products using AI and machine learning.
DoorDash’s Value Propositions:
- Restaurants: Provides exposure and an additional revenue stream to restaurants.
- Dashers: Offers flexible income opportunities to delivery people.
- Customers: Delivers food directly to customers’ doors for added convenience.
Vroom’s Value Propositions:
- Car Buyers: Offers curated, reconditioned inventory and value-added services for car buyers.
- Car Sellers: Provides an easy valuation process and direct selling to Vroom.
- Ease and Convenience: Simplifies the process of buying and selling used cars online.
Honey’s Value Propositions:
- Members: Offers discounts and savings to users while shopping.
- Stores: Provides exposure to partner stores and attracts potential customers.
Udemy’s Value Propositions:
- Instructors: Offers an additional income stream and scalability through course creation.
- E-Learners: Provides access to a variety of affordable online courses.
- Companies: Offers a library of courses to reduce training costs for employees.
Discord’s Value Propositions:
- Gamers: Offers a platform for gamers to interact and connect with others.
- Developers: Provides an ecosystem for game development and monetization.
- Game Sellers: Offers visibility and revenue share opportunities for developers.
Craigslist’s Value Propositions:
- Users: Provides free access to a platform for classified listings.
- Companies: Offers mostly free listings for products, with some paid categories.
WordPress’s Value Propositions:
- Website Owners: Provides an easy-to-set-up blogging platform with expandable capabilities.
- Developers: Offers an ecosystem to develop tools and plugins for WordPress.
Other Case Studies
|Case Study||Description||Application of Value Proposition Canvas|
|Uber||Uber revolutionized the transportation industry by using the VPC to understand both riders and drivers’ needs. They identified that riders needed convenient and reliable transportation, while drivers sought flexible income opportunities. Uber’s value proposition addressed these needs through its ride-hailing platform.||Uber used the VPC to create a clear value proposition that matched riders’ and drivers’ needs, resulting in rapid market adoption and growth.|
|Airbnb||Airbnb disrupted the hospitality industry by utilizing the VPC. They recognized that travelers wanted unique and affordable accommodations, while hosts wanted to monetize their spaces. Airbnb’s value proposition connected these two segments, allowing travelers to book unique accommodations and hosts to earn income.||Airbnb applied the VPC to align the needs of travelers and hosts, creating a platform that offered a compelling value proposition for both sides.|
|Slack||Slack, a communication platform for teams, used the VPC to identify the pain points and needs of professionals in the workplace. They discovered that individuals and teams needed efficient and organized communication tools. Slack’s value proposition addressed these needs by offering a streamlined communication platform.||Slack’s success stemmed from understanding the needs of professionals and crafting a value proposition that directly addressed their communication challenges.|
|Spotify||Spotify utilized the VPC to analyze the music streaming market. They identified that music listeners desired convenient access to a vast music library, while artists wanted a platform to reach a global audience. Spotify’s value proposition integrated these needs, offering a music streaming service that benefited both listeners and artists.||Spotify employed the VPC to build a value proposition that catered to the interests of music listeners and artists, establishing itself as a leading music streaming platform.|
|Tesla||Tesla, an electric vehicle manufacturer, employed the VPC to redefine the automotive industry. They recognized that consumers sought sustainable and high-performance vehicles, while the market needed an innovative approach to transportation. Tesla’s value proposition combined these elements, offering electric vehicles with cutting-edge technology and performance.||Tesla’s success was driven by its ability to align its value proposition with the desires of environmentally conscious consumers and the need for innovation in the automotive industry.|
|Netflix||Netflix transformed the entertainment industry by applying the VPC. They understood that viewers craved convenient access to a diverse library of content, while content creators needed a platform to showcase their work. Netflix’s value proposition addressed both sides, providing a streaming service with a wide range of content.||Netflix used the VPC to bridge the gap between viewer preferences and content creators’ aspirations, leading to its dominance in the streaming industry.|
|Dropbox||Dropbox, a cloud storage provider, utilized the VPC to assess the file storage and sharing market. They identified that users required accessible and synchronized storage, while businesses needed secure and collaborative file management solutions. Dropbox’s value proposition satisfied both needs, offering a cloud storage platform with easy sharing and collaboration features.||Dropbox leveraged the VPC to create a value proposition that catered to individual and business users, establishing itself as a prominent cloud storage provider.|
|Zoom||Zoom, a video conferencing platform, applied the VPC to understand the remote communication landscape. They recognized that professionals and organizations required efficient and user-friendly video conferencing tools. Zoom’s value proposition addressed these needs by providing a reliable and easy-to-use platform for virtual meetings and collaborations.||Zoom’s rapid adoption was fueled by its alignment with the needs of remote workers and organizations seeking effective video conferencing solutions, as identified through the VPC.|
|HelloFresh||HelloFresh, a meal kit delivery service, employed the VPC to assess the food delivery market. They identified that busy individuals desired convenient and healthy meal options, while chefs and food suppliers sought opportunities to reach a broader audience. HelloFresh’s value proposition met these needs by delivering pre-portioned ingredients and recipes to customers’ doorsteps.||HelloFresh’s success was driven by its ability to design a value proposition that appealed to time-constrained consumers seeking convenient meal solutions and suppliers seeking expanded distribution channels.|
|Coursera||Coursera, an online learning platform, utilized the VPC to analyze the education industry. They identified that learners sought accessible and affordable education, while educational institutions desired broader reach and digital learning solutions. Coursera’s value proposition connected these needs, offering a platform with a wide range of online courses and degrees.||Coursera’s growth was driven by its ability to align its value proposition with the aspirations of learners and the needs of educational institutions, as identified through the VPC.|
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Business model case studies:
- How Does PayPal Make Money? The PayPal Mafia Business Model Explained
- How Does WhatsApp Make Money? WhatsApp Business Model Explained
- How Does Google Make Money? It’s Not Just Advertising!
- How Does Facebook Make Money? Facebook Hidden Revenue Business Model Explained
- The Google of China: Baidu Business Model In A Nutshell
- How Does Twitter Make Money? Twitter Business Model In A Nutshell
- How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
- How Amazon Makes Money: Amazon Business Model in a Nutshell
- How Does Netflix Make Money? Netflix Business Model Explained
FourWeekMBA Business Toolbox
What is value and value proposition?
A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.
What is Nike's value proposition?
Nike value proposition starts from its vision “to bring inspiration and innovation to every athlete in the world.” and its mission to “do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.”
What is Uber's value proposition?
Uber’s value proposition starts from its mission to ignite opportunity by setting the world in motion. The ambition of Uber’s business strategy emphasized first creating a whole new market (ridesharing) offering more convenience and flexibility to drivers and riders.
What is Google's value proposition?
Google’s value proposition starts from its mission to “organize the world’s information and make it universally accessible and useful” while its mission is to “provide an important service to the world-instantly delivering relevant information on virtually any topic.” In 2019, Sundar Pichai emphasized a renewed mission to allow people “to get things done!”
What is Facebook value proposition?
Facebook’s value proposition starts from its “mission to give people the power to build community and bring the world closer together as people use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them” as pointed out on the Facebook website.