keymodels
Value proposition design (Ostervalder and Pigneur)
How can value proposition design (ostervalder and pigneur) support strategic choice or positioning?
Contents
Their next book, Value Proposition Design, co-authored with Greg Bernarda and Alan Smith, focused on the central component of the jigsaw, the value.
Value proposition design focuses on the fit between a defined customer segment and the offer created for it. Alexander Osterwalder and Yves Pigneur, working with Greg Bernarda and Alan Smith, developed the value proposition canvas as a detailed companion to the value-proposition and customer-segment elements of the business model canvas.
When to use it
Use the canvas while developing or revising a product, service, business model or new venture.
Origins
Osterwalder and Pigneur published Business Model Generation in 2010, building on earlier business-model work while making the framework unusually visual and accessible. Its business model canvas arranged nine connected components into one view, allowing teams to discuss how an enterprise creates, delivers and captures value.
Their subsequent Value Proposition Design examined the central fit between value propositions and customer segments in greater depth.
What it is
The business model canvas introduced in 2010 contains:
- Customer segments
- the people or organisations for whom value is created
- Value propositions
- the benefits offered to each segment
- Channels
- how the organisation reaches customers and delivers value
- Customer relationships
- how interaction and support are organised
- Revenue streams
- how value is captured and priced
- Key resources
- the assets required to deliver the model
- Key activities
- the work the organisation must perform
- Key partners
- external participants that enable or strengthen the model
- Cost structure
- the economic consequences of the chosen infrastructure.
Business model canvas
Key Partners
Key Activities
Value Propositions
Customer Relationships
Customer Segments
Key Resources
Channels
Cost Structure
Revenue Streams
Value proposition design zooms in on the first two elements. It asks what customers are trying to accomplish, what makes that difficult and what outcomes they value—then examines how a product or service addresses those priorities.
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