By Omar A. El Sawy, Francis Pereira (auth.)
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Extra resources for Business Modelling in the Dynamic Digital Space: An Ecosystem Approach
Thus, the value proposition is the sum total of all the benefits the customer derives from the product or service. As such, it is a measure of the ‘‘value creation’’ that the products or services provide to the customers and thus must satisfy an unmet latent end-user demand. It can be defined in terms several questions that need to be answered: • What ‘‘job’’ are we doing? e. ‘‘I don’t want an MP3 player, I want music’’) • For whom are we doing it? ) • Why is it valuable to our customers? (Better quality?
Examples from other models: • Value proposition, that is, the value created for users by the offering based on the technology (Chesbrough and Rosenbaum 2001) • Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment (Osterwald and Piguer 2009) • Customer value—customers would buy a product from a firm only if the product offers them something of value other products do not have… can take the form of differentiated or low cost products/services (Afuah and Tucci 2001).
Chronologically, beginning on the left, we see that the established Nike footwear business model was the jumping-off point for several new service innovations intended to offer customers the value experience of performance feedback, but many of these service offerings were temporary, experimental, and either failed or remain ancillary to Nike’s main business. About the same time, the concept of people running or exercising while listening to music became increasingly important. Nike tried offering an MP3 player (drawing on a new technology capability) as a service offering for this customer-context, but Apple was so successful in the MP3 ecosystem that customers themselves began two service offerings together: Nike shoes and Apple’s iPod.