Evaluating a Value Proposition

A company's business situation determines whether it needs a new value proposition, a new business model, or both. Companies must know what the change entails.


Jul 02, 2015

Alex Osterwalder discusses factors that determine whether a company should keep an existing value proposition, embed a current value proposition in a new business model, look for additional value propositions for the same business model, or look for a new business model with a new value proposition. The decision should be.made based on what is happening with the business. Whatever the decision, a company needs to understand what is required to successfully fulfill that decision.


So it really depends on the objective that you have. It’s very legitimate to say you know, I’m just going to focus on value propositions within my existing business models. So if you are a company that has had to invest millions into a platform infrastructure, then you are probably want to increase the return on that investment and say, what are other value propositions that I could create based on that existing platform.

Now, it can also be very different where you know your business model today has expired and you are going to create an entirely – you need to look for entirely new business models, so where value propositions you know have the right to be embedded in totally different business models. So it really depends on the objective where such an innovation project is going to live within a company. You can improve your existing business model and new value propositions. Or you can build new value propositions that require totally different business models.

But see those two things will require very different environments., because if you are starting to question the business model, you’re playing a different ballgame. You need to create a space where you need to allow the business model. So depending on what the objective is, you will find the value propositions design in one part of the company or another.

Published Date: Jul 02, 2015

Author: Michael Krigsman

Episode ID: 135