All business model frameworks have the customer and the value proposition, or offer, as key elements. The value proposition is described as the products or services offered to different customers segments, and is a function of key resources and key processes (or activities) given to the input from suppliers (or partners). In some of the frameworks, partners are also included as an element to provide external resources and activities to enable the company to provide its value propositions. One of the things I'm missing in these frameworks is the perspective of co-creation of value. Value creation from the customers' perspective is not necessarily sequential, all captured in one company's value propositions, but in many cases parallel, offered simultaneously by different actors.
The business model concept takes its starting point in how an organization creates and captures value. Since the 1960s, different frameworks have been presented to capture the building blocks of value creation. Almost all frameworks take their starting point in the organization, or the firm, and what is being provided as output from within the organizational boundaries. This made sense when competition was based on one company's dominance of some asset or mastery of production, but I don't know if it is sufficient to innovate business models today. To clearly describe or analyze Google's business model for Android, without including what other companies such as handset manufacturers or app developers provide the same customers, is impossible. (Great guest post: Is Android Evil?)
When designing business models, do not limit your thinking to the value you are creating or potentially could create combining external resources and activities, but include complementary values that others could provide, in the business model equation. Perhaps there should be business model frameworks taking the starting point in customer value creation, not limited to what one business can provide?
Is there a need for customer value creation models? Are there any good ones out there?
Hi Anders,
ReplyDeleteInteresting point. For my work, i.e. in my Business Model-Framework (result of my dissertation), I'm adressing this point via the integration of the NABC-Tool. Co-Creation can be formulated or visualized in the "A" of the NABC-Tool, i.e. the Approach. Co-Creation by itself is not a specific component in my framework.
http://www.businessmodelcreativity.net/files/2011/11/bmposter_21.jpg
I would discuss or develop customer value creation via personas and customer experience/ journey design and bring the results via the NABC-Tool and an adequate value proposition into a business model framework. I'm not sure if we need specific customer value creation models.
Best Regards
Andreas
Alex O's Customer Value Canvas might be aiming to that direction?
ReplyDeleteThe Business Model Canvas is an abstraction that does not rule out joint ventures, consortiums, ppp's etc. It focuses on the quintessential building blocks, leaving space to define the bounderies of the concept of 'organization', key resources and key partners. Doesn't it?
ReplyDeleteThank you for your comments, and for updating me on an interesting new canvas from Alex.
ReplyDelete@A...
Interesting canvas, I have not looked at it before and I have not talked to Alex about it. http://www.businessmodelalchemist.com/2012/01/the-customer-value-canvas-v-0-8.html
Alex writes that " It describes: (A) For each Customer Segment: which jobs a customer is trying to get done, and all the related customer pains and customer gains (B) For each Value Proposition: the bundle of products & services targeted at the customer and how they are expected to create gains or relieve pains.
After reading his blogpost my comment is that, yes it seems to be aiming to that direction, yet to my understanding it is a breakdown of the value proposition, still from the organization you analyze. If you in the left hand side would include value proposition from others towards the customer for "gain creators" and "pain relievers", to complement your own value propositions, I think it would be even more in the direction I'm asking for. I'm looking forward to hear more about the new canvas, and I'm glad to see that Alex continues to innovate.
Thanks for pointing out the framework!
@Coprocessor
Thanks for your comment. I fully agree with you that it is possible to use the canvas abstraction to look at a joint-venture, a consortium, public-private-partnership etc. thus defining the boundaries of the concept of 'organization' differently. However, starting from a customer perspective, with for example "the job to be done" or "pains/gains" my point is that it might be a range of organizations (not necessarily organized together in any form) that together enables "the job to be done". Using the canvas for what I'm looking for might be possible, I would however use different canvases for the different organizations and then see how the different value propositions from the different organizations fit together to get the job done. To do so, I don't need to use all the elements of the canvas for the different organizations, thus there should be a more efficient way of looking at this. Shouldn't it?
//Anders
@Andreas
ReplyDeleteThank you for your comment Andreas, I don't know why your post got stuck in the spam filter, perhaps it was the link you included.
The reworked business model canvas that you refer to was not fully clear to me, and I would need more information to draw any conclusions from it.
I will look into the NABC model, thanks!
//Anders
The Customer Value Map (we changed the word ;-) indeed looks at the company perspective first. However, nothing prevents a user from designing a Value Proposition with multiple "value providers" in mind.
ReplyDeleteIn fact, that's the reason why we have the Key Partners in the Business Model Canvas: so the co-design of value by multiple organizations is not totally lost.
//Alex
Hi Alex,
ReplyDeleteThanks for clarifying, and sorry for not being up do date with your work. I agree that your new Customer Value Map could capture what I was thinking of, if I look at it in isolation and if I include complementary value propositions to create gains or relieve pains.
I think what I am really after is combining the-create-gains-and-relieve-pains-concept, with a stakeholder-relationship-transaction business model perspective. I will have to create a post about the Pain & Gain Business Model Framework :)
Take care,
//Anders