Business Model Canvas - the Value Proposition

Karim Jabber, External Lecturer, Copenhagen Business School

The value proposition, simply put, is what the product or service does for the customers making use of it. The value proposition, in other words, seeks to solve customer problems and satisfy customer needs. The value proposition is more than the specifications of a given product or service. It is the value that this product or service adds to the customer.

For example, cup that can hold 20 centilitres, made of recycled material and sold in boxes is not its value. But value for the end user is affordability, disposability, time saving and a good conscience that one is using recycled material.

The value proposition is always very closely linked to the customer segments making use of the product or service. There always needs to be a strong fit between the value proposition and the customer segments. This is what is referred to as the product-market fit. If this fit is weak or missing, the company will never be able to thrive. In a nutshell, you can say that the most brilliant products or services have no value unless the customers perceive this value.

This blog post is based on my learnings from the course on ‘social entrepreneurship’ offered by Copenhagen Business School through Coursera (2014).