Customer Value Proposition Analysis

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1. The Customer Value Proposition (CVP), is an offering by companies that helps customers more effectively, reliably, conveniently, or affordably solve an important problem (or satisfy a job-to-be-done) at a given price. The primary reason is that why should a prospect by from a company or individual. Value proposition should contain a clear statement that includes: • explains how your product solves customers’ problems or improves their situation (relevancy), • delivers specific benefits (quantified value), • The seller should tell the ideal customer why they should buy from them and not from their competition (unique differentiation). Companies have to present their value proposition as the first thing the visitors or customers see on their…show more content…
The relationships established with customers Companies should clarify the type of relationship they wants to establish with each of their Customer Segment. Relationships can range from personalized to automate. Customer relationships may be driven by the following motivations such as customer acquisition, customer retention and Customers as marketers. 5. The key resources needed to make the business model possible: Every business model needs Key Resources. These resources allow companies to create and offer their Value Proposition, reach markets, maintain relationships with customer segments, and earn revenues. Their different Key Resources are needed depending on the type of their business model. A microchip manufacturer needs capital intensive production facilities, whereas a microchip designer focuses more on human resources. Key Resources can be physical, financial, intellectual, or human. Key Resources can be owned or leased by the company or acquired from key stakeholders. 6. The key activities necessary to implement the business…show more content…
From research 90% of new businesses fail in the first 3 years of operations, because most them fail to understand their costs or what it will take to create the products and services they have promised in their value propositions. At least three other building blocks are contributors to the cost structure block. Companies must evaluate cost of creating and delivering their value proposition, creating revenue streams and focus. All three of these blocks represent a financial investment into the business. However, when an entrepreneur has effectively figured out their key resources, key activities and key partnerships the aforementioned costs become easier to calculate. If they have a major cost stream which cannot be matched to a Key Activity, they needs to be given a closer examination. Either their Key Activities block is missing a vital activity or their costs are being inflated by an activity which is unimportant and yet has still been included in their business model. It is important to note that cost can be a fundamental concern for some business model. One example is ‘no frills’ airlines like Southwest which are completely focused on reducing

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