Value proposition

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Value proposition

Introduction

Businesses operate in a highly competitive environment utilizing every opportunity to gain a competitive advantage. Multinational corporations particularly saturate the local markets with a strong foundation in marketing, finance, and managerial capabilities. This leaves small and medium enterprises exposed to possibilities of closure, mainly when they do not understand their value and role in a highly competitive market situation. For businesses to under their overall strategic direction, they must raise critical discussions surrounding their value proposition. Osterwalder et al. (2015) elaborated that value proposition has three key attributes. First, enterprises must understand the problem they intend to solve in an operating environment for a particular audience. Secondly, they must clarify how the commodity brings value by clearly illustrating how it solves the identified problems. Third, businesses must demonstrate through communication the benefits of buying their commodities over substitutes offered by competitors in the same market. This report discusses my understanding and impression of the value proposition studied in class.

Understanding of the value proposition

The value proposition is a way of winning customers by convincing them that what a company offers is unique and capable of solving the problem that customers face. The position taken by the organization makes it for the customer to believe in them. Still, these choices must be critically examined because being unique does not mean the customer will automatically select one’s products. Unique, in this case, must be accompanied by the undeniable quality that every target customer can see, feel, or experience. In this case, organizational stakeholders must be ready and willing to operate in unison toward driving the customer to see the company's value. This means the organization must have unified goals set through practical compromises and with support from organizational-wide stakeholders. Additionally, where value is limited, convincing prospective buyers that the product can solve their needs becomes complicated.

McKeown and Durkin's (2018) desires and aspects of the value proposition are motivated by external aspects such as the problem that the customers, the desires of the customer, and the core mandate of the business in the larger business operation community. A drive that comes from outside an organization, but the stakeholders are expected to understand it and find best-fit mechanisms for solving the problems posed by different target populations. When the value is clear to customers, and the business can communicate that value without missing the point, drawing customers to the business becomes more accessible. This understanding clarifies why some enterprises are doing so well while others are still struggling to remain afloat in the highly competitive business environment.

While different customers will look at value proposition from varying perspectives, the concession raised by McKeown and Durkin (2018) and Donaldson (2010) is that the bottom line of the value proposition for a company is to put its products out there by convincing customers it is the right choice. However, the future sustainability of...