What’s A Business Value Proposition?

by Patrick Liew on March 27, 2017

Business Value Proposition (BVP) is the delivery of an aggregation or bundle of unique quantity and quality of benefits to meet and be perceived to meet the key needs, requirements and expectations of the targeted customer.

The nett value proposition is the sum total of all the benefits of your offering to meet the needs, requirements and expectations of the customer less the targeted customer’s cost of acquiring the offering.

There must be adequate nett value proposition to motivate the targeted customer to purchase your product or to switch from another supplier to you.

What are the three key components of a business value proposition?

1. Value-improvement.

Value-improvement refers to the increase in output less input divided by units of labour.

This is a typical definition and it has to do with improving efficiency and productivity of the performance of the workforce and the operation.

2. Value creation.

Value creation is about enhancing quality and quantity of output so as to achieve the best possible results.

It is not just about achieving incremental but also about achieving quantum leaps of improvement.

Value can be created by innovating and customizing solutions, deliverables and other offerings to meet the unique needs, requirements and expectations of the targeted customer.

It can also result from co-creation of solutions with the customer.

3. Value-addition.

Value improvement is about taking action in the best possible way.

Value creation is about producing the best possible results.

Value-addition is not just about achieving the best possible results in the best possible way. It’s also about taking the right action rightly.

In this regard, value improvement, creation, and addition should be part and parcel of the jobs of innovators and entrepreneurs as well as employees.

They are also about contributing to the four bottom lines: the financial (profit), social (people), environmental (planet) and spiritual (purpose) bottom lines.

If only innovators and entrepreneurs focus on value creation and employees focus on value improvement and addition, it will not bode well for the enterprise.


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