The Value Proposition Explorer

I have developed a tool I call the Value Proposition Explorer to clarify the space around an originally stated value proposition by broadening or narrowing the scope. The basic idea underlying the tool is to identify assets and capabilities that are really valuable and identify how value could be created by combining own and external assets and capabilities into new value propositions. The outcome of repeating this several times is a hierarchical list of value propositions, from which the company is able to select and assess business opportunities.

The tool should not be mixed with the idea of positioning a company in the right place of a value chain (One-sided business models) but a tool to break free from the value chain thinking. A value proposition can be directed not only to the company's existing customers, but other stakeholders, traditionally not considered to be customers (see Two-sided, Horizontal and Multi-layer business models). A value proposition does not have to be based on developed products and services (even though that is almost always the definition) but what one actor has to offer another actor:


An example
P&G is constantly looking for ways to leverage its assets through its external business development and connect & develop initiatives. Based on the original value proposition of Pampers diapers you now find lots of co-branded or co-commercialized products such as bibsters, wipes, swim pants, underwear and concepts going upwards in the Value Proposition Hierarchy Explorer. At the same time P&G is offering to license technologies and IPR relating to developed odor controlling bio-component film to be used in human contact products, cleaning devices, medical supplies such as bandages and hospital bedding, and even to use the technology in airline cabine space to control odors and smoke.

Finding own, others' or joint value propositions
When searching for valuable assets and capabilities, it is important to not only focus on own business model and industry, but also the potential need of others:
• How can we strengthen own value propositions?
• How can we strengthen others' value propositions?
• How can we create joint value propositions with others?

Further reading:
What is a value proposition

Multi-Layer Business Models

This is the last post in a series of four on my view on business models, more specifically the different directions for product and service refinement and monetary flow. The other posts have be on One-Sided Business Models, Two-Sided Business Models and Horizontal Business Models.

When the refinement of products and services, or the monetary flow comes from different industries I refer to it as Multi-Layer Business Models.


Cross-industry technology, IPR and brand licensing is common Multi-Layer Business Models in which a company in- or out-license assets to a company in another industry in return for upfront payments, royalties, shares in a joint-venture etc.

An interesting example is how companies are pushed into cross-industry collaboration and the use of Multi-Layer Business Models through technology development. The convergence in mobile devices where cameras, calendars, music and movie players, payment services, transport tickets etc. are all being integrated into single hand-held devices, where no company can do everything themselves, will open up for new interesting Multi-Layer Business Models.

Mobile phone operator example
In the Two-Sided Business Models example, mobile phone operators charged advertisers, brand-owners, developers of applications, content or games, instead of only charging end-users as in One-Sided Business Models. In the Horizontal Business Models example, competitors were charged for developed or in-licensed applications and services. With a Multi-Layer Business Model, different industries that would benefit from for example user-data could be approached. Value propositions towards other industries could be to provide restaurants and store owners with information on where different user-groups hang out, provide companies, governments and tourist information companies with information such as when users arrive at new destinations. Also, as described above, the convergence in mobile services open up for new cross-industry services such as movie rentals, photo printing, tickets to concerts or transportation, banking services etc.

Further reading:
One-sided business models
Two-sided business models
Horizontal business models