Learn how to design and implement a compelling value proposition using value chain analysis, a tool that helps you create and deliver value to your customers.

Start by conducting a comprehensive analysis of your value chain, including both primary and support activities, then map out the sequence of activities involved in producing and delivering your products or services, from raw materials or inputs to the final customer delivery, identify the key processes, resources, and capabilities that contribute to value creation. Evaluate your organization's unique strengths, capabilities, and resources that differentiate you from competitors, if these could include proprietary technology, specialized expertise, strong brand reputation, unique product features, or superior customer service, and identify areas where you excel and where you have a competitive advantage!

How do you design and implement a value proposition that differentiates you from your competitors?

A value proposition is a statement that summarizes the benefits and value that you offer to your customers, and how you stand out from your competitors. It is a key element of your customer relationship management and value creation strategy, as it helps you attract, retain, and satisfy your target market. But how do you design and implement a value proposition that is compelling, clear, and consistent? Here are some steps you can follow to craft and communicate your unique value proposition using value chain analysis.

1 Understand your value chain

Your value chain is the set of activities and processes that you perform to deliver your products or services to your customers. It includes both primary activities, such as production, marketing, and sales, and support activities, such as research, procurement, and human resources. By analyzing your value chain, you can identify the sources of value and competitive advantage that you have, as well as the gaps and weaknesses that you need to address. You can use tools such as Porter's value chain model or the value chain canvas to map out your value chain and assess its performance.

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Juliano Anjos

Especialista em Qualidade, Lean, Projetos, Processos e Pessoas |🏆LinkedIn Top Voice | LSSBB™ | Excelência Operacional/Automotiva | Auditor ISO/IATF/BIQS
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Start by conducting a comprehensive analysis of your value chain, including both primary and support activities, then map out the sequence of activities involved in producing and delivering your products or services, from raw materials or inputs to the final customer delivery, identify the key processes, resources, and capabilities that contribute to value creation. Evaluate your organization's unique strengths, capabilities, and resources that differentiate you from competitors, if these could include proprietary technology, specialized expertise, strong brand reputation, unique product features, or superior customer service, and identify areas where you excel and where you have a competitive advantage!

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Anuj Jain

A lifelong student of how social change happens
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For too long, value chain work has borrowed from supply chain work, which is often dominantly focussed on greater value creation for consumers and for shareholders. Only on last 2 decades, alternative frames have emerged more strongly and in practice, to create value for producers and for the environment. And started looking at power asymmetry and ways to create better balance, consciously. This is very much work in progress, as a lot more needs yo be done, factoring in political economy of the value chains. Creating cheaper, fancier burgers and easier availability may improve value chain for fast food but may be really bad for health, food producers, and environment affected by excess use of chemical, unsustainable farming practices.

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2 Define your customer segments

Your customer segments are the groups of people or organizations that share similar needs, preferences, and behaviors, and that are willing and able to pay for your products or services. You need to understand who your customers are, what problems they have, what benefits they seek, and how they perceive and evaluate your offerings. You can use tools such as customer personas, empathy maps, or the jobs-to-be-done framework to segment your customers and gain insights into their motivations, expectations, and pain points.

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Anuj Jain

A lifelong student of how social change happens
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Again, these descriptions are unfortunately just focussed on consumers and not other major actors and stakeholders in the value chain, including employees / workers. Such descriptions have done more harm than good for future of value chains and societies as a whole

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3 Align your value proposition with your customer segments

Your value proposition should match the needs and wants of your customer segments, and highlight how you solve their problems and deliver value better than your competitors. You should also consider how you can differentiate yourself from your rivals by offering something unique, innovative, or superior in terms of quality, features, price, convenience, or service. You can use tools such as the value proposition canvas, the lean canvas, or the business model canvas to articulate and test your value proposition with your customer segments.

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Anuj Jain

A lifelong student of how social change happens
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This approach of consumer segmentation needs to be pre-filtered through a ‘value’ lens, what kind of value enterprise wishes to create - better prices, easier accessibility, greater consumer use and satisfaction and/ or healthier consumer, environmentally conscious production and supply sourcing, fair wages based production that attracts and grows specific segments of the consumers. Greater and more deliberate focus on ‘key internal values’ ideally should precede such a segment analysis.

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4 Communicate your value proposition effectively

Your value proposition should be communicated clearly and consistently across all your touchpoints with your customers, such as your website, social media, brochures, advertisements, or sales pitches. You should use simple and engaging language, visuals, and stories to convey your value proposition, and avoid jargon, technical terms, or vague claims. You should also measure and monitor how your value proposition resonates with your customers, and collect feedback and data to refine and improve it over time.

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5 Review and update your value proposition regularly

Your value proposition is not a static or one-time statement, but a dynamic and ongoing process that requires constant evaluation and adaptation. You should review and update your value proposition regularly to ensure that it reflects the changing needs and expectations of your customers, as well as the evolving market conditions and competitive landscape. You should also leverage your value chain analysis to identify new opportunities and threats, and to optimize and innovate your value creation and delivery processes.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you design and implement a value proposition that differentiates you from your competitors?

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1 Understand your value chain

2 Define your customer segments

3 Align your value proposition with your customer segments

4 Communicate your value proposition effectively

5 Review and update your value proposition regularly

6 Here’s what else to consider

Value Chain Analysis

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