As I read through the lesson 04 material, one particular term piqued my interest: value proposition. Investopedia defines value proposition as a concise statement of the benefits a company delivers to customers who buy its products or services. According to Gartner, there are three design patterns for value propositions: change the value proposition, expand the value proposition, and improve the value proposition.
In the same article, Gartner provided examples of Porsche and VW, which embarked on expanding and changing their value propositions, respectively. Porsche started a subscription service, a unique idea for a car manufacturer and probably never tried before, and VW started its digital logistics platform called RIO. I can only imagine the technology architecture changes required to address such a change in value proposition.
Similarly to the two companies noted in the Gartner article, I recalled two more prominent examples of such value proposition changes: Amazon and Netflix. Amazon realized that its logistic partners could not match the demands of its customers and moved to establish a logistics department quickly. And Netflix, which mailed its last DVD just a few days ago, went from shipping physical media to one of the largest streaming platforms in a few years.
All these changes and expansions in the value proposition force rapid changes in enterprises’ technical architecture and digital transformation calculus. I find the switch in value proposition extremely interesting. Let me know your thoughts. Has your company experienced such a change in the value proposition, and how did it address those changes?
Hi Ali,
I read and blogged about the same article. I also found the examples they provided like Porsche to be interesting. You asked if my company had experienced a change is value proposition and how we addressed it. I work in healthcare and my organization had to adjust its value proposition during the COVID-19 pandemic. It was not their choice but a disruption that we had to quickly address. Prior to the pandemic, remote medical appointments were uncommon. When COVID hit, my organization had to rapidly implement technology changes to be able to accommodate to patients that were not interested or able to come on site to a care provider. Also, we wanted to keep our locations as safe as possible by hosting less people to reduce the risk of infection spread. My organization had to adjust our value proposition to accommodate to patients by providing remote care. This was a big lift for our IT department!
Hi Bridgette, thank you for the comment. COVID has been a force multiplier for digital transformation. When companies were still contemplating move to the cloud it forced them to speed up their decision to move. And in your company’s case, the value proposition was created out of the blue. The reverberations created by the the pandemic will continue to impact companies and every aspect of our lives.
v/r
Ali