Abstract:
Many entrepreneurial ventures fail because of unprofitable business models that may be due to ineffective customer value propositions (CVP). However, little is known about designing CVPs that are effective in creating and capturing value for a successful business model. Moreover, designing CVPs is a challenge in the Internet of Things (IoT) industry that faces tremendous uncertainty in proving customer value. The literature suggests that a formal process to design CVPs may have several positive consequences for venture performance. Thus, in this study, the CVP design activities were explored to gain insights into the process, content, characteristics and business model alignment activities of an effective CVP.
Through this multiple-case study, six semi-structured interviews were conducted with five IoT-orientated ventures, and their perspectives, together with observations and archival records, were analysed inductively to explore the design of effective CVPs. The study found that the design process is dynamic, iterative, and interactive that revolve around value creation processes, supported by CVP enablers, where the emphasised value dimensions evolve towards effectiveness and business model alignment.
This study contributes to the literature by providing a better understanding of the process and content of effective CVPs in IoT-orientated business models. As a result, a broad framework is proposed to enable the design of effective CVPs.
