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Developing business ideas for drone technologies
Developing business ideas for drone technologies

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2 The value proposition canvas

In 2014, Osterwalder et al. introduced the value proposition canvas framework. They looked at the two fundamental building blocks of a business model canvas (value propositions and customer segments) and proposed to split these two blocks into six components. The result is that the value proposition canvas is embedded within the business model canvas and serves to explain the relationship between the value propositions and the customer segments more clearly. Figure 4 shows how it all fits together.

The business model canvas showing the value proposition canvas
Figure 4 The value proposition canvas is part of the value proposition and the customer segments block

In proposing this model, Osterwalder et al. (2014) refined the names of the two blocks. The customer segments block is now called customer (segment) profile, and it details the understanding of the customer. The value propositions block is now called value map, and it shows how the business model creates value for the customer.

The customer segments are groups of people or organisations that comprise the business model’s object of interest: the value proposition is dedicated to creating value for them (Osterwalder et al., 2014, p. XVI).

The value proposition is defined as:

the bundle of products and services that create value for a specific Customer Segment.

(Osterwalder et al., 2010, p. 22)

This week will look more closely at ICAERUS Use Case 5 (rural logistics), and you will develop a value proposition canvas for a possible company using the drone technology of this Use Case. Before approaching this task, it is important to dig into the structure of the value proposition canvas.