Value Proposition and Profit Formula
Value Proposition in the business model is the special offer your business makes to customers. It could be a good or service that fixes the client’s issue. A company’s strategy to achieve profitability and viability is referred to as a profit model. It outlines what the organization expects to produce or offer, how revenues will be made, and all the costs the firm will expend to make the model work. Without a specific profit model, the company will be functioning irrationally and have a significantly lower chance of success.
Key Resources and Key Processes
Key Resources serve as the foundational element describing the most crucial resources required to sustain a company strategy. Every business model needs them, and businesses can only produce Value Propositions as well as Revenues through them. Important resources may be material, monetary, intellectual, or personal (Pereira, 2020). Operational and managerial procedures enable successful businesses to provide value in a way that can be successfully repeated and scaled up. These could include recurring activities like production, planning, budgeting, sales, and servicing. The standards, KPIs, and policies of a corporation are also key procedures.
How Netflix Follows the Value Innovation Framework to Stimulate New Growth
The Netflix organization practices value proposition as Netflix is available whenever you want, 365 days a year. Whenever someone has free time or wants to watch a movie, Netflix is available. One of the biggest benefits of using Netflix is that it is always available. At 4:45 in the morning, can you not sleep and feel like watching an old Buffy the Vampire Slayer episode? Netflix can handle it. This is a reason why Netflix has close to 100 million subscribers worldwide. Netflix’s primary resources, including an addition to its own platform, website, and app, are primarily human and digital resources. The studios that Netflix is building to promote its own productions are one of them, as are software engineers, the content collection, the recommendation algorithm, directors and producers, the trademark, and the studios themselves.
The main revenue stream for Netflix is through monthly fees because of its subscription-based business model. Over 180 million of its subscribers pay for it globally. Many analysts have proposed that Netflix might increase its revenue by running adverts, but the streaming service has resisted, arguing that doing so would degrade the consumer experience, which is ultimately its key selling point (Pereira, 2020). This innovation process timeline demonstrates how incremental innovation led to improvements in the Netflix service offering and radical innovation led to a complete transformation of the service.
Reference
Pereira, D. (2020). Netflix business model. Business Model Analyst. Web.