KIT-VPD: A COLLABORATIVE UNIVERSITY-INDUSTRY EXPERIENCE FOR IMPLEMENTING VALUE PROPOSITION DESIGN TECHNIQUES IN SMES

Today many small companies are confronted with harsh market conditions. The current economic crisis has weakened the financial health of many small and medium-sized firms (SMEs), especially in industries in which foreign, low-cost producers have entered the market and are threatening the survival of the existing competitors. Thus, European SMEs are becoming more aware that business as usual is no longer sufficient and that their future depends on their ability to offer innovative products and services, innovate and improve their value propositions and associated business models, or their capability to innovate their business processes. Changing market conditions thus force smaller firms to adapt or reinvent their business through new technologies or unique value propositions.

At the same time, small firms face several constraints in differentiating their products and changing their business model. A major liability is that small firms lack the required resources, knowledge and technical capabilities. They therefore must collaborate with external partners to innovate successfully, to develop new sources of income, and to reach more profitable positions in the competitive landscape, and university-industry collaboration is one efficient approach towards that aim. SMEs often do not know how to confront their innovation approach and the role of emerging approaches and tools in terms of value proposition. Therefore, both enterprises and individuals need to increase their innovation management capabilities and skills to improve their competitiveness through Value Proposition Design (VPD), as a logical step for many SMEs to take.

A good value proposition is one of the most important elements for the competitiveness of SMEs in actual marketplace, as they reflect and capture the value that a company, product or service offering provides to a customer. The stronger the value proposition, the more value customers perceive that they get and, therefore, the more willing they are to buy. Thus, VPD addresses the relationship between customer segments and value propositions thorough a process of developing and confronting, with the market, the different options of a company when defining their value proposals, and therefore adds new and necessary resources for strategy and business development to existing businesses.

In this context, the aim of this paper is to show Mondragon University´s approach to the implementation of a collaborative university-industry experience focused on the implementation of VPD in SMEs. The present paper shows the development and results achieved through the project KIT-PVD. Concretely, this paper explains the processes, tools and outcomes of this value proposition design experience in several small SMEs, as long as the lessons learned and proposals for SMEs and Universities approaching this challenge.