Value proposition as a catalyst for a customer focused innovation

Purpose This paper seeks to advance the theory on value proposition and innovation by offering a framework for identifying value proposition elements. Design/methodology/approach A single embedded case study is conducted based on Amazon.com's innovations. Findings By identifying and systematically analysing innovations by Amazon.com, the concept of value proposition was decomposed into five components: performance, ease of use, reliability, flexibility and affectivity (PERFA). Research limitations/implications The research did not focus on the relationships between the value proposition elements and their relevance in different contexts such as product, industry or customer life cycle. Practical implications Managers should support their decision to innovate the value proposition based on customers' perceived value. The findings provide guidance to managers on how to uncover innovative value propositions and potentially create new demand in an uncontested market space. Originality/value The paper is an original attempt to correlate value proposition and innovation. It provides researchers and practitioners with a better understanding of the structure of a value proposition and how innovation can influence it.