Feasibility of Value Propositions Based on Importance Performance Analysis and Risk Using Simulation: Evidence From SMEs

This study examines the feasibility of value propositions in Small and Medium Enterprises (SMEs) using Importance Performance Analysis (IPA) and risks, applying system dynamics simulation. The IPA plots the indicators in four quadrants to determine which areas should be prioritized for improvement. The issues in this study are the areas with high importance but with low performance such as return guarantees, product design and promotions. System Dynamics simulations are used to evaluate these factors and point to opportunities for action: add personnel to provide return guarantees, increase product design frequency and reallocate promotional budgets. The best improvement efforts are identified by evaluating the feasibility and risks of each alternative to improve the value proposition. This holistic approach provides a strategic framework for SMEs to enhance customer satisfaction, reduce operational costs, and attain sustainable growth.