To develop the first iteration of your business model, we're going to focus on the four fundamental business areas: your offering, your customers, as well as infrastructure and finances. It's probably not surprising that we'll begin by discussing your offering and your customers and how the two of them interact. We begin with a value proposition, which is another name for your big idea. The value proposition is the bundle of products and services that create value for the specific customer segments we'll discuss next. It's the total product you'll offer your costumer in order to solve their underlying problem, and includes augmentation such as service, design, brand cache and price. With the listening and planning phases of the entrepreneurship life cycle complete, you should have no trouble with this element of the business campus, since your strategy should be fundamentally linked to your product offering. How this differs from this your, your strategic planning is that you should now introduce the heightened level of clarity. In particular, you should detail your product offering so that you can gain insight into what strategic initiatives you'll need to implement to offer the product and what elements you're strategically leaving out. You want to include enough detail so that you can communicate a concise, clear vision of your product offering without any ambiguity. What you'll find as you go through this process is that your value proposition might require more resources than you'd considered. You'll also uncover assumptions about the value proposition that might not be warranted. For instance, you might have a focus strategy on customers who value high levels of service. But the exact definition of high level of service might mean different things to different people. This is the phase of the entrepreneurship life cycle that will bring this to light. As an example, let's look at the business model for Southwest Airlines. Its value proposition includes low cost airfare with minimal frills and a focus on customer service. Diving deeper into what this value proposition actually means, we recognize this will require frequent, reliable departures and a friendly, well-trained staff. When we stop and consider customer expectations, we also realize Southwest needs to offer a frequent flier program. However, because its core customer segment is no frills and concerned primarily with travel, this program doesn't need to be extensive. It can instead offer only free flights. When we further consider Southwest's value proposition, we see it also entails no seat assignments, no meals, no connections with other airlines and no first class cabins. Remember, identifying your strategic activities is as much about what you're not going to offer as it is about what you are going to offer.
