Value creation focuses on what is necessary to deliver the core value proposition of a product or service, typically as basic as possible. Cost savings are shared with the customer, usually resulting in a customer base with lower purchasing power or purchasing willingness.
How they do it: IKEA offers different product lines for each category, including a basic one, letting customers with a low purchasing power buy furniture in their stores. Products in the self-service area are presented in a simple way comparable to a warehouse.
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How they do it: Automakers such as Ford started manufacturing no frills models to also target customer groups with low purchasing power. No frills automobiles often have only minimum convenience equipment, a less powerful engine and are fully trimmed on cost savings. Other areas of saving are for example less sound-proof material, plastic dashboards instead of rubber and less options to adjust the seat.
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How they do it: H&M’s store design is simple and standardized across all stores. Clothes are placed on simple racks and shelves. Staff is present, however not meant to assist the customers in their purchasing experience but rather to refill racks and shelves.
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How they do it: Craigslist functions as a simple classified platform organized by categories. The nature of postings is simple and straightforward making listing and finding easy.
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How they do it: In recent years Nokia introduced multiple ”no frills” phones opposing the general smartphones. These phones allow their users to text and call but don’t provide access to the internet. In addition they have a great battery live.
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Below, the top industries for the pattern "No Frills" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Below, the pattern "No Frills" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
