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: Due to the success of its low-cost business model, Ryanair ist the largest European airline today. It provides only the most basic services related to the airline fare and transportation itself. Their new fleet of airlines feature non-reclining seats, no seat-back pockets, safety cards stuck on the back of the seats, and life jackets stowed overhead rather than under the seat. This allows the airline to save on aircraft costs and enables faster cleaning and security checks during the short turnaround times.
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How they do it: Swatch introduced timepieces that transformed how people interpret watches. On average, priced at $50 to $100, these watches are fashion accessoires and are kept as basic as possible.
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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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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: 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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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.
