Designing a legitimate value proposition for a new Finnish forest fund

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Perustieteiden korkeakoulu | Master's thesis
Degree programme
Master’s Programme in Industrial Engineering and Management
93 + 2
Legitimacy – being deemed desirable, proper, and appropriate – plays a central role for whether a venture will succeed or perish and therefore it is a central theme for strategic planning. For new ventures legitimacy hurdles are most numerous, but popular methodology for designing value propositions for startups does not address the concept of legitimacy. In this thesis I ask, how can legitimacy be considered when designing a new value proposition for an investment fund product. Empirical setting is forest funds in Finland, and it was chosen, because fund investing is growing more popular, forest funds are a new phenomenon in Finland and their legitimacy routinely gets scrutinized in the public space. To study the subject, this thesis is three-fold. First, I studied the incumbents in the category to understand, how they make claims about their legitimacy, and how these claims are distributed in pragmatic, normative, value-based, and cognitive legitimacy categories. From findings, a stereotype of a typical forest fund was formed. Second, a value proposition for a new product of the same category was designed, using lean startup approach and findings of the previous step. Finally, an audience was interviewed on the value proposition to validate whether the customers judged it legitimate or not. The audience judged the product cognitively legitimate, but the forest funds cate-gory was seen legitimate by only about 40% of the subjects. Socio-politically, the value proposition was judged legitimate as expected, biggest concern being that it does not differentiate enough from the incumbents to justify its existence, and it needs further refining to differentiate more. The study showed that legitimacy can be considered already in the design phase, but this does not eliminate the need for iterations. Perhaps, legitimacy could complement the existing lean startup method and a complete new “legitimacy design canvas”-tool could be created to help operationalize the idea. Designing for legitimacy has potential to decrease the number of iterations needed to build a viable offering and therefore it could also mean a faster time to market.
Maula, Markku
Thesis advisor
Kemppainen, Tommi
value proposition design, new venture legitimacy, forest assets investing, forest funds, investment products
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