This Thesis focuses on business model innovation in consumer-to-consumer (C2C) online marketplace business. The C2C industry has constantly grown since the early days of the commercial Internet of the 1990’s into a global megatrend, evaluated worth hundreds of billions of Euros. Despite the world wide rise of the C2C industry, there is still relatively little literature available about the business models behind the successful C2C online marketplaces, making it an interesting research topic.

The objective of this Thesis is defining an action plan for a local C2C online marketplace to tackle an international competitor that aggressively extends its market share and is therefore threatening the case company. The study is conducted as action research, combining the best practice in customer segmentation, building competitive customer value proposition and business modeling with the analysis of the case company and the competitor.

The output of this Thesis is a practical action plan for the case company. The action plan defines the key targets, key actions, key performance indicators and a schedule for the case company to regain the market leader position in the online marketplace business. Instead of general recommendations, the action plan suggests practical ways for taking advantage of the unique characteristics of the case company and emphasizes market creation as an alternative approach for head-to-head competition against the competitor.

The case company can benefit from the results of the study by building better understanding in customer segmentation and selecting the primary customer group, creating a competitive and unchallenged customer value proposition and by utilizing its unique characteristics to best align its business model with the surrounding market.