1. Business Model Canvas (10%) Flashcards
What is a business model? (In addition to describing the organization’s rationale of CDCv)
Is a Blueprint describing how an organization operates
Common differences in similar industries or same product/service?
Revenue models (how they make moolah)
Customers segments (who they sell to)
Value proposition
What are the components of a business model canvas?
7
KKVCCRCC
Ka kp vp cr cs rs cs c kr
Key activities, key partners, value proposition, customer segments, customer relationships, revenue streams, channels, cost structure, key resources
+Customer segments
5
m, n, s, d, m-s
Mass market, niche, segmented, diversified, mutual-sided
what does a business model canvas describe?
The rationale of how an organization -creates -captures -delivers value.
How a company intends to make money/ the logic by which it sustains itself financially
How your idea actually becomes a business
Can you have multiple customer segments?
You can serve different customer segments if they require different strategies
When do customer groups representing different segments?
- Their needs require and justify a: distinct offer
- they are reached though: different distribution channels
- they require: different types of relationships
- they have substantially: different profitabilities
- they are wiling to paying for different aspects of the offer
+Value Propositions
10
N, Cr, P, C, D, B/s, C/u, A, P, Rr
Newness, Cost reduction, performance, customization, Design, Brand/status, convenience/usability, Accessibility, price, risk reduction
+Channels are customer touch points
List.
(also consider, how to customer segments want to be reached and through which interaction points?)
5
A, E, P, D, As
Awareness, evaluation, purchase, delivery, after sales
How does a partner channel affect operations
- Lead to lower margins
- allow an organization to expand its reach
- and benefit from partner strengths
How do owned channels affect operations?
- Have higher margins than partner channels
- but costly to put in place and to operate
- gotta find the right mix! (Balance great customer experience & maximize revenue)
What’s in a channel? Etsy
Etsy is a partner channel:
Cannot control videos and ads on your product page
If it’s your own channel you can control what is shown
-since etsy is a popular website you can benefit from higher website traffic (sell more quantities and less marketing cost) despite the lower margins
+customer relationships
(consider: what relationships are you establishing with each customer segment? inquisitive? retentive? personal? automated?)
6
PDSACC
Personal assistance, dedicated personal assistance (most intimate), Self service, Automated services, communities, co-creation
+example of communities in customer relationships
HOGs are Harley Davidson owners
+example of co-creation in customer relationships
YouTube, online reviews
+Customer relationships: automated vs. self service
- Grocery stores are self service,
- Amazon is automated, making suggestions based on previous purchases.
-Automated is more personalized and identifies individual customer preferences
+Revenue streams
if customers comprise the heart of business model, then rev streams are its arteries. you are bleeding customers dry to get most out of them
consider: what are customer really willing to pay for? how? are you generating transactional (one-time revenue) or recurring revenues (on-going payments)?
7
AABUSLL
Asset sale, advertising, brokerage fees, usage fee, subscription fees, lending/renting/leasing, licensing
\+example of : usage fee in revenue streams licensing brokerage fees advertising
- hotels
- movies
- Real estate agents, credit card companies per transaction, HR recruiters
- media, you do an ad
+2 types of pricing mechanisms
Fixed Pricing:
prices determined in advance of any sales based on 0+ statics variables
Dynamic (variable) pricing:
prices can change based on market conditions
+Key Resources
Allow enterprise to create a value proposition, reach markets, maintain relationships with customer, and earn revenues
(Consider, owned vs. leased)
4
PIHF
Physical, intellectual, human, financial
+Key Acitivites
provide examples of each
*they are the most important thing a company must do to make its business model work
3
MSS
Making, selling, supporting
- Manufacturing &providing services, supply chain like Dell and soft dev like Microsoft
- promotion and education
- finding talent (HR), platform/network management, customer service
Microsoft does their own developing, Dell’s supply chain allows for customization
+Example of key activity-platform relationship
Kijiji.ca’s key activity is maintaining and upgrading the platform/website
platforms can be: networks, match-making platforms, software, and even brands can function as platforms
+Key Partners
3
ORA
Optimization and Economy of Scale
Reduction of Risk and Uncertainty
Acquisition of resources and activities
+4 types of partnerships
- Strategic partnerships: non competitors
- strategic partnerships: competitors, (co-opetition)
- Joint ventures to develop new business
- Buyer-supplier relationship to assure reliable suppliers
