AFM 132 Chp 7 - Business Models

Question 1

what’s the role of a business model

Answer 1

helps suggest how a company plans to make money

Question 2

What are some questions to consider when creating a business model - consider what those questions factor in

Answer 2

what are you providing? - factors in the effort + resource involved to design a product or service offering

who are you providing the product/service to? - factors the consumers that would be interested in what the company has to offer

how do you survive + thrive as a company? - factors how for a business to stay in the business, they must be profitable in order to maintain + grow the business

Question 3

Define a business model

Answer 3

model that captures how a company creates, deliver + capture’s value

Question 4

how do a company create or deliver value?

Answer 4

by providing a product or service that meets the needs of their customers

Question 5

how does a company capture value?

Answer 5

by being profitable

Question 6

what’s the business model freemium?

Answer 6

combining free + premium - apps that can be downloaded + played for free but has a premium version where consumers can get additional perks

Question 7

What are the 9 factors in a business model canvas?

Answer 7

1. customer segments
2. channels
3. customer relationship
4. value propositions
5. key activities
6. key resources
7. key partners
8. cost structure
9. revenue streams

Question 8

Which factors on a BMC create value?

Answer 8

customer segments
channels
customer relationship
value propositions

Question 9

which factors on a BMC deliver value?

Answer 9

value propositions
key activities
key resources
key partners

Question 10

which factors on a BMC capture value?

Answer 10

cost structure
revenue streams

Question 11

define a Business Model canvas (BMC)

Answer 11

a tool which helps new or existing businesses design + map out their business models

Question 12

What are the different segments a company may look into in customer segments

Answer 12

business segment
geographic segments
consumers segment
- demographic factors

Question 13

define a value proposition

Answer 13

describes the features + benefits offered through a company’s products/services that customers will value

Question 14

What question does the value proposition answer?

Answer 14

why would a customer purchase this product offering?

Question 15

What are some values consumers value?

Answer 15

1. product + packaging
2. quality of service
3. convenience
4. Brand Name
5. Design
6. Price

Question 16

What are the 4 different channels

Answer 16

1. marketing channels
2. sales channels
3. Distribution channels
4. service channels

Question 17

what’s the purpose of a marketing channel

Answer 17

to create awareness about product/services

Question 18

what’s the purpose of sales channels

Answer 18

how customers purchase hteir products/services

Question 19

what’s the purpose of distirbution channels

Answer 19

how to deliver products/services to customers

Question 20

What’s the purpose of service channels

Answer 20

how to provide support to customers after a sale

Question 21

define a direct channel

Answer 21

when a company has its own stores + salespeople

Question 22

define an indirect channel

Answer 22

when a company’s products/services are provided through an intermediary

Question 23

what’s a benefit of distributing products through a retailer?

Answer 23

reach a larger base of customers

Question 24

What’s the value in building long-term relationships with customers?

Answer 24

increased customer loyalty

Question 25

What are some of the ways a company may interact with a customer to help develop relationships

Answer 25

1. customer support 2. timeliness of support 3. convenience

Question 26

What are the tangible + intangible assets a company has

Answer 26

human resources physical resources financial resources intellectual property

Question 27

what's the role of patents

Answer 27

protect new inventions or improvement to existing invention + gives the inventor the right to stop others from making, using, or selling their invention for the period of the patent

Question 28

what's the purpose of copyright

Answer 28

provides an exclusive right to make, reproduce, publish or perform artistic/literary works where others that want to use the work have to buy it or get permission to use it

Question 29

how long does copyright exist in canada for?

Answer 29

for the lifetime of the creator plus 50 years following their death, after which the work becomes part of the public domain where anyone can use it

Question 30

what are key activities

Answer 30

what a company does to operate successfully + deliver value

Question 31

What's an important consideration for companies to operate effectively in regards to key activities

Answer 31

prioritize what key activities they should tackle + dedicate resources to and what could be outsources

Question 32

why might a company outsource an activity?

Answer 32

if the activity does not directly help them deliver value

Question 33

provide some examples of key partners for a business

Answer 33

supply chain sales international expansion

Question 34

What's the importance of a supply chain in delivering value (key partners context)

Answer 34

working collaboratively with another company in their supply chain to deliver high quality value.

Question 35

What's the importance of a sales in delivering value (key partners context)

Answer 35

to work with other companies to sell their products such as retailers

Question 36

What's the importance of international expansion in delivering value (key partners context)

Answer 36

A COMPANY MAY WANT TO TEAM UP WITH ANOTHER COPMANY through A JOINT VENTURE OR A STRATEGIC ALLIANCE

Question 37

What's the purpose of revenue streams

Answer 37

examine the cash inflows received from selling a product or service

Question 38

What are the different types of revenue stream

Answer 38

transactional - 1 time payments recurring - ongoing payments

Question 39

What should we consider when understanding the cost structure for a company and why?

Answer 39

cost types - looks at costs from a financial reporting perspective cost behaviour - looks at the types of costs that may change if production levels increase

Question 40

define fixed costs

Answer 40

costs that stay the same even if production increases

Question 41

define variable costs

Answer 41

costs that will change if production increases

Question 42

What major business function is in creating value

Answer 42

marketing

Question 43

what major business function is in delivering value

Answer 43

operations human resources finance

Question 44

what major business function is in capturing value

Answer 44

accounting