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BU121 Midterm > Business Models > Flashcards

Business Models Flashcards

1
Q

what is a business model

A

A business model describes the rationale of how an organization creates, delivers, and captures value

Help achieve and maintain business viability

9 building blocks

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2
Q

buisness model stories

A
  • precisely delineated characters
  • plausible motivations
  • plot that twists
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3
Q

9 building blocks

A
  • customer segments
  • customer relationships
  • channels
  • revenue streams
  • value proposition
  • key activities
  • key resources
  • key partners
  • cost structure
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4
Q

9 building blocks cover three main areas of the business

A
  • desirability
  • feasability
  • viability
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5
Q

desirability

- value

A

create value

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6
Q

desirability building blocks

A
  • value proposition
  • customer segment
  • customer relationships
  • channels
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7
Q

what is desirabilty

A

Creating customer demand – make the product attractive enough so they want it, creating value or customers – are they finding value in your products

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8
Q

viability

- value

A

capture value

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9
Q

viability building blocks

A
  • revenue streams

- cost structure

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10
Q

what is viability

A

Funds you need to carry our actions, need to sustain the business, revenues need to cover costs

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11
Q

feasability

- value

A

deliver value

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12
Q

feasibility building blocks

A
  • key resources
  • key activities
  • key partnerships
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13
Q

what is feasabilty

A

What the business needs in order to be successful

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14
Q

value proposition

A

Value proposition – what are you doing

Ex – a one stop shop to provide everyday low pricing for the mass market

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15
Q

customer segment

A

Customer segment – who are you creating value for

Ex – families with children, students, budget conscience consumers

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16
Q

channels

A

how a company communicates with and reaches its customers (physical stores, website)

Ex – physical in store, website, mobile app

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17
Q

customer relationships

A

the type of relationships a company establishes with customers – can be personal vs impersonal (automated)

Ex – customer service, rewards programs, greeters, employees (cahsiers)

18
Q

revenue streams

A

how the business makes money/ generate from each customer segment (sales, tips)

Ex – consumer packaged goods, grocery items, clothes

19
Q

cost structure

A

describes all costs/expenses incurred to operate a business

Ex – rent, salaries, inventory, advertising/ promotion

20
Q

key activites

A

important things the company must do to make the business work (where they make/promote products)

Ex – Inventory control, customer service, distribution coordination, marketing/sales

21
Q

key resources

A

important assets required to make a business model work, allow an enterprise to create and offer value to its customers

Ex – Employees, brick and mortar stroes, brand reputation, distribution system (logistics)

22
Q

key partners

A

the network of suppliers and partners that make the business model work

Ex – third party vendors, manufacturing/ supply chain partners

23
Q

integrative thinking between building blocks

A

They are all meant to fit together

Sell tickets and make profits on refreshments

Key resource = theatres
Placement of the refreshment stands, can buy your tickets there

Key activity = staff training
Teach staff to up sell

24
Q

business model patterns

A
  • bait and hook
  • freemium
  • servizing
  • multi-sided platform
25
Q

bait and hook

A
  • Lock in customers with a base product (bait) in order to generate recurring revenues from a consumable (hook) that customers need to frequently in order to benefit from the base product
  • Luring customers in with an inexpensive initial purchase
  • Need a lock in
26
Q

bait and hook examples

A
  • Gillette Razors – bait is the one razor handle, hook is the frequent blade purchase – where they make the most money
  • Nespresso – bait is the machine and hook are the pods
27
Q

freemium

A

Offer basic products and services free of charge, then premium services and advanced product features for a fee

Need to be successful in order for them to sign up to become premium members

Best models acquire a large customer base and excel in converting a substantial percentage to paid users

28
Q

freemium examples

A

Skype
Dropbox
Spotify
YouTube Premium

29
Q

servicizing

A

Providing services

Providing functionality rather than selling products

Not exchanging ownership
Serviczing is harder to imitate

30
Q

servicizing examples

A

HILTI

Xerox

31
Q

multi-sided platform

A

Value is created by facilitating interactions between two or more distinct but interdependent groups of customers (distinct groups)

Of value to one group only if the other groups of customers are also present – grows in value to the extent that it attracts more users – network effect

32
Q

multi sided platform examples

A

Uber
AirBnB
Facebook
Youtube

33
Q

social business

A

Intent is not to make a profit by selling a product to a customer, but to create an organization that achieves a social goal in a manner that is self-sustaining

Profits are reinvested in the business

Mission driven for-profit enterprise

34
Q

social business model canvas components

A
  • value proposition
  • segments
  • revenue
  • types of intervention
  • channels
  • surplus
  • key activities
  • key resources
  • partnerships and key stakeholders
  • cost structure
35
Q

soical business – how many customer segments

A

There are two customer segments – the customers and the one who they are giving the funds to

36
Q

types of intervention

A

what they are actually doing

37
Q

surplus

A

the money left over what are they going to do with it

38
Q

beneficiary

A

who are they helping

39
Q

traditional charity

A
  • primary driver is to achieve social value
  • Look for government subsidies
  • They are not self sustaining
  • Purely charitable funding from grants, dontations or endorsements
  • Additional market based revenue stream
40
Q

tradtional business

A
  • Primary driver is to achieve financial value

- Pure profit orientation; mainstream investors

BU121 Midterm (5 decks)

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