Chapter 5 Flashcards
Economic Feasibility Question
Can we do it?
Economic Viability Question
Can we make money doing it
Business Model
what is it (2)?
what does it prove?
how a venture creates, delivers and captures value. Network of activities and resources
Proves start-up can be a sustainable business
Evidence Based Entrepreneurship
Practice of create business model by hypothesizing, testing, and validating
Customer Value
4 forms of value
Understood and generated in several ways so subjective to customer
Fill unmet needs, deliver products with differentiation, provide service, create money
Value Proposition and example
Venture tells its customers about the value it intends to provide to them
example: Broadcast Yourself - Youtube
Value Creation and example
Developing products, services and features that customers value
etc Amazon Prime with fast delivery and cheap products
Value Delivery and examples of how this is done
Providing promised services and benefits to customers
multiple suppliers, distribution channels, tracking numbers
Value Capture and example
generating revenue and profit from value provided to customers
etc loyalty relationships and subscriptions
Market Entry Strategies 4
Imitation
Differentiation
Disruption
Innovation
Imitation
Existing customers and existing products and services
example: coffee shop near starbucks
Differentiation
New Customer with Existing Product and Service.
Example: Electric toothbrush to unveil unmet needs
Disruption
Existing customers with New product and service
Example: Massive Open Online Course
Innovation
New Product/Service and New Customer
Example: Social Media Sites
Brandon Steiner
what business did he he first start?
what did he then observe and create?
What was his approach?
What did he emphasize and move towards?
- started sports bar called sporting club and hired athletes to make an appearance
- observed young athletes needed professional help and created steiner sports
- learn as you go approach, not business model
- emphasized margins etc revenue and expense difference and switched approach to business model
Business Model and Agile Relationship for small company
Easier to be agile, spot flaws and make efficient changes to business model in beginning phase or for a smaller company
Business Model and Agile Relationship for large company
For large company it is not as easy, some fail due to inability to change or adapt business model
Four Parts of a Business Model
Offering
Customer
Infrastructure
Financial Viability
Offering x3
What does offering include
- what you offer to a particular customer segment.
- The value generated by customers
- how to reach and communicate with customers
- Includes Customer Value Proposition
Customers x2
People Populating the segments of a market that your offering is serving
Individuals and businesses willing to pay for what you offer
Infrastructure
All resources (people, technology, products, suppliers, partners and facilities) that an entrepreneur must have to deliver customer value proposition
Financial Viability
revenue and cost structure to meet operating expenses and financial obligations
Offering Components of Business Model Canvas x1
Value Delivery (CVP)
Value Delivery (CVP)
Solve Problem/need of important customers and value we deliver
Customer Components of Business Model Canvas x3
Customer Segments
Customer Channels
Customer Relationship
Customer Segments
Customer grouping of a market, and most important customers
Channels
All the ways we can reach our customers etc communication/sales/service
Customer Relationship
How we establish and maintain relationships with customers
Infrastructure Components of Business Model Canvas x3
Key Activities, Key Resources, Key Partners
Key Activities
What are the most important activities to get the job done
Key Resources
What resources do you need to accomplish key activities and deliver CVP
Key partners
Who are our suppliers, buyers and distributors? Cannot do it all ourselves
Financial Viability Components of Business Model Canvas x2
Revenue Stream
Cost Structure
Revenue Stream x3
How do we generate revenue? How much does each stream contribute to total? How much do we need to sell?
Cost Structure x2
What are the most important costs etc (resources, activities). All expenses required to execute and run business model
