lecture 4 Flashcards
What is a business model?
How an organization creates value and how it profits from this value
Amongst what is the business model a relation?
- the innovation
- the market
- the organization
- the cost and revenue
What are the key factors every business model should have at least one of to be a sucessfull business?
- personalization
- closed loop
- asset sharing
- usage based pricing
- collaborative ecosystem
- agile and adaptive organization
What is personalization? (key factors for business models)
tailoring a product or service to an individuals’ needs
What is closed loop? (key factors for business models)
it’s important to be environmentally aware, a company is responsible for every part of the product loop (vb. nespresso recylcing its own cups)
What is asset sharing? (key factors for business models)
sharing or getting rid of assets by outsourcing them (vb. Uber doesn’t own taxis but outsource their assets and still earn money)
What is usage based pricing? (key factors for business models)
people pay for what they use
What is collaborative ecosystem? (key factors for business models)
one ecosystem with lots of services on it (vb. App store)
What is agile and adaptive arganization? (key factors for business models)
organizations become more informal because they decentralize, outsource and form coalitions with other organizations
What is the business model canvas? (BMC)
a learning and practical tool of thinking about innovations an how to make them a success
What 4 part does the BMC consist of?
- value proposition (innovation)
- market
- cost and revenue
- organization
What is the value proposition about? (BMC)
innovation in terms of the value it delivers for the customer
According to the value proposition, on what 4 levels must the innovation match the organizations’ stragery?
- societal level
- industry level
- market level
- firm level
what is the societal level about?
must fit within the wider societal developments like economics and socially (a tool is the PESTEL analysis)
What is the industry level about?
the wider industry a innovation takes place, everything that migth be good or a rist (a tool is the Five Forces Analysis)
What is the market level about?
the sprecific area/ industry where the innovation takes place to determine the attractiveness, early adopters, laggards ect. (tools are S-curves, diffusion of innovation)
What is the firm level about?
linking the value proposition to the rest of the organization. how it fits within the organization (firm)
What 3 parts can we devide the market part of BMC into
- customer segment
- customer relations
- channels
What is the customer segment about
defining the customers is terms of
- demographics
- psychosocial
- gratification/needs/motivation
- skill level and expertise
- willingness to pay
thinking about how the user is connected to the innovation
what 4 markets van the organization be aiming for?
- niche > specific, small group op people
- mass > potentially everyone can adopt
- segmented/ diversified > one or several submarket?
- one- sided / more- sided > one or more types of customers?
What are customer relations about
how to acquire and retain customers (lecture 8 more)
what are market channels about?
channels that relate to marketing, sales and after sales
- awareness
- evaluation
- purchase
- delivery
- after sales
What are costs involved in the innovation?
- based on the building blocks of the canvas
- inital costs before vs. after launch
- fixed vs. variable costs
- cost vs. value driven innovations
What is a revenue stream and what does it involve?
everything you wil derive from the innovation:
- assessment of the willingness to pay to deterime price
- setting up and choosing a revenue model
- one-time vs. reacurring revenue
- setting a growth model
How can an organization have continuing revenue streams and remaing profitable?
- increasing a customer base
- additional sales > upgrades, subscriptions
- reducing costs
- keeping eye on competition
What customer related revenue models do we know?
- direct sales
- usage fees
- subscirption fees
- leasing
- licensing
- virtual goods
- freemium
- the middleman
- on-demand
- the marketplace
what are usage fees?
people pay per dag for a hotel or per KM on a GO scooter
what are subsciption fees?
paying on regular intervals ( phone subscription)
what is leasing?
a subscription fee but offers more (leasing a car > the company takes care of everything)
what is licensing?
selling things you own to other companies (franchising)
what are vistual goods?
vb. skins or coins in games
what is freemium?
something is free but after a while you have to pay (Google drive > free untill a certain amount of documents)
What is the middleman?
companies that sit in the middle of the market but own nothing, low-risk because they are responsible for few things (thuisbezorgd, booking.com)
what is on-demand
previding a service when the customer wants it
what are some non-customer related revenue models
- advertising
- banners on websites
- investment- based
- grants
- affiliate marketing
what are the key resources required for an innovation?
- raw materials
- machines
- financial capital
- people
- knowledge
- IT
why is it important for organisations to have relationships with resources outside the company?
- to derive efficiency gains
- to reduce risks
- to aquire not in-house resources
