Lesson 4: Developing a Business Model Flashcards
- company’s plan for making a profit. It identifies the products or services the business will sell, the target market it has identified, and the expenses it anticipates.
- a framework for how a company creates value.
Business model
Introduced the dynamics of traffic lights in
developing the business model
Don Debelak or Don Deebelak
positive signals that can help entrepreneurs develop ideal business models and eventually succeed.
Green lights
negative signals that entrepreneurs should be wary of.
Red lights
Characteristics of high-valued customers:
- easy to find;
- willing to pay a price that will reasonably profit the entrepreneur;
- easy to persuade with the least promotional effort;
- join the bandwagon of customers that when consolidated, can generate a substantial amount of revenues.
Green lights (no need to memorize just yes)
Target high-value customers
Offer products or services with great value
Offer products or services with reasonable profits
Red lights
Satifying the customer becomes too costly and irrational
Being a market leader is difficult to sustain
Return on investment (ROI) takes too long and too small
Offer products or services with great value, enumerate details
- must have unique attribute
- efficient distribution system
- collaborate with relevant partners to offer excellent customer exp
Two ways of achieving profit
Increase markup
Decrease operational costs
How to decrease operational costs
- devise efficient distribution sys.
- lessen unnecessary manpower
- apply lean manufacturing processes
- add support products or auxiliary services
What is ‘in marketing, they call it “lifetime value of a customer”’
Satisfying the customer becomes too costly and irrstional
Type of guarantee that a manufacturer or similar party makes regarding the condition of product
Warranty
