quizlet chapter 5 Flashcards
What does the Business Model Canvas show?
(1) how a business runs
(2) how it creates and captures value
What is the difference between a business model and a business plan?
A business model is the heart of a business plan. A business plan is a written description of a business’s future (Includes various steps and financial information).
What does the Business Model Canvas include?
(1) Customer Segments
(2) Value Propositions
(3) Channels
(4) Customer Relationships
(5) Revenue Streams
(6) Key Resources
(7) Key Activities
(8) Key Partnerships
(9) Cost Structure
In the Business Model Canvas, what are Customer Segments?
The “Who”:
(1) Different groups of people or organizations an enterprise tries to reach
(2) Without customers, companies cannot survive
(3) Base of everything before the busies model
(Ex. Mass market, market niche, segmented, diversified, multi-sided platforms)
In the Business Model Canvas, what are Value Propositions?
The “Why”:
(1) The bundle of products and services that creates value for a specific customer market
(2) Why customers turn to one company over another (Ex. Apple vs. Samsung)
(3) Solves a problem/Satisfies a need
(Ex. Newness, performance, customization, design, brand/status, price, cost, risk-reduction, etc.)
What are the 5 Phases of Channels in the Business Model Canvas?
(1) Awareness - How do we raise awareness about a company?
(2) Evaluation - How do we help customers evaluate our value propositions?
(3) Purchase - How do we allow customers to purchase our products?
(4) Delivery - How do we deliver our value proposition?
(5) After Sales - How do we provide post-purchase customer support?
In the Business Model Canvas, what are Channels?
The “How”:
How the company communicated with and reaches its customer segments to deliver a value proposition
(Ex. Sales force, web sales, brick-and-mortar buildings, wholesale)
In the Business Model Canvas, what are Customer Relationships?
(1) The type of relationship a customer establishes with a specific customer segment
(2) May be driven by customer acquisition, customer retention, boosting sales (upwelling), etc.
(Ex. Personal assistance, self-service, automated services, community, co-creation)
In the Business Model Canvas, what are Revenue Streams?
(1) The cash a company generates from each customer segment (Profit = Revenue - Costs)
What are the two different forms of Revenue Streams in the Business Model Canvas?
(1) Transaction Revenues - One time payments (Ex. Buying shoes)
(2) Recurring Revenues - Ongoing payments (Ex. Subscriptions, shipments, etc.)
What are the different pricing mechanisms which garner revenue streams in the business model canvas?
(1) Fixed “menu pricing” - Predefined prices based on STATIC variables
(2) Dynamic Pricing - Price changes on a market condition (Ex. Negotiation/Bargaining, Real Time Market (Stocks), Auctions, etc,)
In the Business Model Canvas, what are Key Resources?
(1) The most important assets required to make a business model work
(2) Allow enterprises to create and offer value propositions, reach markets, maintain relationships, and earn segments
(3) Can be physical (Ex. buildings, vehicles), financial (Ex. Cash, credit, stock), intellectual (Ex. Brands, copyrights, patents, partnerships), or human (Ex. Workers)
In the Business Model Canvas, what are Key Activities?
(1) Most important things a company must do to make its business work
(2) Similar to key resources, but instead of the “what” it is the “how” - How do we use these resources?
What do Key Resources in the Business Model Canvas include?
Production - Designing, making, and delivering the product
Problem Solving - Activities such as knowledge management and continuous training that generate new solutions to individual problems
Platform/Network - (1) Networks, matchmaking programs, software, brands (2) Platform management, service provisioning, (2) Platform promotion
In the Business Model Canvas, what are Key Partnerships?
(1) Network of suppliers and partnerships that make the business model work
(3) Economies of Scale - Designed to optimize the allocation of resources and activities
(2) The CORNERSTONE of business models
(Ex. Strategic Alliance between non-competitors, Coopetition or the strategic alliance been competitors, Joint ventures to develop new businesses, Buyer-Supplier relationships to assure reliable supplies)
