Business Model Canvas

pricing mechanisms

*Fixed Pricing* - List price: Fixed prices for individual products, services, or other Value Propositions. - Product feature dependent: Price depends on the number or quality of Value Proposition features. - Customer segment dependent: Price depends on the type and characteristic of a Customer Segment. - Volume dependent: Price as a function of the quantity purchased. *Dynamic Pricing* - Negotiation, e.g. bargaining: Price negotiated between two or more partners depending on negotiation power and/or negotiation skills. - Yield Management: Price depends on inventory and time of purchase. Normally used for perishable resources such as hotel rooms or airline seats. - Real-time-market: Price is established dynamically based on supply and demand. - Auctions: Price determined by outcome of competitive bidding.

value propositions

-describes the bundle of products and services that create value for a specific customer segment -solves the customers problem or satisfies a customer need

categories of key resources

-physical: buildings, vehicles, machines, systems, point-of-sales systems -intellectual: brands, proprietary knowledge, patents and copyrights, partnerships (difficult to develop) -human -financial: cash, lines of credit, or a stock option pool for hiring key employees

categories of key activities

-production: designing, making, and delivering a product in substantial quantities and of superior quality -problem solving: coming up with new solutions to individual customer problems (hospitals, consultancies dominate this) -platform/Network: matchmaking platforms, software, and even brands can function as a platform

customer relationships can be driven by

customer acquisition, customer retention, boosting sales (upselling)

9 building blocks

customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, cost structure

self service (customer relationships)

customers help themselves

four main areas of a business

customers, offer, infrastructure, and financial viability

dedicated personal assistance (customer relationships)

dedicating a customer representative specifically to an individual client -deepest and most intimate type of relationship (long periods of time)

customer segments

defines the different groups of people or organizations an enterprise aims to reach and serve

key resources

describes the most important assets required to make a business model work

key activities

describes the most important things a company must do to make its business model work

3 motives for creating partnerships

1. optimization and economy of scale: designed to optimize the allocation of resources and activities (most basic form) 2. reduction of risk and uncertainty: help reduce risk in a competitive environment 3. acquisition of particular resources and activities: extend their own capabilities by relying on other firms to furnish particular resources or perform certain activities

4 types of key partnerships

1. strategic alliances between non-competitors 2. coopetition: strategic partnerships between competitors 3. joint ventures to develop new businesses 4. buyer-supplier relationships to assure reliable supplies

2 different types of revenue streams

1. transaction revenues resulting from one-time customer payments 2. recurring revenues resulting from ongoing payments to either deliver a value proposition to customers or provide post-purchase customer support

channel types

Own: direct (sales force, web sales) and indirect (own stores) Partner: indirect (partner stores, wholesaler)

ways to generate revenue streams

asset sale, usage fee, subscription fees, lending/renting/leasing, licensing, advertising, brokerage fees

5 channel phases

awareness, evaluation, purchase, delivery, after sales

personal assistance (customer relationships)

based on human interaction

niche market customer segment

cater to specific, specialized customer segments usually found in supplier-buyer relationships

co-creation (customer relationships)

co-create with customers. (e.g. Amazon inviting customer to write reviews)

communities (customer relationships)

companies increasingly are utilizing their communities to become more involved with customers (through online communities to gain/exchange knowledge)

key partnerships

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

Business Model

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

customer relationships

describes the types of relationships a company establishes with specific customer segments

segmented customer segment

distinguish between market segments with slightly different needs and problems

mass market customer segment

don't distinguish between different customer segments usually found in consumer electronics sector

channels

how a company communicates with and reaches its customer segments to deliver a value proposition

types of customer segments

mass market, niche market, segmented, diversified, multi-sided platforms

automated services (customer relationships)

mix of sophisticated customer services and automated process

newness, performance and customization (value proposition)

newness: satisfy an entirely new set of needs that customers previously didn't perceive because there was no similar offering performance: improving product or service (common way to create value) customization: tailoring products or services to the specific needs of individual customers

revenue streams

represents the cash a company generates from each customer segment (costs must be subtracted from revenues to create earnings)

multi-sided platforms customer segments

serve two or more interdependent customer segments

diversified customer segment

serves two unrelated customer segments with very different needs and problems