The Business Model Canvas

What are the 7 ways to generate revenue streams?

1. Asset Sale ex) Amazon sells others books 2. Usage Fee ex) Pay as you go cell phone 3. Subscription Fees ex) Magazine 4. Lending/Renting/Leasing ex) my car 5. Licensing ex) media industry selling usage of a song in a movie 6. Brokerage Fees ex) credit card companies 7. Advertising ex) facebook

What are the 9 building blocks of the business model canvas?

1. Customer segments 2. Value Proposition 3. Channels 4. Customer Relationships 5. Revenue 6. Key Resources 7. Key Activities 8. Key Partnerships 9. Cost Structure

What are 2 types of Channels?

1. Direct (own) 2. Indirect (partner)

What are two types of pricing?

1. Fixed 2. Dynamic

What are 4 key resources?

1. Physical 2. Intellectual 3. Human 4. Financial

What are 3 key activities?

1. Production 2. Problem Solving 3. Platform/Network

What are 2 types of revenues seen in the BMC?

1. Transaction or one time 2. Recurring

What is the opposite of a cost driven company? ex) McDonalds

A value driven ex) Five Guys

Customer Segment Type: Multi-sided platforms or Multi-sided markets

An organization serving two or more independent customer segments ex) credit card company

What are Economies of Scope?

Cost advantages a business enjoys due to a larger scope of operations. ex) In large enterprise the same marketing activities or distribution channels may support multiple products

What are Economies of Scale?

Cost advantages that a business enjoys as its output expands. ex) Large companies benefit from larger bulk purchase rates this along with other factors can decrease cost per unit as output rises

*Cost Structure*

Describes all costs incurred to operate a business model

*Value Propositions*

Describes the bundle of products and services that create value for a specific customer segment

*Key Resources*

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

*Key Activities*

Describes the most important thing a company must do to make its business model work

*Key Partnerships*

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

*Customer Relationships*

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

Customer Segment Type: Segmented

Groups with slightly different varying needs and problems ex) Metal manufacturer with different customer segments as the watch industry, medical, and industrial automation

*Channels*

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

Customer Segment Type: Mass Market

One large group of customers with broadly similar needs and problems ex) consumer electronics

What is fixed menu pricing?

Predefined prices are based on static variables

What is dynamic pricing?

Prices change based on market conditions

*Revenue Streams*

Represents the cash a company generates from each customer segment

Customer Segment Type: Diversified

Serves two unrelated customer segments with very different needs and problems ex) Amazon as a mass market and as a cloud computing service

Customer Segment Type: Niche Market

Specific, specialized customer segments ex) supplier-buyer relationships like car part manufacturers

*Customer Segments*

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

What are 5 things that can contribute to value proposition and creation?

1. Newness 2. Performance 3. Customization 4. Price 5. Brand Status

What are 3 motivations for creating partnerships?

1. Optimization and economy of scale 2. Reduction of risk and uncertainty 3. Acquisition of particular resources and activities

What 3 examples of customer relationship categories?

1. Personal and Dedicated Personal Assistance 2. Self-Service and Automated Services 3. Communities and Co-creation