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