Complete Business Model Canvas

cost-driven and value-driven

2 broad classes of business model structure

optimization and economy of scale, reduction of risk and uncertainty, acquisition of particular resources and activities

3 motivations for creating partnership

niche market (customer segment)

A smaller part of a larger market in which customers have more specific needs and wants. These are common in supplier-buyer relationships, most commonly the example given is auto parts manufacturers who are very dependent on auto manufacturers for sale of their products.

Customer Segments

Building block 1 describes the different groups or organizations an enterprise aims to reach and serve or you target audience.

financial (key resource category 4)

Cash, credit, stock, loans, lines of credit, and other things that provide working capital

The 9 Building Blocks

Customer Segment, Value Proposition, Channels, Customer Relationship, Revenue Streams, Key Resources, Key Activities, Key Partnership, Cost Structure

fix pricing (pricing mechanism)

Here prices are fixed or non-negotiable, for example, Apple sells all its products to consumers are fixed prices. You cannot walk into an Apple store and negotiate the price.

joint ventures

Here you may join your company with another to create an entirely different entity, which may be more profitable for the both of you than if you were to operate separately. Example: Blu-ray is an optical disc format jointly developed by a group of the world's leading consumer electronics, personal computer, and media manufacturers.

delivery (channel phase 4)

How do we deliver a Value Proposition to customers? Over the counter, Delivered/Catered

value proposition

It describes the bundle of products and services that create value for a specific customer segment. It is the reason why customers turn to one company over another.

design

Produce a plan, simulation or model.

channel phases

Raising awareness among customers about a company's products and services Helping customers evaluate a company's Value Proposition Allowing customers to purchase specific products and services Delivering a Value Proposition to customers Providing post-purchase customer support

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

Several ways to generate revenue streams

Buyer-supplier relationships

Specifically, building reliable relationships with a buyer or supplier. You need to incorporate the characteristics of trust, quality, and commitment between the two entities.

Getting the job done

Value is created by simply helping a customer complete a task..

brand

a name, term, sign, symbol,

Business Model Canvas

a tool used to create and analyze business models

optimization and economy of scales

allocation of resources and activities

key partnerships

are the relationships that you have with other business, governmental, or non-consumer entities that help your business model work. These can be the relationships that your company has with your suppliers, your manufacturers, business partners, etc. These partnerships that you will undoubtedly create will be forces that help your business succeed in areas that would be inefficient for you to do yourself.

accessibility

availability of products and services to customers

intellectual (key resource category 2)

brand, proprietary knowledge, patents and copyrights, partnerships and customer databases are increasingly important components of a strong business model

risk reduction

customers value reducing the risk they incur in purchasing products or services

brokerage fees (revenue stream)

derives from intermediation services performed on behalf of two or more parties

asset sale (revenue stream)

derives from selling ownership rights to a physical product

cost structure

describes all cost incurred to operate a business model

customer channels

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

key resources

describes the most important assets required to make a business model work. These are the resources that allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues.

business model

describes the rationale of how organization creates, delivers and capture value.

customer relationships

describes the type of relationship a company establishes with its specific customer segments. Customer relationships are driven by customer acquisition, customer retention, and boosting sales - in other words you need to get, keep, and grow your customer relationships.

acquisition of particular resources and activities

extend their own capabilities by relying on other firms to furnish particular resources or perform certain activities

advertising (revenue stream)

fees for advertising a particular product, service or brand on your website, within your buildings, or publications.

cost-driven

focus on minimizing costs wherever possible

mass market (customer segment)

focuses on a large group of customers without really distinguishing between different types of customers, and aims to satisfy a set of broadly similar needs and problems.

multi-sided platforms markets (customer segment)

markets that serve interdependent customer segments. For example, a credit card company interacts with both the card holder, and the merchants who accept those cards

self-service (category of customer relationships)

no direct relationship with customers

subscription fee (revenue stream)

selling continuous access to a service

value-driven

some companies are less concerned with the cost implications of a particular business model design and instead focus on value creation

customer acquisition

The process of obtaining or getting new customers for the firm.

price

offering similar value but at a lower price

after sales (channel phase 5)

How do we provide post-purchase customer support? Call center, Return policy, Customer assistance

coopetition (key partner category 1)

This is the strategic partnership between competitors. It means that companies who may be directly competing will still work together to generate awareness for their shared industry, in the attempt to gain new users for all those in the industry to compete for.

strategic alliances between non-competitors (key partner category 1)

This means that you and a company that you have no direct competition with, industry wise, will partner together in ways that will benefit the both of you.

personal assistance, dedicated personal assistance, self-service, automated service, communities, co-creation

categories of customer relationship

fixed cost, variable cost, economies of scale, economies of scope

characteristics of cost structure

problem-solving (key activity category 2)

coming up with new solutions to individual customer problems

communities (category of customer relationships)

companies are utilizing user communities to become more involved with customer/prospects to facilitate connections between community members

fixed cost

costs that remain the same despite the volume of good or service produced

variable cost

costs that vary proportionally with the volume of goods or services produced

lending/renting/leasing (revenue stream)

created by temporarily granting someone the exclusive right to use a particular asset for a fixed period in return of a fee

personal assistance (category of customer relationships)

customer can communicate with a real customer representative

licensing (revenue stream)

giving customers permission to use protected intellectual property in exchange for licensing fee

cost reduction

helping customer reduce cost is an important way to create value

purchase (channel phase 3)

how do we allow customers to purchase specific products and services? Web based, Brick and Mortar, Self Checkout

evaluation (channel phase 2)

how do we help customers evaluate our organization's Value Prop? Ex. Surveys, Reviews

awareness (channel phase 1)

how do we raise awareness about our company's products and services? Advertising (Word of Mouth, Social Media, Newspaper, etc.)

performance

improving the products and services

physical (key resource category 1)

includes physical assets such as buildings, vehicles, machines, raw goods, and many others

dedicated personal assistance (category of customer relationships)

involves dedicating a customer representative specifically to an individual client

assets

is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it's manufacturing equipment or a paten

economies of scope

larger scope of operations

customization

making products to meet a particular customer's needs or wants/customize

convenience

making things more convenient or easier to use

human (key resource category 3)

manpower, human resource, creativity, experience,

segmented market (customer segment)

market is one in which you have multiple different groups of customers with different sets of needs and problems. In this case you would provide the same product or service with slightly different value propositions to meet the varying customer needs.Businesses who have segmented customer targets have very small variations in their needs for a service. For example, a financial planner who targets a few segments: Net worth individuals from $0-$100k Net worth individuals from $100k-$150k Net worth individuals from $150k-$250k

diversified market (customer segment)

market is similar to a segmented except that it utilizes entirely different sets of value propositions to cater to unrelated customer segments rather than just slightly altering the product. A company that has diversified customer segments is serving markets with quite different needs and wants. An example could be a company that serves both business to consumer (B2C) and business to business (B2B) markets.

Co-creation (category of customer relationships)

more companies are going beyond the traditional customer-vendor relationship to create value with customers

newness

new set of needs that customers previously didn't perceive because there was no similar offering.

elements of value proposition

newness, performance, customization, getting the job done, design, brand/status, price, cost reduction, risk reduction, accessibility, convenience

economies of scale

output expands

channel types (partner)

own store, partner store, wholesaler

dynamic pricing (pricing mechanism)

pricing that changes based on market conditions. This could include bargaining or negotiating price, price based on supply and demand or the available inventory. Hotels, airlines and other industries will alter price based on demand, usage, or inventory. Dynamic pricing fluctuates whereas fix pricing does not.

reduction of risk and uncertainty

reduce risk in a competitive environment characterized by uncertainty

production (key activity category 1)

relate to designing, making and delivering a product in substantial quantities and/or superior quality

Platform (key activity category 3)

relate to platform management service provisioning and platform

channel types (direct)

sales force, web sales

usage fee (revenue stream)

the more service is used the more the customer pays

key activities

the most important activities in delivering a company's value proposition. What key activities do our value propositions require?Logistics, Manufacturing, Maintenance What key activities do our channels require? Advertising/ Equipment What key activities do our customer relationships require?Human resources/Design/Change

customer retention

the practice of keeping customers by building long-term relationships

automated service (category of customer relationships)

this type of relationship mixes a more sophisticated for of customer

revenue streams

used to map out the income generated from each of a company's Customer Segments. It's important to note that this building block represents the cash generated from each Customer Segment, not the profit. Profit is the income generated after subtracting costs.