Business Model and the Business Model Canvas

Customer segments

- Customers for whom the company creates value - types of customer segments (5): mass market, niche market, segmented, diversified market, multi-sided market Guide questions: Who are your target customers? What do they usually "think off?", "See?", "Feel", and "Do?"

Cost structure

- all costs (or expenses) of production and operations of the business - most important monetary consequences of operating the business - approaches to handling finances (2): Cost-Driven, Value-Driven Guide questions: What are the major sources of costs and expenses in the business?

Key resources

- available properties/ assets critical in producing the product or making the business operate - raw ingredients necessary to create value (products) for the customer - needed to sustain and support business operations - some key resources (5): physical (material) resources, human resources (laborers and managers), financial resources, intellectual resources, data/ information resources Guide questions: What are your most important properties/ assets? What are the things (materials/ ingredients) that your business should have to product its Value Proposition (product)? (If you are a services type of business) What talents or skills are required to create and deliver the Value Proposition to customers? What unique techniques or methods (intellectual assets) are essential to produce the business' Value Proposition (product)?

Key activities

- critical actions (or essential tasks) to produce/ manufacture or deliver your product - tasks done by the company to "transform" your raw materials/ ingredients into your final product (value proposition) - ex.: product (for manufacturing type of business), problem solving or consultancy (for service type of business), platform/ network (for those businesses who provide rental of platforms to customers) Guide questions: What are the essential tasks (processes; activities) implemented to transform raw materials into the final product? What are the essential tasks done to provide the service product to the customers?

Revenue streams

- focuses on how revenue is generated from sales - the way a company makes revenue from each customer segment - ways to generate a revenue stream (7): asset sale, usage fee, subscription fee, lending/leasing/renting, licensing, brokerage fee, advertising Guide questions: How does the business generate revenue from the value propositions (products) that are being sold to various customer segments?

Business model

- how a business organization generates revenue and makes a profit from operations - description of means and methods a firm employs to earn the revenue projected in its plans - views the business as a system and answers the question, 'How are we going to make money tl survive and grow?' - how you planned to make money

Value proposition

- pertains to the collection of products and services a business offers to meet its customers' needs - reason why customers select the PRODUCT (goods and services) Guide questions: What's compelling about the proposition (product or service)? Why do customers buy or use the product?

Value proposition, customer segments, channels, customer relationships, revenue streams, key partnerships, key resources, key activities, cost structure

Key components of a Business Model Canvas (9)

Channels

Methods or locations where the company communicates and delivers products to customer segments Guide questions: How are the value propositions (product) promoted, sold, and delivered? What are your distribution channels of platforms?

Business Model Innovation Hub

Online forum for business professionals and researchers. 470 members from this forum contributed case studies, examples, and critical comments to the research

Alexander Osterwalder, Yves Pigneur

Who developed the Business Model Canvas in 2010 and collaborated wirh 470 members of the Business Model Innovation Hub

Business Model Canvas (BMC)

- strategic management template (chart) for describing and analyzing new or existing business models - represents the collective experience of a community of diverse businesspeople - gives entrepreneurs the structure of a business plan without the overhead and the improvisation of a 'back of the napkin' sketch without the fuziness (and coffee rings) -Osterwalderiii

Key partnerships

- the particular suppliers and partners needed in producing the products/ values - strategic actions to achieve key partnership (4): buyer-supplier relationships (most common), strategic alliances between non-competitors, cooperation (starategic alliances between competitors), joint-ventures (when companies share different projects) Guide questions: Who are the key partners of the company? How is relationship with key partners built and strengthened?

Customer relationships

- types of relationship established between the seller and the consumer segments reached - forms of customer relationships (6): personal assitance, dedicated personal assistance, self service, automated service, user communities, co-creation Guide questions: What kind of assistance do your customers need? How does the customer feel after he/ she has purchased your products/ services' final outcome