C-207 9 components of business model canvas

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1) customer segments 2) value propositions 3) channels 4) customer relationships 5) revenue streams 6) key activities 7) key resources 8) key partners 9) cost structure

9 components of the business model canvas

cost driven company

looks to minimize all costs

value driven company

more focused on delivering great customer value in terms of quality or prestige.

infrastructure

the left side of the business model canvas focuses on what

customer

the right side of the business model canvas focuses on what

cost structure

what are the most important cost drivers in your business model? which key resources and activities are most expensive? this defines all the cost and expense that your company will incur while operating your business model. this final step is importnat because it will help your team decide whether to pivot or proceed. your business can either be cost-driven or value-driven.

value propositions

what value are you going to deliver to the customer? which customer pain-points are you addressing? this is an innovation, service, or feature intended to make a company or product attractive to customers. based on a review and analysis of benefits, costs, and value that an organization can deliver to its customer. it is the reason why customers turn to one company over anothe.r this can change. final output should be a list of benefits arranged by priority.

key activities

what value propositions do you require? the most important activities in executing a company's value proposition. these include your product distribution, research, and development, strategy.

channels

which are to be focused on to reach the desired customer segments? how are those channels integrated? which one are the most cost-effective? these describe how a company communicates with and reaches its customer segemtnese to deliver its value proposition. these can be physical such as a store needed to sell clothes or a local market, or they could be virtual such as e-commerce website selling clothing online. or it can be a mix of both.

customer relationships

you should clarify what type of relationship do you maintain with each customer segment? what are the expectations of your customers? how to establish them? this describes the type of relationship a company establishes with its specific customer segments. these are driven by customer acquisition, customer retention, and boosting sales- in other words, you need to get, keep, and grow this.

key resources

describes the most imporatnt assets required to make a business model work. thse can be things like your office, hosting requirements, human resources, financial transportation, electricity. these should be mapped to the key activities.

customer segments

for whom are you creating value? what product and services are you offering to each customer segment? this defines the groups of people or organization you aim to reach or serve. it is like demographic information of your customers- age, gender, time spent working. what are they willing to give up to use your product.

revenue streams

how do i make money? who are the customers willing to pay and for what benefit? how would they prefer to pay? how are they currently payinh? how dose each stream add up to the total revenue? not only do you think about the price of a product, but also about the value customers are willing to pay for, how customers pay for products, what ype of product are you selling, and what ype of market you are entering. how to generate this: asset sale, subscription fees, leasing, licensing, and advertising.

key partners

who are they? who are the key suppliers? which key resources are you acquiring from them? which key activities do your partners perform? these are the external companies or suppliers that you would need to perform your key activities and deliver value to the customers. in order ot optimize operations and reduce risks of a business model, organizations usually cutlivate buyer-supplier relationships so they can focus on their core activity. business alliances can be considered through joint ventures, strategic alliances between competitiors or non-competitors.

business model canvas

strategic tool for describing, analyzing, and designing business models. it is a visual chart with elements describing a firm's or product's value proposition, infrasctructure, customers, and finances. it helps a company align its activities by understanding the potential trade-offs. it offers focus, flexibility, and transparancy. singel page with aims and leaves out all the unnecessary stuff. you can identify strenght, weaknesses, and priorities. it was proposed by alexander osterwalder.


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