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.
