Post on 05-Jan-2016
Lecture 4Business Model Canvas
THE BUSINESS MODEL CANVAS
Customer Segments
• Who will be your customers?
• Group customers in segments or target markets
• Each group should share a common need, behavior, or attribute
Segment Types• Mass Market• Niche Market• Segmented• Diversified• Multi-sided Platform
Value Propositions
• What benefits do you provide to your customers?
• What features provide those benefits?
• What makes you different than your competitors?
Characteristics of Value Propositions
• Newness• Performance• Customization• “Getting the Job Done”• Design• Brand/Status• Price• Cost Reduction• Risk Reduction• Accessibility• Convenience/Usability
Channels
• How will you create “touch points” with your customers?
• Touch points serve multiple purposes:
– Raising awareness
– Selling to a customer
– Delivering to a customer
– Post-sale customer support
Channel phases:• 1. Awareness
– How do we raise awareness about our company’s products and services?
• 2. Evaluation– How do we help customers evaluate our
organization’s Value Proposition?• 3. Purchase
– How do we allow customers to purchase specific products and services?
• 4. Delivery– How do we deliver a Value Proposition to
customers?• 5. After sales
– How do we provide post-purchase customer support?
Customer Relationships
• What will your relationship with your customer look like?– Personal or
automated?– Transactional or
long-term?
• Depends on the product and what it takes for customer to buy.
Examples of Customer Relationships
• Personal assistance• Dedicated Personal Assistance• Self-Service• Automated Services• Communities• Co-creation
Revenue Streams
• The good stuff!– How do you make
money?
• Sale, usage fee, subscription fee, rent/lease, or licensing fee.
• Is pricing fixed or will you bargain?
Revenue Streams
• Types:• Asset sale• Usage fee• Subscription Fees• Lending/Renting/• Leasing• Licensing• Brokerage fees• Advertising
• Fixed pricing• List Price• Product
feature dependent
• Customer segment dependent
• Volume dependent
0Dynamic pricing
0Negotiation
(bargaining)0Yield
Management0Real-time-
Market
Key Resources
• What assets do you need to provide your product or service?
• These can be physical, financial, intellectual, or human resources.
Types of resources• Physical• Intellectual (brand patents, copyrights, data)• Human• Financial
Key Activities
• What most important things you need to do to provide your product or service?
• Example include sales, R&D, production, and customer support
Categories of Activities • Production• Problem Solving• Platform/Network
Key Partnerships
• From what companies or individuals will you buy? To what companies will you outsource resources?
• Use partnerships so that you can focus on what you do best as well as save money.
Motivations for partnerships:• Optimization and economy• Reduction of risk and uncertainty• Acquisition of particular resources and activities
Cost Structure
• What are your main expenses?
• Include costs of key resources and key activities
• Don’t forget about costs that come from any key partnerships
Costs
• Is your business more:• Cost Driven (leanest
cost structure, low price value proposition, maximum automation, extensive outsourcing)
• Value Driven ( focused on value creation, premium value proposition)
0Sample cost characteristics:
0Fixed Costs (salaries, rents, utilities)
0Variable costs0Economies of scale0Economies of scope