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Business Model Canvas
From:
Business Model Generation Preview
http://businessmodelgeneration.com/canvas/bmc?_ga=1.42742181.1455922759.1436139831
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Definition Business Model
A business model describes the rationale of how an organization creates, delivers, and captures value
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Nine Building Blocks
1. Customer SegmentsAn organization serves one or several Customer Segments.
3. ChannelsValue propositions are delivered to customers
Through communication,
distribution, and sales
Channels.
2. Value Propositions
It seeks to solve customer problems and satisfy customer needs with value
propositions.
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Nine Building Blocks (cont.)
4. Customer RelationshipsCustomer relationships
are established and
maintained with each
Customer Segment.
6. Key ResourcesKey resources are the
assets required to offer
and deliver the previously
described elements…
5. Revenue Streams
Revenue streams result
from value propositions
Successfully offered to
customers.
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Nine Building Blocks (cont.)
7. Key Activities…by performing a number
of Key Activities.
9. Cost StructureThe business model
elements result in the
cost structure.
8. Key PartnershipsSome activities are
outsourced and some
resources are acquired
outside the enterprise.
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1. Customer Segments
The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.
Customer groups represent separate segments if:
• Their needs require and justify a distinct offer
• They are reached through different Distribution Channels
• They require dfferent types of relationships
• They have substantially dfferent profitabilities
• They are willing to pay for dfferent aspects of the offer
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2. Value PropositionThe Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment.
• Newness• Performance• Customization• “Getting the Job Done”• Design• Brand/Status• Price• Cost Reduction• Risk Reduction• Accessibility• Convenience/Usability
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3. Channels The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.
Channels serve several functions, including:
• 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
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4. Customer Relationships The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments
• What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
• Which ones have we established? How costly are they?• How are they integrated with the rest of our business
model?
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5. Revenue StreamsThe Revenue Streams Building Block represents
the cash a company generates from each customer Segment (costs must be subtracted from revenues to create earnings).
A business model can involve two different types of Revenue Streams:
• Transaction revenues resulting from one-time customer payments
• Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support
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5. Revenue Streams (cont.)Driving Revenue Stream Questions:• For what value are our customers really willing to pay?• For what do they currently pay? • How are they currently paying?• How would they prefer to pay? • How much does each Revenue Stream contribute to
overall revenues?
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6. Key ResourcesThe Key Resources Building Block describes
the most important assets required to make a
business model work. Key resources can be physical, intellectual, human, and financial
Identification of Key Resources involves assessing:• What Key Resources do our Value Propositions require?• Our Distribution Channels?• Customer Relationships?• Revenue Streams?
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7. Key ActivitiesThe Key Activities Building Block describes the most important things a company must do to make its business model work.
Identification of Key Activities involves assessing:• What Key Activities do our Value Propositions require?• Our Distribution Channels? • Customer Relationships?• Revenue streams?
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8. Key PartnershipsThe Key Partnerships Building Block describes the network of suppliers and partners that make the business model work.
Assessing Key Partnerships involves identifying:• Who are our Key Partners? • Who are our key suppliers?• Which Key Resources are we acquiring from partners?• Which Key Activities do partners perform?
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9. Cost StructureThe Cost Structure describes all costs incurred to operate a business model.
Describes the most important costs incurred while operating under a particular business model.
Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs.
Driving Questions:• What are the most important costs inherent in our business• model? • Which Key Resources are most expensive? • Which Key Activities are most expensive?
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Business Model CanvasKey Partners
Key Activities
Value Propositions
CustomerRelationships
CustomerSegments
Key Resources
Channels
Cost Structure Revenue Streams