developing a business model canvas (bmc)
TRANSCRIPT
E.M. Erasmus, MA
FEF, MKB, February 2015
BUSINESS MODEL CANVAS
What we will do next…
• Discuss entrepreneurship (briefly)
• General theory of Business Model
Canvas
• Develop business model canvas for
proposed enterprise concept
Entrepreneurship
Entrepreneur
• Entrepreneur -> Originated from the French word: ‘entreprendre’ (to undertake)
Merriam Webster Dictionary: Entrepreneur is.. “one who organizes, manages, and assumes risk for a business or enterprise”
Classic views on entrepreneurship
• Frank H. Knight (1921) : entrepreneurship is about taking risk.
• The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
A different view on
entrepreneurship
Joseph Schumpeter (economist):
Definition of entrepreneurship should be
placed on innovation.
• New products
• New production methods
• New markets
• New forms of organization
A different view on
entrepreneurship
The function of the entrepreneur is
one of combining various input
factors in an innovative manner to
generate value to the customer
with the hope this value will
exceed the cost of the input
factors, thus generating returns
that result in the creation of wealth.
Entrepreneurship
To make it shorter… Entrepreneurship is the process of discovering
new ways of combining resources…
Successful entrepreneurs expand the size of the economic pie for everyone.
Some characteristics… • Motivated by an overwhelming need for
achievement and strong urge to build
• Optimistic in their decision-making processes
• Creative and enthusiastic spirit
• Passionate in what they do
• They take prudent risk
• Persuade others to join and help
• They think and act ‘outside the box’
• They create more than just personal value
Successful
Successful entrepreneurs…
Bill Gates, undergraduate at Harvard developed BASIC for the first microcomputer, went on to help found Microsoft in 1975.
By making software that increases human productivity, Gates expanded our ability to generate output (and income), resulting in a higher standard of living for all.
Successful entrepreneurs…
Sam Walton, the founder of Wal-Mart,
Innovations in distribution warehouse centers.
Shoppers benefit from the low prices and convenient locations that Walton’s Wal-Marts provide.
Successful entrepreneurs…
Fred Smith Fedex
Ted Turner CNN
Henry Ford Ford Automobiles
Ray Kroc McDonald’s
Martha Stewart M.S. Living
Walt Disney Disney
Oprah Winfrey Talk Show Host
Mark Zuckerberg Facebook
Robert Keane Vistaprint
Steve Jobs Apple
So why have they all been so
successful?
The all managed to come up with a
solid and effective business model
SO WHAT’S A BUSINESS
MODEL?
Write down your own definition…
Discuss it with your neighbor…
Which elements did you
mention when you defined
a business model?
What is a business model?
A business model describes the
rationale of how an organization
creates, delivers, and captures
value.
Few companies understand their
existing business model well enough
Business Model Canvas
Business Model Canvas
• BMC provides a simple, intuitive and
flexible tool that can be developed
rapidly and applied ongoing to iterate
and refresh the business strategy.
• In a single page view, the BMC provides
an overview of the business: it’s
offering, infrastructure, market and
finances.
Business Model Canvas
Building Blocks
Customer Segments
The different groups of people or organizations you aim to
reach and serve.
Value Proposition
The products and services that create value for specific
customer segments.
Channels
How you communicate with and reach your customers
segments to deliver a value proposition.
Customer Relationships
The type of relationships you establish with specific customer
segments.
Revenue Streams
The cash you generate from each customers segment
(subtracting costs from revenues to create earnings).
Key Resources
The most important assets and resources (physical,
intellectual, human, financial) required to make your
enterprise work.
Key Activities
The most important things that needs to be done to make the
enterprise work.
Key Partners
The network of suppliers and partners that make the
enterprise work.
Cost Structure
All the costs incurred to operate the enterprise.
Example
Example
Generating a BMC
Choose your business concept!
BMC template
Three significant advantages
1. Focus
2. Speed and agility
3. Common language
Edward M. Erasmus, MA
Facebook: http://www.facebook.com/edwardmerasmus
Twitter: http://www.twitter.com/em_erasmus
LinkedIn: http://www.linkedin.com/in/edwardmerasmus
Google+: https://plus.google.com/+EdwardErasmus
Instagram: http://www.instagram.com/em_erasmus
Blog: http://edwardmerasmus.wordpress.com