Business Model Generator Tools


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Tools for business model generator

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Business Model Generator Tools

  1. 1. Tools for Business Model Generator Prepared by Hani Tarabichi From Business Model Generator Book
  2. 2. The Spirit!!! • • • • • • Create Value Build New Business Improve and transforms organizations Innovative way of thinking Visionary – Game changer Challenge driven
  3. 3. What is a Business Model • A business model describes the rationale of how an organization creates, delivers, and captures value • Business concept must be simple, relevant, and understandable • A business model is built on 9 blocks covering 4 areas: – – – – Customer Offers Infrastructure Financial viability
  4. 4. 9 blocks of business model • • • • • • • • • Customer Segment CS Value Proposition VP Channels CH Customer Relationships CR Revenue Streams RS Key Resources KR Key Activities KA Key Partnership KP Cost Structure C$
  5. 5. Customer Segment CS • Defines the different groups of people that company aims to reach and serve • Without profitable customers NO company can survive • Distinct segment = Common needs = Common behavior = Better service • The question is WHICH segment to serve and which to ignore???
  6. 6. Customer Segment CS • Customer groups represents different segments IF: – Their needs require and justify distinctive offers – They are reached through different channels – They require different kind of relationships – They have substantially different profitability – They are willing to pay for different aspects of the offer
  7. 7. Customer Segment CS • Types of segments: – Mass Market: FMCG, B2C – Niche Market: B2B, specific requirements – Segmented Market: By size or industry – Diversified Market: Diversified customer business model – Multi-Sided Platform: Credit cards companies
  8. 8. Value Proposition VP • Bundle of products and services that create value to specific segment • VP is the reason why customers choose one company over another • VP solves customer problems and satisfies his needs • Some VP might be innovative while others may be similar to other offers
  9. 9. Value Proposition VP • What value do we deliver to our customers? • Which one of our customer’s problems are we solving? • Which customer needs are we satisfying? • What bundle of products/services are we offering to each customer segment? • VP are quantitative: Price, speed.. • VP are qualitative: Design, customer experience
  10. 10. Value Proposition VP • Examples of VP: – – – – – – – – – – – Newness Performance Customization Getting the job done Design Brand status Price Cost reduction Risk reduction Accessibility Convenience/ Usability
  11. 11. Channels CH • How to communicate with and reach customer segments to deliver value proposition • Deals with any sales touch point: – Communication – Distribution – Sales channels
  12. 12. Channels CH • Channels help in: – Raising awareness – Helping customers evaluate Value Proposition – Allows customers to purchase – Delivers value proposition to customers – Provide post-purchase customer support
  13. 13. Channels CH • Channels help in: – Raising awareness – Helping customers evaluate Value Proposition – Allows customers to purchase – Delivers value proposition to customers – Provide post-purchase customer support
  14. 14. Channels CH • Through which channels do our customer segments want to be reached? • How are we reaching them now? • How are our channels integrated? • Which one works best? • Which channel is most cost effective?
  15. 15. Channels CH • Channels options: – Direct .vs. Indirect – Owned .vs. Partner • Which channel mix?? OWN Direct Sales Force Partner Indirect Web Site Own store Own store Partner store Wholesaler
  16. 16. Customer relationships CR • Type of relationships a company establishes with specific customer segment • Drivers for customer relationships: – Customer acquisitions – Customer retention – Boosting sales/ up-selling
  17. 17. Customer relationships CR • What type of relationships does each of our customer segments expect us to establish? • How costly is it? • How customer relationships integrated with rest of business model?
  18. 18. Customer relationships CR • Categories of customer relationships: – Personal assistance: Human interaction – Dedicated personal assistance: Most intimate – Self service: No direct relationship with customer – Automated services: Self service + Automated process – Communities: involvement on-line – Co-creation: Reviews, content creation..
  19. 19. Revenue Stream RS • The cash a company generates from each customer segment • For which value is each customer segment truly willing to pay? • Revenue streams for different segments may have different pricing mechanism – – – – – – Fixed price list Bargaining Auction Market dependant Volume dependant Yield dependant on inventory
  20. 20. Revenue Stream RS • • • • For what do customers currently pay? How are customers currently pay? How would they prefer to pay? How much does each customer revenue stream contribute to overall revenues?
  21. 21. Revenue Stream RS • Ways to generate Revenue Streams: – Asset Sale: Selling ownership rights of products – Usage fees: phone services, hotels – Subscription fees: Access to service, annual fees, gyms, mobile.. – Lending/renting/leasing: Temporary rights to use – Licensing: Permission to use protected intellectual property in exchange for licensing fees – Brokerage fees: Intermediary services – Advertising
  22. 22. Key Resources KR • Important assets to make business model works • Can be owned or leased
  23. 23. Key Resources KR • What key resources do our value proposition requires? • What key resources do our distribution channels requires? • What key resources do our customer relationship requires? • What key resources do our revenue streams requires?
  24. 24. Key Resources KR • Key resources categories: – Physical: Manufacturing facilities, building, vehicles, machines, systems, POS, Distribution networks – Intellectual: Brands, Proprietary knowledge, patents, copy rights, partnerships, customer data base – Human: Human resources – Financial: Either resources or guarantees
  25. 25. Key Activities KA • Most important things a company must do to make its business model works • What key activities do our value proposition require? • What key activities do our channels require? • What key activities do our Customer segment require? • What key activities do our revenue streams require?
  26. 26. Key Activities KA • Production – Design – Making – Delivering • Problem solving – New solutions – Knowledge – Continuous training • Platforms / Network
  27. 27. Key Partnerships KP • Network of suppliers and partners that make business model works • Partnerships and alliances are made to: – Optimize business model – Reduce risk and uncertainty – Acquire resources
  28. 28. Key Partnerships KP • Types of partnerships: – Strategic alliance between none competitors – Coopetition: Strategic partnership between competitors – Joint-Venture: Develop new business – Buyer-supplier relationships to assure reliable supplies
  29. 29. Key Partnerships KP • Who are our key partners? • Who are our key suppliers? • Which key resources are we acquiring from partners? • Which key activities do partners perform?
  30. 30. Cost Structure C$ • Describes all costs incurred to operate a business model • Can be easily calculated after defining – Key activities – Key resources – Key partnerships
  31. 31. Cost Structure C$ • What are the most important costs inherent in our business? • Which key resource are most expensive? • Which key activities are most expensive? • Is our business model Cost Driven .vs. Value Driven?
  32. 32. Cost Structure C$ • Cost driven business model – Focus on minimizing cost – Use low price value proposition – Maximum automation – Extensive outsourcing • Value driven business model – Focus on value creation – Premium value proposition – High degree of personalized services
  33. 33. Cost Structure C$ • Cost structures can have the following characteristics: – Fixed cost: Constant cost despite volume of production – Variable cost: Proportional cost with output volumes – Economies of scale: Cost advantages as output expands and average cost per unit drops – Economies of scope: Cost advantages due to large scope