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Business Model Canvas
- 1. Søren Svanebjerg 2011 Canvas How we plan to grow and what we hope Growth Strategy our organisation will be in 5 years, do Key Partners Key Activities Capabilities Key Resources Value Proposition Customer Relations Channels Mar ket & Customer Segments Growth Strategy we plan to sell and if so to who and when. Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy Key Customer Activities Relations The skills we need in order to create the - How we intend to relate to and interact with the Market & Key Value consumer. Capabilities Customer Partners Proposition - value proposition, Segments particularly the team. The offer to the consumer, including how and why it Who we will need to Key addresses their need / fulfills their job to be done. Channels What group(s) of people partner with or the input we benefit from the value are dependent on in order Resources How consumers themselves would describe How the value proposition is communicated and proposition, how many to develop / deliver the the benefit. there are now and in the value proposition. delivered to the future. consumer. Cost Structure << Revenue Streams & Pricing Model How will we price the proposition, whether it be fixed, variable or subscription How much it will cost to initially develop the value proposition and how much it pricing. Includes alternativ sources of revenue, particular important if the will cost to subsequently market end deliver it. consumer is not expected to pay. Who the existing competitors are and how we will react to them and likely new Competitive Strategy entrants into this space, why will we win?
- 2. Søren Svanebjerg 2011 What,Who & How Growth Strategy Key Partners Key Activities Capabilities Key Resources Value Proposition Customer Relations Channels Mar ket & Customer Segments How & When? Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy What & How? How? What & Which? What? Who? Who? Who & How? What? What? << How? Who & How?
- 3. Søren Svanebjerg 2011 VRISA& Generic Strategies Growth Strategy Key Partners Key Activities Capabilities Key Resources Value Proposition Customer Relations Channels Mar ket & Customer Segments Sustainable? Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy Rare? Imitable? Substitut- Imitable? Valuable? Growing? able? Rare? Imitable? Affordable? Appropriability Valuable? Cost Leadership, Differentiation, Focused?
- 4. Søren Svanebjerg 2011 Porters5 forces Growth Strategy Key Customer Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy Supplier Power: Competitors Rivalry: Buyer Power: Supplier concentration Number of competitors (concentration) Number of buyers relative to sellers Availability of substitute inputs Relative size of competitors (balance) Product differentiation Importance of suppliers inputs to company Industry growth rate Buyers switching cost to other product Suppliers product differentiation Fixed costs vs. variable costs Buyers profit margins Importance of industry to suppliers Product differentiation Buyers use of multiple sources Companys switching cost to other input Capacity augmented in large increments Buyers threat of backward integration Suppliers threat of forward integration Buyers switching costs Sellers threat of forward integration Companys threat of backward integration Diversity of competitors Importance of product to the buyer Exit barriers Buyers volume Strategic stakes Threat of Substitution: Threat of new Entrants: Relative price of substitute Barriers to entry Relative quality of substitute -Economies of scale Switching cost to buyers -Product differentiation -Capital requirements -Switching costs to buyers -Acces to distribution channels -Other cost advantages -Government policies Incumbants defense of market share Industry growth rate
- 5. Søren Svanebjerg 2011 Growth Strategy Key Customer Value Proposition Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • What value do we deliver to the customer? • Which one of our customer’s problems are we helping to solve? • What bundles of products and services are we offering to each customer segment? • Which customer needs are we satisfying? • characteristics – Newness – Performance – Customization – “Getting the Job Done” – Design – Brand/Status – Price – Cost Reduction – Risk Reduction – Accessibility – Convenience/Usability
- 6. Søren Svanebjerg 2011 Growth Strategy Key Customer Customer Segments Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • For whom are we creating value? • Who are our most important customers? • Mass Market • Niche Market • Segmented • Diversified • Multi-sided Platform
- 7. Søren Svanebjerg 2011 Growth Strategy Key Customer Customer Relationships Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • What type of relationship does each of our Customer Segments expect us to establish and maintain with them? • Which ones have we established? • How are they integrated with the rest of our business model? • How costly are they? • examples – Personal assistance – Dedicated Personal Assistance – Self-Service – Automated Services – Communities – Co-creation
- 8. Søren Svanebjerg 2011 Growth Strategy Key Customer Channels Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • Through which Channels do our Customer Segments want to be reached? • How are we reaching them now? • How are our Channels integrated? • Which ones work best? • Which ones are most cost-efficient? • How are we integrating them with customer routines? • 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?
- 9. Søren Svanebjerg 2011 Growth Strategy Key Customer Revenue Streams Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy •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? types: fixed pricing: dynamic pricing: Asset sale List Price Negotiation( bargaining) Usage fee Product feature dependent Yield Management Subscription Fees Customer segment dependent Real-time-Market Lending/Renting/Leasing Volume dependent Licensing Brokerage fees Advertising
- 10. Søren Svanebjerg 2011 Growth Strategy Key Customer Competitive Strategy Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy •Who are our competitors and how do they perform? •Who are the likely entrants? •How is the industry developing? •Are we going for cost leadership, differentiation or broad scope? •Are our capabilities valued, rare, inimitable, sustainable and appropriable? •What are our Buyer power like? •What are our Supplier power like?
- 11. Søren Svanebjerg 2011 Growth Strategy Key Customer Key Activities Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • What Key Activities do our Value Propositions require? • Our Distribution Channels? • Customer Relationships? • Revenue streams? • categories – Production – Problem Solving – Platform/Network
- 12. Søren Svanebjerg 2011 Growth Strategy Key Customer Key Resources Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • What Key Resources do our Value Propositions require? • Our Distribution Channels? • Customer Relationships? • Revenue Streams? • types of resources – Physical – Intellectual (brand patents, copyrights, data) – Human – Financial
- 13. Søren Svanebjerg 2011 Growth Strategy Key Customer Key Partners Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • Who are our Key Partners? • Who are our Key suppliers? • Which Key Resources are we acquiring from partners? • Which Key Activities do partners perform? • motivations for partnerships: – Optimization and economy – Reduction of risk and uncertainty – Acquisition of particular resources and activities
- 14. Søren Svanebjerg 2011 Growth Strategy Key Customer Cost Structure Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • What are the most important costs inherent in our business model? • Which Key Resources are most expensive? • Which Key Activities are most expensive? • 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) • sample characteristics: – Fixed Costs (salaries, rents, utilities) – Variable costs – Economies of scale – Economies of scope
- 15. Søren Svanebjerg 2011 Growth Strategy Key Customer Profit Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • Are the revenue streams superceeding the costs? • Do the nature of cost structure match the revenue types? – Variable vs. Fixed – Payment terms Supplier vs. Customer • Can Initial investments be paid back within acceptable time perspective?
- 16. Søren Svanebjerg 2011 Growth Strategy Key Customer Growth Activities Relations Mar ket & Key Value Capabilities Customer Partners Proposition Segments Key Channels Resources Revenue Streams Cost Structure << Pricing Model Competiti ve Strategy • Is there an interesting growth potential in the business case? • How shall growth be achieved? – Organic growth – Mergers & Acquisitions • What are capital requirements for growth? • How shall required capital be raised? – Lending from financial institutions – Divesting of non-core business – New investor capital • Existing investors • New investors • What are the exit strategy?