The document discusses various aspects of business models, emphasizing that a business model defines how an organization creates, delivers, and captures value. It breaks down components such as value propositions, customer segments, channels, revenue streams, key resources, partnerships, and cost structures, providing examples of each. Additionally, it touches on the evolution of business models over time and the importance of validating them through customer feedback and minimum viable products.

1. Rammohan
Pallav
Barah

2. Burn your Business Plan
No Business Plan
Survives First Contact
With A Customer

3. Business Model
Describes the rational of
how an organization
creates, delivers and
captures value

4. Value Proposition
What Are You Building and For Who?

5. Value Proposition
 It’s about solving a need or a problem
 Distinct mix of elements catering to the segments need
 Type of Value Prop (non-exhaustive list)
 Newness – Cell phones
 Performance – Mostly Technology
 “Getting the job done” – Airlines pays Rolls-Royce fee for
every hour engine runs
 Design – Mostly Fashion & consumer electronics
 Brand – Rolex watch
 Price – Southwest , Deccan, Nano
 Cost reduction – SalesForce – CRM app
 Risk reduction – Used cars buyers receives 1-year
guarantee
 Accessibility – Mutual funds , NetJets(rental private jets,
fractional ownership)
 Convenience/Usability – iPod, iTunes

6. Customer Segments
Who Are They?
Why Would They Buy?

7. Customer Segments
 Who are they
 Demography
 Age etc.,
 Types of Segment
 Mass Market – Consumer electronics
 Niche market – Supplier/Buyer relationship
 Segmented – Retail Arm of Credit Suisse for
assets <100k USD, and >500K USD
 Diversified – Amazon retail diversification
w/cloud
 Multi-Sided – Media companies, Credit Card
companies

8. Channels
How does your deliver your product to your
Customers?

9. Channels
 Web
 Mobile
 Physical

10. Customer Relationships
How do you Get, Keep and Grow Customers?

11. Customer Relationships

12. Customer relationship
 Personal assistance - POS, call center
 Dedicated – Relationship manager
 Self-Service – ATM
 Automated Services – Online profile
 Communities – Sears social
 Co-creation – Amazon encourages
reviews

13. Revenue Streams
How do you Make Money?

14. Revenue Streams
 How do you make money from each
customer segment
 Some Revenue Streams (non-
exhaustive)
 Subscription fee – World of Warcraft
 Leasing / renting – Zipcar (rent cars by hour)
 Licensing – Netflix
 Brokerage fee – Credit card providers
 Usage fee – Telecom operators
 Fixed Menu Pricing vs Dynamic
Pricing

15. Key Resources
What are your most important Assets required to
make the business model work?

16. Key Resources
 Physical
 Intellectual
 Human
 Financial

17. Key Partners
Who are your Partners and Suppliers?

18. Key Partners
 What key resources are we acquiring
from partners
 What key activities do they perform
 Strategic alliance

19. Key Activities
What’s Most Important for the Business?

20. Key Activities
 Production
 Problem solving
 Platform/Networks

21. Cost Structure
What are the Costs and Expenses

22. Costs
 Fixed costs
 Variable costs
 What are the most important costs

23. Example BMCs
Disclaimer : We had no inside
information in creation of these BMCs.
The BMCs have been created with
publicly available information available
on websites, reports, personal
experience etc.,

24. Competitive BMCs - FlipKart
Vision : Online Value-Shopping
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES SEGMENTS
PARTNERS • Supply chain PROPOSITION RELATIONSHIPS
Through email,
Publishers optimisation online chat and • Urban Indian
• Delivery optimisation database marketing
• Convenience book lovers
• SEO
• Wide selection
• Auto recommendations
• Cheaper • Internet-
• Trust (CoD) connected
KEY
CHANNELS people with
no credit
RESOURCES
• Delivery staff Web cards
• Technology
capability • First-time
online
shoppers
COST STRUCTURE REVENUE STREAMS
Book sales
Technology, warehouses, deep
discounts

25. Competitive BMCs -
Crossword
Vision : Leisure book browsing
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES SEGMENTS
PARTNERS • Sourcing PROPOSITION In RELATIONSHIPS
store, Crossword
• Publishers • Visual merchandising club
• Franchisees • Urban Indian
• Book reading sessions
• Shopper’s • Crossword Literary • Browsing book lovers
Stop (parent Award experience
co) • Instant • Companies
KEY gratification
CHANNELS • Stationery
buyers
RESOURCES
• Real estate • Store
• Phone • Casual mall
• Web visitors
• Institutional
COST STRUCTURE REVENUE STREAMS
• Book sales • Coffee
Real estate, cost of inventory
• Advertising • Trinkets

26. Multi Sided BMCs – “Mid-
Day”
Vision : Evening Gossip
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES SEGMENTS
PARTNERS • Brand building PROPOSITION
• Distribution • RELATIONSHIPS
Transactional • Mumbai
• PTI, AP etc. • Deep multi-year
• Newsgathering English-
• Improving ABC • Light high-touch speaking
numbers in key entertainment relationships mass market
demographics after/during a • Office-goers
KEY busy day • Commuters
• “2nd newspaper” CHANNELS
RESOURCES • Corporates
• Journalists • Mumbai-wide • Railway platforms for advertising
reach of readers • Kirana shops
• Salespeople with in a relaxed Advertisers +
media-planning context in a • Direct Agencies:
knowhow unique time • Mass market
window • Mumbai
COST STRUCTURE REVENUE STREAMS • Classified
• Discount
• Retail offtake (5%)
Newsroom, newsprint
• Advertising (95%)
2 or more distinct but interdependent customers –
usually subsidized on one end to attract “other”
side

27. Evolving BMC – Makemytrip in
2000
Vision : Online travel for NRI
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES SEGMENTS
PARTNERS • Brand building PROPOSITION • RELATIONSHIPS
Online chat
• OTA/Airline Partnership • NRIs
• Email marketing
• OTA • Indian community
• International advertising Cheap tickets to Advertisers +
Airlines • Travel content India online Agencies:
• Travel editors • Mass market
KEY • Mumbai
CHANNELS • Classified
RESOURCES • Discount
• Technology • Online
• People
COST STRUCTURE REVENUE STREAMS
• Technology • Travel Ad network
• Deep Discounts/Offers • Customer Retention rate 30%
3 months into Oct 2000 (launch of MMT)
realized there is no market for online-travel, so

28. Evolving BMC – Makemytrip in
2005
Vision : “One”-stop travel stop
KEY KEY VALUE CUSTOMER CUSTOMER
ACTIVITIES SEGMENTS
PARTNERS • Supplier relations • PROPOSITION
Instant booking • RELATIONSHIPS
Call center
• LCC • Develop domain- • Indian
with real-time • Retail shops business
• Hotels specific skills to offer purchase • 24*7 support
• Travel agents best product travelers
• Search provided • Indian tirth
and tour • Advertising - Media Lowest Price
operators yatra
• Customized travelers
KEY products for
CHANNELS • Indian
social/religious holidayers
RESOURCES trips, weekend
• Proprietary Tech to • Online
package Advertisers +
link all supplier sites
• One-stop for Agencies:
to check inventory
air/rail/bus/hotel • Mass market
• Domain-experts
• Money-back • Mumbai
guarantee • Classified
COST STRUCTURE REVENUE STREAMS • Discount
• MMT developed product in travel+hotel (no Ads)
• Technology
• Marketing done for airlines
• Ticket and hotel consolidators
• Hotels finders fee
India Market ready (external factors – IRTC online so Indians
get comfortable with online CC, Deccan needed to sell tickets
online

29. Google Business Model

30. Other types of Business Models
?
 (Un)bundled business – Bharti Airtel,
 Long Tail – Lego Custom Factory, Lulu
 Freemium – Flickr, RedHat (supports
every release for 7 years over open
source using subscription), Skype
 Bait & Hook – Cell phones for free in
US

31. What after BMC ?
 Create MVP
 Validate BMC with MVP (customer
dev)

32. Reference