Business model

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What is a business model and how fulfill a business model canvas. Some example of wellknown companies business model: Coca Cola (glass bottle!), Financial Times, LinkedIn, Groupon, Twitter, Facebook, Blockbuster and Google.
Finally community business model (geographically based, professional and online communities) and what is a business plan and how is diverse from a business model.

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Business model

  1. 1. Business model IED Lesson 5Frieda Brioschifrieda.brioschi@gmail.com
  2. 2. Course program1. Italian Startups2. Set up a startup in Italy3. Ive got an idea. And now?4. Value analysis5. Business model6. Communicate, communicate, communicate7. Being net8. Find your market9. Funding: venture capital, business angel and otherways of financing10. Pitch
  3. 3. Todays table of content1. Business Model2. Examples3. Business Plan
  4. 4. Value analysis: quick recapDuring last lesson you learnt about direct and indirectcosts: 1. the former are costs that can be identified specifically with a particular project or activity labour agreements 2. the latters include all the other costs
  5. 5. Value analysis: quick recapYou went through the definitions of cash and accrualbasis accounting: • difference between them has to do with the time frame in which revenues and expenses are recorded and reported
  6. 6. Value analysis: quick recapSome examples of perceived value:• Gillette Fusion Vs Gillette Custum Plus Disposable• 3M Scotch Tape Vs 3M Scotch Command Strips• A-Style, Lacoste, etc.Value is the extent to which a good/service isperceived by its customer to meet his needs/wants,measured by the customer’s willingness to pay for it.
  7. 7. Business model
  8. 8. Business model /1A business model describes the rationale of how anorganization creates, delivers, and captures value(economic, social, cultural, or other forms of value).The process of business model construction is part ofbusiness strategy.Its a way to represent core aspects of a business,including purpose, offerings, strategies, infrastructure,organizational structures, trading practices, andoperational processes and policies. http://en.wikipedia.org/wiki/Business_model
  9. 9. Business model /2The essence of a business model is that it defines themanner by which the business enterprise deliversvalue to customers, entices customers to pay forvalue, and converts those payments to profit: it thusreflects management’s hypothesis about whatcustomers want, how they want it, and how anenterprise can organize to best meet those needs, getpaid for doing so, and make a profit. http://en.wikipedia.org/wiki/Business_model
  10. 10. The business model canvas
  11. 11. 1 – Value propositionThe collection of products and services a businessoffers to meet the needs of its customers. Its whatdistinguishes itself from its competitors.It provides value through various elements• newness,• performance,• customization,• "getting the job done",• design,• brand/status,• price,• cost /risk reduction, ecc. http://en.wikipedia.org/wiki/Business_Model_Canvas
  12. 12. Value Proposition Builder1.Market: for which market is the value proposition being created?2.Value/customer experience: what does the market value most? The effectiveness of the value proposition depends on gathering real customer, prospect or employee feedback.3.Offering: which products or services are being offered?4.Benefits: what are the benefits the market will derive from the product or service?5.Alternatives and differentiation: what alternative options does the market have to the product or service?6.Proof: what evidence is there to substantiate your value proposition? http://en.wikipedia.org/wiki/Value_proposition
  13. 13. 2 – Customer segmentsA company must identify which customers it tries toserve. Various set of customers can be segmentedbased on the different needs and attributes to ensureappropriate implementation of corporate strategymeets the characteristics of selected group of clients.The different types of customer segments include:• Mass Market• Niche Market• Segmented• Diversify (multiple customer segments with differentneeds and characteristics) http://en.wikipedia.org/wiki/Business_Model_Canvas
  14. 14. Do you know who your customers are? http://www.designvision.com/strategy/
  15. 15. Really? http://www.designvision.com/strategy/
  16. 16. 3 - ChannelsA company can deliver its value proposition to itstargeted customers through different channels.Effective channels will distribute a company’s valueproposition in ways that are fast, efficient and costeffective. http://en.wikipedia.org/wiki/Business_Model_Canvas
  17. 17. 4 – Customer relationshipTo ensure the survival and success of anybusinesses, companies must identify the type ofrelationship they want to create with their customersegments.• Personal Assistance• Dedicated Personal Assistance• Self Service• Automated Services• Communities• Co-creation http://en.wikipedia.org/wiki/Business_Model_Canvas
  18. 18. Why does it matter? http://soffrontblog.com/2011/02/07/benefits-of-an-on-demand-crm-application/
  19. 19. 5 – Revenue streamsThe way a company makes income from eachcustomer segment.• Asset Sale• Usage Fee• Subscription Fees• Lending/Leasing/Renting• Licensing• Advertising http://en.wikipedia.org/wiki/Business_Model_Canvas
  20. 20. http://www.flickr.com/photos/silkcharm/2893602428/
  21. 21. 6 – Key resourcesAre the assets required to offer and deliver valueproposition to the customer.• Physical• Intellectual• Human• Financial http://en.wikipedia.org/wiki/Key_resources_(business_model)
  22. 22. 7 – Key partnerIn order to optimize operations and reduce risks of abusiness model, organization usually cultivate buyer-supplier relationships so they can focus on their coreactivity.Complementary business alliances also can beconsidered through joint ventures, strategic alliancesbetween competitors or non-competitors. http://en.wikipedia.org/wiki/Business_Model_Canvas
  23. 23. 8 – Key activitiesThe most important activities in executing acompanys value proposition. http://en.wikipedia.org/wiki/Business_Model_Canvas
  24. 24. 9 – Cost structureThis describes the most important monetaryconsequences while operating under differentbusiness models.• Fixed Costs• Variable Costs• Economies of Scale• Economies of Scope http://en.wikipedia.org/wiki/Business_Model_Canvas
  25. 25. Examples
  26. 26. Coca Cola http://sopinion8ed.wordpress.com/2012/11/23/the-coca-cola-business-model-and-their-competitive-advantage/
  27. 27. Financial Times http://glennas.wordpress.com/2010/07/31/business-model-innovation-alexander-osterwalder/
  28. 28. LinkedIn http://bmimatters.com/
  29. 29. Groupon http://www.adriaanrijkens.nl/2011/06/29/the-groupon-business-model-canvas/
  30. 30. Twitter http://bmimatters.com/2012/02/18/understanding-twitter-business-model-design/
  31. 31. Facebook http://bmimatters.com/2012/04/10/understanding-facebook-business-model/
  32. 32. Blockbuster http://daphnecurry.wordpress.com/2011/08/25/business-model-for-blockbuster-video/
  33. 33. Google http://bmimatters.com/2012/04/18/comparing-facebook-and-google-business-models/
  34. 34. WikipediaDoes an original business plan still exist forWikipedia? http://www.quora.com/Wikipedia/Does-an-original-business-plan-still-exist-for-Wikipedia
  35. 35. Community models
  36. 36. Geographically based• neighbourhood• productive district• close to me http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html
  37. 37. Professional communityAll the people making the same job.It’s an easy target. http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html
  38. 38. Online community• Easy to reach (massive tools available)• There’s no clear limits between being part of acommunity and a company business (let’s think ofUGC)• Online users are available to pay for an interestingservice (freemium!)• Can be created as part of my business (i.e.Amazon’s libraries network) http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html
  39. 39. Business plan
  40. 40. Business planBusiness plan describes what, how long e how muchmoney you need to realize your business model.Usually a business plan is a doc both for internal andexternal use. Internally it describes the companystrategy, externally it presents the project tostakeholder.
  41. 41. Business planWriting a business plan help to clarify every companyactivities and• optimize and develop available resources• improve consciousness on financial aspects, cash flows, break even, etc.• Analyze risks• Identify path to specific goals• Etc. http://www.nascelimpresa.it/doc/guida_BUSINESS_PLAN.pdf
  42. 42. Business model Vs Business planPlans are static ..models are dynamic! - Steve Blank - http://www.slideshare.net/sblank/bus-model-and-cust-dev-jan-2013
  43. 43. Never forget.. !!! http://retrolife.typepad.com/the_overexamined_life/entrepreneurship/
  44. 44. Next weekCommunicate, communicate, communicate.

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