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Business Models

Published on Nov 18, 2015

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PRESENTATION OUTLINE

Business Models

What is involved

Business Model Generation

Alex Osterwalder & Yves Pigneur

Authors

Alex Osterwalder & Yves Pigneur

9 building blocks

taken from: "Business Model Generation"

Customer Segments

What part of the population do you serve?

Customer Segments

  • mass market
  • niche market
  • segmented
  • diversified
  • multi-sided platforms
Photo by Alex Barth

Mass Market

One large market of customers with similar needs
Photo by dno1967b

Niche Market

cater to specific customers needs
Photo by France1978

Segmented

same essential product with slightly differing customer needs

Diversified

Serving 2 or more unrelated market segments

Multi-sided platorms

Customers on both sides of the equation, both are needed

Value Propositions

satisfying customer needs with value propositions

Value Proposition

  • Newness
  • Performance
  • Customization
  • Getting the job done
  • Design

Value Proposition (cont.)

  • Brand/Status
  • Price
  • Cost Reduction
  • Risk Reduction
  • Accessibility

Newness

Offering something where nothing similar exists

Customization

tailoring products to specific customer needs

Performance

improving performance of existing product

Getting the Job done

help the customer get certain jobs done

Design

Product or stands out due to superior design

Brand/Status

simple act of displaying a certain brand

Price

similar value at lower price
Photo by bradleygee

Cost Reduction

Helping customers reduce cost in their business

Risk Reduction

Helping customers reduce the risk of purchase

Channels

Value delivered through communication, distribution and sales

Channels

  • Awareness
  • Evaluation
  • Purchase
  • Delivery
  • After Sales

Customer Relationships

How we maintain each customer segment

Customer Relationships

  • Consumer Acquisition
  • Customer Retention
  • Boosting Sales (upselling)

Types of Customer Relationsships

  • Personal Assistance
  • Dedicated personal assistance
  • Self-service
  • Automated services
  • Communities and co-creation

Revenue Streams

What we can expect from customers for our value

Revenue Streams

  • Asset sale
  • Usage fee
  • Subscription fees
  • Lending/renting/leasing
  • Licensing

Revenue Streams (cont.)

  • Brokerage Fees
  • Advertising

Key Resources

Assets offered to deliver our value

Key Resources

  • Physical
  • Financial
  • Intellectual
  • Human

Physical

  • Facilities
  • buildings
  • vehicles
  • machines
  • distribution networks

Financial

  • Cash
  • Lines of credit
  • Stock option pool
  • vendor financing

Intellectual

  • Brands
  • Proprietary knowledge
  • patents & copyrights
  • partnerships
  • customer databases
Photo by tombayly13

Human Resources

  • People in creative industries
  • Pharmaceutical companies
  • Sales heavy companies
Photo by TheeErin

Key Activities

Those things we do to essential to creating the value

Key Activities

  • Production
  • Problem Solving
  • Platform/Network
Photo by Esthr

Production

  • Design, making and delivery
  • Dominates the model of manufacturing firms

Problem Solving

  • Coming up with new solutions
  • Consultants
  • Hospitals
  • Other service organizations
  • Focus on knowledge/training
Photo by phalinn

Platform/Network

  • Matchmaking platforms
  • eBay
  • Visa/Mastercard
  • Windows OS
  • Apple iOS
Photo by Billy V

Key Partnerships

Some activities outsourced, some acquired

Key Partnerships

  • Strategic Alliances
  • Coopetition
  • Joint Ventures
  • Buyer-supplier relationships
Photo by LA 3-D Club

Motivations for creating

  • Optimization and economy of scale
  • Reduction of risk and uncertainty
  • Acquisition of resources and activities

Optimize

your company can't do it all effectively
Photo by Marc_Smith

Risk Reduction

form an alliance in one area while competing in another
Photo by GregoryH

Acquisition

rely on other firms to provide key resources or activities
Photo by djwudi

Cost Structure

All the elements result in the cost structure

Cost-Driven structure

  • Fixed Costs
  • Variable Costs
  • Economies of scale
  • Economies of scope
Photo by bradleygee

Fixed Costs

  • Rent
  • Salaries
  • physical facilities
Photo by RUNFAR

Variable Costs

  • Cost vary proportionally
  • Vary by volume of goods
  • Vary by volume of services
Photo by C J Wood

Economies of Scale

  • Cost advantages of expansion
  • Purchase in bulk
  • Minimize average cost per unit

Economies of Scale

  • Cost advantages of expansion
  • Purchase in bulk
  • Minimize average cost per unit

Economies of Scope

  • larger scope of operations
  • distribution channels
  • multiple products
  • Apple-iTunes, i---Everything!
Photo by train_photos

Value-Driven

  • Less concerned with cost
  • Focus is on value creation
  • Premium products
  • High Degree of personalized service
  • Luxury hotels, Mercedes