A business model describes the rationale of how an organization creates, delivers , and captures value

2. Def_BusinessModel A business model describes the rationale of how an organization creates, delivers, and captures value

4. The 9 Building Blocks 1: Customer SegmentsAn organization servesone or several Customer Segments.

5. The 9 Building Blocks 1: 2: Customer SegmentsAn organization servesone or several Customer Segments. Value PropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions.

6. The 9 Building Blocks 1: 2: 3: Customer SegmentsAn organization servesone or several Customer Segments. Value PropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions. ChannelsValue propositions are delivered to customers through communication, distribution, and salesChannels.

7. The 9 Building Blocks 1: 2: 3: 4: Customer SegmentsAn organization servesone or several Customer Segments. Value PropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions. ChannelsValue propositions are delivered to customers through communication, distribution, and salesChannels. Customer RelationshipsCustomer relationships are established and maintained with each Customer Segment.

8. The 9 Building Blocks 5: Revenue StreamsRevenue streams resultfrom value propositions successfully offered tocustomers.

9. The 9 Building Blocks 5: 6: Revenue StreamsRevenue streams resultfrom value propositions successfully offered tocustomers. Key ResourcesKey resources are the assets required to offer and deliver the previously described elements…

10. The 9 Building Blocks 5: 6: 7: Revenue StreamsRevenue streams resultfrom value propositions successfully offered tocustomers. Key ResourcesKey resources are the assets required to offer and deliver the previously described elements… Key Activities…by performing a number of Key Activities.

11. The 9 Building Blocks 5: 6: 7: 8: Revenue StreamsRevenue streams resultfrom value propositions successfully offered tocustomers. Key ResourcesKey resources are the assets required to offer and deliver the previously described elements… Key Activities…by performing a number of Key Activities. Key PartnershipsSome activities areoutsourced and some resources are acquired outside the enterprise.

12. The 9 Building Blocks 5: 6: 7: 8: 9: Revenue StreamsRevenue streams resultfrom value propositions successfully offered tocustomers. Key ResourcesKey resources are the assets required to offer and deliver the previously described elements… Key Activities…by performing a number of Key Activities. Key PartnershipsSome activities areoutsourced and some resources are acquired outside the enterprise. Cost StructureThe business model elements result in the cost structure.

13. The 9 Building Blocks

14. 1: Customer Segments The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.

15. 1: Customer Segments For whom are we creating value? Who are our most important customers?

16. 1: Customer Segments For whom are we creating value? Who are our most important customers? There are different types of Customer Segments. Here are some examples: Mass marketNiche marketSegmentedDiversifiedMulti-sided platforms (or multi-sided markets)

17. 2: Value Propositions The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment

18. 2: Value Propositions What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? Which customer needs are we satisfying? What bundles of products and services are we offering to each Customer Segment?

19. 2: Value Propositions What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? Which customer needs are we satisfying? What bundles of products and services are we offering to each Customer Segment? A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs. Newness Performances Customization ‘Getting the job done’ Design Brand/status Price Cost reduction Risk reduction Accessibility Convenience/usability

20. 3: Channels The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition

21. 3: Channels Through which Channels do our Customer Segments want to be reached? How can we reaching them? How can our Channels integrate? Which ones will work best? Which ones are most cost-efficient? How are we integrating them with customer routines?

22. 3: Channels Through which Channels do our Customer Segments want to be reached? How can we reaching them? How can our Channels integrate? Which ones will work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Channels have five distinct phases. Each channel can cover some or all of these phases. Awareness Evaluation Purchase Delivery After sales

23. 4: Customer Relationships The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments

24. 4: Customer Relationships What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How costly are they? How can they integrate with our business model?

25. 4: Customer Relationships What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How costly are they? How can they integrate with our business model? We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: Personal assistance Dedicated personal assistance Self-service Automated services Communities Co-creation

26. 5: Revenue Streams The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings)

27. 5: Revenue Streams 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?

28. 5: Revenue Streams 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? There are several ways to generate Revenue Streams: Asset sale Usage fee Subscription fees Lending/Renting/Leasing Licensing Brokerage fees Advertising

29. 5: Revenue Streams

30. 6: Key Resources The Key Resources Building Block describes the most important assets required to make a business model work

31. 6: Key Resources What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams?

32. 6: Key Resources What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? Key Resources can be categorized as follows: Physical Intellectual Human Financial

33. 7: Key Activities The Key Activities Building Block describes the most important things a company must do to make its business model work

34. 7: Key Activities What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams?

35. 7: Key Activities What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? Key Activities can be categorized as follows: Production Problem solving Platform/network

36. 8: Key Partnerships The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work

37. 8: Key Partnerships Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?

38. 8: Key Partnerships Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? It can be useful to distinguish between three motivations for creating partnerships: Optimization and economy of scale Reduction of risk and uncertainty Acquisition of particular resources and activities

39. 9: Cost Structure The Cost Structure describes all costs incurred to operate a business model

40. 9: Cost Structure What are the most important costs inherent in your business model? Which Key Resources are most expensive? WhichKey Activities are most expensive? Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model Cost-driven Value-driven

41. The nine business model Building Blocks form the basis for a handy tool, which we call the Business Model Canvas.

43. The Business Model Canvas, is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model.

46. Example: Apple iPod/iTunes Business Model

47. Example: Apple iPod/iTunes Business Model

48. Example: Apple iPod/iTunes Business Model

50. Tips 1: Use Sticky Notes Use a sticky note for each and every one of the building blocks of your business model. Ideas need to be mobile.