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Building the Business Model

Building the Business Model. Definition.

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Building the Business Model

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  1. Building the Business Model

  2. Definition • “A business model is a description of how your company intends to create value in the marketplace. It includes that unique combination of products, services, image and distribution that your business carries forward. It also includes the underlying organization of people, and the operational infrastructure that they use to accomplish their work”. distribution people products Business Model services image infrastructure • Source: Kaplan and Warren (2013)

  3. The 3Ms • The Business Model combines creativity innovation and entrepreneurship and is based on; • Market demand • Market size and structure • Margin analysis • ……is it worth it?

  4. Linking creativity, innovation and entrepreneurship • Source: Shaper et al (2013)

  5. Choosing the right Business Model QUESTION: How many different business models can we come up with to generate revenue from a lemonade stall? • Source: Adapted from Babson College

  6. Types of Business Model • Some examples; • Unit sales • Hire complete service • Rent stall • Franchise • Advertising • Subscription • All you can eat

  7. Developing the Model reshape plan experiment learn

  8. The Business Model Canvas

  9. Developing a Model Business Model Canvas Video

  10. The 9 Building Blocks KEY ACTIVITIES KEY PARTNERS CUSTOMER SEGMENTS CUSTOMER RELATIONSHIPS KEY RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS VALUE PROPOSITION • Source: Osterwalder et al (2010)

  11. personal cash handling local dairy commuters music staff face to face sale of mugs business rates

  12. Tutorial

  13. Exercise 3.1: Smooth Juice • Thinking about everything we have learned so far; • Review the “Smooth Juice” case study. • What is the product’s “offering”? • Is it real, viable and worth the effort? • How could we improve the product “offering”?

  14. Exercise 3.2: Understanding the “offering” • Using the Business Model Canvas map out the business model for your ideal coffee shop.

  15. Same 9 components - 4 very different “offerings” Exercise 3.2: Understanding the “offering”

  16. BUSINESS MODEL CANVAS – CRITERIA FOR SUCCESS Key Activities Key Partners Value Proposition Customer Relationships Customer Segments FEASIBILITY • DESIRABILITY Key Resources Channels Cost Structure Revenue Streams • VIABILITY

  17. Building your own Business Model • Now using the Business Model Canvas can you map out your own Business Model for your business idea

  18. References Bygrave, W., & Zacharakis, A., (2014), “Entrepreneurship”, 3rd edition.New York: Wiley. Kaplan J.M. and Warren A.C., (2013), “Patterns of Entrepreneurship Management”, 4th Edition, Wiley. Osterwalder, A., Pigneur, Y., & Clark, T. (2010). “Business Model Generation: A handbook for visionaries, game changers, and challengers”. Hoboken, NJ: Wiley. Schaper, M., Volery, T., Weber, P., & Gibson, B. (2013). “Entrepreneurship and Small Business: 4th Asia Pacific Edition”. Milton Qld, Australia: Wiley.

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