Business Model Canvas

1. BUSINESS MODEL CANVAS Innovate, Iterate, Elevate © Operational Excellence Consulting. All rights reserved.

2. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg LEARNING OBJECTIVES Understand the key concepts of business model thinking and gain knowledge of the 9 building blocks of the Business Model Canvas. Learn how to apply the Business Model Canvas to map out your current business model for understanding and analysis. Gain basic knowledge of the Business Model design process and related frameworks. 2 © Operational Excellence Consulting

3. CONTENTS 1 5 Introduction to Business Model Thinking The Value Proposition Canvas 2 6 Basics of Design Thinking Business Model Design Process 3 7 Presenting the Business Model Canvas The 9 Building Blocks 4 The Business Model Canvas 3 © Operational Excellence Consulting

4. Business Model Canvas A shared language for describing, visualizing, assessing, and changing business models 4

5. “ more often than not would make the difference between success and failure.” While product innovation and process innovation are important aspects in entrepreneurship, having the right business model YVES PIGNEUR 5 © Operational Excellence Consulting

6. DEFINITION OF BUSINESS MODEL “A business model describes the rationale of how an organization creates, delivers, and captures value.” 6 Source: Strategyzer © Operational Excellence Consulting

7. THE BUSINESS MODEL CANVAS IS A VISUAL TOOL A visual representation of the various elements of your business model ● The canvas allows you to: ● see the relationships among the parts of your model o identify hypothesis, assumptions and risks o plan validation testing (market, channels, pricing) o find ways to add value or reduce cost o brainstorm market disruption strategies o 7 © Operational Excellence Consulting

8. THE BUSINESS MODEL CANVAS IS A STRATEGIC MANAGEMENT FRAMEWORK FOR DEVELOPING BUSINESS MODELS Key Customer Relationships Activities Customer Segments Value Key Proposition Partners Key Channels Resources Cost Structure Revenue Streams 8 Source: Strategyzer © Operational Excellence Consulting

9. INTEGRATED SUITE OF TOOLS Zoom out The Business Model Canvas is a crucial component of an Integrated Suite of Tools, which includes the Value Proposition Canvas and the Environmental Map. This suite offers a comprehensive framework for organizations to holistically analyze and refine their business strategies. ENVIRONMENTAL MAP BUSINESS MODEL CANVAS The Business Model Canvas focuses on systematically defining and optimizing the entire structure of a company’s business model, encompassing all key aspects necessary to create, deliver, and capture value in the market. Zoom in VALUE PROPOSITION CANVAS 9 © Operational Excellence Consulting

10. CREATE VALUE FOR YOUR CUSTOMER AND YOUR BUSINESS To sustainably create value for your customer, you need to create value for your business. To create value for your business, you need to create value for your customer. A business that generates fewer revenues than it incurs costs will inevitably disappear, even with the most successful value proposition. 10 © Operational Excellence Consulting

11. APPLICATIONS OF THE BUSINESS MODEL CANVAS 1. Strategizing 8. Organizational alignment 2. Dashboard 9. Strategy diffusion and co-creation 3. Understanding competition 10. Shared language across functions 4. Portfolio of business models 11. Aligning value side (revenue) and infrastructure side (costs) 5. Innovation 12. Investing 6. New idea template 13. Mergers and acquisitions 7. Understanding customers 14. Exit strategies 11 © Operational Excellence Consulting

12. “ to become designers.” Business people don’t just need to understand designers better; they need ROGER MARTIN DEAN, ROTMAN SCHOOL OF MANAGEMENT 12 © Operational Excellence Consulting

13. BUILDING BUSINESS MODELS ON CUSTOMER INSIGHTS Adopting the customer perspective is a guiding principle for the entire business model design process. Customer perspectives should inform our choices regarding Value Propositions, Distribution Channels, Customer Relationships and Revenue Streams. 13 Source: Adapted from Strategyzer © Operational Excellence Consulting

14. SHIFTING YOUR PERPECTIVE: FROM ORGANIZATION-CENTRIC TO CUSTOMER-CENTRIC THEM Customer-centric business model design YOU Organization-centric business model design What jobs do our customer need to get done and how can we help? What are our customer’s aspirations and how can we help him live up to them? What can we sell customers? How can we reach customers most efficiently? How do our customers prefer to be addressed? How do we, as an enterprise, best fit into their routines? What relationships do we need to establish with customers? What relationship do our customers expect us to establish with them? How can we make money from the customers? For what value(s) are customers truly willing to pay? 14 Source: Adapted from Strategyzer © Operational Excellence Consulting

15. THE BUSINESS MODEL CANVAS IS BASED ON THE THREE LENSES OF HUMAN-CENTERED DESIGN Business Model Canvas KP KA VP CR CS FEASIBILITY DESIRABILITY KR CH Can we deliver it? Do customers want it? C$ R$ VIABILITY Is it capable of producing a profit? 15 © Operational Excellence Consulting

16. THE 9 BUILDING BLOCKS Business Model Canvas 2 3 1 Value Channels Customer Segments Propositions Value propositions are delivered to customers through communication, distribution and and sales Channels. It seeks to solve customer problems and satisfy customer needs with value propositions. An organization serves one or several Customer Segments. 16 © Operational Excellence Consulting

17. 2. VALUE PROPOSITIONS The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment Key Questions: Key Points: § A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs § What do we deliver to the customer? § Which one of our customer’s problems are we helping to solve? § Values may be quantitative (e.g. price, speed of service) or qualitative (e.g. design, customer experience) § What bundles of products and services are we offering to each Customer Segment? § Elements that contribute to customer value creation: Newness, Performance, Customization, “Getting the job done”, Design, Brand/Status, Price, Cost Reduction, Accessibility, Risk Reduction, Convenience/Usability § Which customer needs are we satisfying? 17 © Operational Excellence Consulting

18. STARBUCKS BUSINESS MODEL KP KA VP CR CS Starbucks Rewards Marketing Unique Coffee Co-created with Customers Starbucks Reserve Coffee Aficionados R&D Coffee Growers Supply Chain Management Starbucks App Third Place between the Home and Office Mobile Professionals Specialized Coffee M/C Makers KR CH People Retail stores Students A Place to Hangout with Friends, Do Homework Brand Store Design Packaging & Bottling Plants C$ R$ Marketing & R&D People Costs Retail Sales Retail Sales Retail Sales Coffee & Milk Rent 18 © Operational Excellence Consulting

19. UBER BUSINESS MODEL KP KA VP CR CS Web and mobile app development Drivers who own cars Automation (where possible) Taxi on demand Marketing activities Investors Cash free Social media Passengers Drivers recruitment Payment processors Easy to order cab & short wait time KR CH Mobile app Drivers Web and mobile app Mapping data providers Passengers on demand Social media Software engineers (pricing & routing) Easy to make additional money Local regulators PR C$ R$ Web and mobile app development Sales & marketing Pay per ride charges Premium Uber brands (e.g. UberX) Surge pricing Driver payments Salaries 19 © Operational Excellence Consulting

20. GROUP WORKSHOP 1 ACTION! Time allowed: 30 mins 1. Assemble in teams. 2. Create your current state canvas. 3. Write key words on sticky notes. 4. Place sticky notes on the canvas. 5. Present your canvas. 20 © Operational Excellence Consulting

21. You need to validate your business model assumptions with the customers until you get it right. 21 © Operational Excellence Consulting

22. THE BUINSESS MODEL CANVAS IS A TOOL TO ALIGN ACTIVITIES TO CREATE VALUE FOR CUSTOMERS KP KA VP CR CS KR CH C$ R$ 22 Source: Adapted from Strategyzer, 2014 © Operational Excellence Consulting

23. ROLE OF VALUE PROPOSITION DESIGNER – DETERMINE THE BEST FIT BETWEEN THE VALUE PROPOSITION & CUSTOMER NEEDS Key Partners Customer Segments Key Activities Value Proposition Customer Relationships Key Resources Channels BUSINESS MODEL CANVAS + Cost Structure Revenue Streams VALUE PROPOSITION DESIGNER VALUE PROPOSITION CUSTOMER SEGMENT 23 Source: Adapted from Strategyzer, 2014 © Operational Excellence Consulting

24. “ options and we just have to discover all of them.” There’s not a single business model… There are really a lot of opportunities and a lot of TIM O’REILLY 24 © Operational Excellence Consulting

25. 4 DESIGN STRATEGIES Blue Ocean Strategy Perspective Business Model Environment SWOT Analysis Managing Multiple Business Models 25 Source: Adapted from Strategyzer © Operational Excellence Consulting

26. BUSINESS MODEL DESIGN PROCESS STARTING POINT FOR BUSINESS MODEL INNOVATION Business Model Design & Innovation Factors Specific to Established Organizations 26 © Operational Excellence Consulting

27. BUSINESS MODEL DESIGN & INNOVATION Objective Description Examples Satisfy market Fulfill an unanswered market need Tata car, NetJets, GrameenBank, Lulu.com Bring to market Bring a new technology, product or service to market or exploit an existing intellectual property Xerox 914, Swatch, Nespresso, Red Hat Improve market Improve or disrupt an existing market Dell, EFG Bank, Nintendo Wii, IKEA, Skype, Ryanair, Amazon.com retail Create market Create an entirely new type of business Diners Club, Google 27 © Operational Excellence Consulting

28. 5 PHASES OF BUSINESS MODEL DESIGN OBJECTIVE Mobilize Prepare for a successful business model design project. § Research and analyze elements needed for the business model design project. § Understand Generate and test viable business model options, and select the best. § Design Implement Implement the business model prototype in the field. § Adapt and modify the business model in response to market reaction. § Manage 28 © Operational Excellence Consulting

29. PRESENTING THE BUSINESS MODEL CANVAS – DON’TS 1. Commit cognitive murder – showing the entire canvas all at once 5. Orphan elements – elements that have no connection to other elements (e.g. a revenue stream without a customer who is paying for a value proposition) 2. Too much granularity and detail 3. Too many ideas in one canvas 6. Mixing present and future state 4. “Filling out” each box one after another like a checklist 7. Gives in to the urge to blah blah blah 29 © Operational Excellence Consulting

30. ABOUT OPERATIONAL EXCELLENCE CONSULTING Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg © Operational Excellence Consulting