Business Model - PPT SLIDES.ppt
- 1. SCHOOL OF MANAGEMENT STUDIES I MBA – (2020-2022 BATCH) SEMESTER - I COURSE CODE – SBAA5105 COURSE NAME – ENTREPRENEURSHIP AND BUSINESS VENTURING
- 2. INTRODUCTION ABOUT COURSE UNIT 1 - INTRODUCTION ABOUT ENTREPRENEURSHIP UNIT 2 - BUSINESS PLANNING PROCESS UNIT3 - CRAFTING BUSINESS MODELS AND LEAN START – UPS UNIT 4 - BUSINESS VENTURING UNIT 5 - ENTREPRENEURSHIP DEVELOPMENT
- 3. UNIT – III TOPICS TO BE COVERED • BUSINESS MODELS • VALUE PROPOSITIONS • VALUE INNOVATION • LEAN MANAGEMENT • START UPs
- 4. BUSINESS MODEL – MEANING • A set of planned activities designed to result in a profit in a market place. • A business model is the method of doing business by which a company can sustain itself that is, generate revenue. • The business model spells out how a company makes money by specifying its position in the value chain.
- 5. KEY INGREDIENTS OF A BUSINESS MODEL
- 6. DEFINITION According to management guru Peter Drucker: “a business model is supposed to answer who your customer is, what value you can create/add for the customer and how you can do that at reasonable costs”. Thus a business model is a description of the rationale of how a company creates, delivers and captures value for itself as well as the customer.
- 7. VALUE PROPOSITION – CONCEPT • A value proposition refers to the value a company promises to deliver to customers • A value proposition is also a declaration of intent or a statement that introduces a company's brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business.
- 8. ELEMENTS OF THE VALUE PROPOSITION • Newness • Performance • Customization • Getting the job done • Design • Brand/ Status • Price • Cost Reduction • Risk Reduction • Accessibility • Convenience/ Usability
- 9. DESIGNING A VALUE PROPOSITION
- 10. STEPS FOR USING THE VALUE PROPOSITION FRAMEWORK EFFECTIVELY AND EFFICIENTLY 1. Jot down all the products and services in the portfolio which combine to make up your value proposition. 2. Describe how the value proposition contributes to eliminate the targeted customer’s pain points. 3. Describe how the value proposition contributes a positive result for the targeted customer. 4. Ultimately all three elements; products and services, pain relievers and gain creators should be ranked according to their relative importance to the targeted customer.
- 11. VALUE INNOVATION: THE STRATEGIC LOGIC OF HIGH GROWTH • After five-years analyzing high-growth companies and their competitors, W.Chan Kim and Renee Mauborgne found that the main difference between successful companies and their rivals was in their fundamental assumptions about strategy. • While the majority companies focus their efforts in how to beat competitors (head-to-head competition), high-growth companies paid little attention to it. That strategic logic is called value innovation.
- 12. Conventional Logic Versus Value Innovation TWO TYPES OF STRATEGIC LOGIC Five dimensions of strategy Conventional Logic Value Innovation Logic Industry Assumptions Industry's conditions are given Industry's conditions can be shaped Strategic focus A company should build competitive advantages. The aim is to beat the competition The competitions is not the benchmark. A company should pursue a quantum leap in value to dominate the market Customers A company should retain and expand its customer base through further segmentation and customization A value innovator targets the mass of buyers and willingly lets some existing customers to go Assets & capabilities A company should leverage its existing assets and capabilities A company must not be constrained by what it already has Products & service offerings An industry's traditional boundaries determine the products and services a company offers A value innovator thinks in terms of the total solution customers seek, even if that takes the company beyond its industry's traditional offerings
- 13. CUSTOMER FOCUSED INNOVATION • Lindic & Marques believed that Value Proposition is a significant catalyst for customer focused innovation. • Lindic has developed a PERFA framework to evaluate this concept of value proposition in regards to innovation. • Performance (P), Ease of use (E), Reliability (R), Flexibility (F), and Affectivity (A). • A value-focused approach requires managers to rethink their perspective on innovation by placing themselves in the customer's shoes.
- 14. Business Model Innovation When an organization creates a new business model, the process is called Business model innovation. • Business Model Innovation comprise - the development of entirely new business models, the diversification into additional business models, the acquisition of new business models the transformation from one business model to another. • The transformation can affect - the entire business model or individual or a combination of its value proposition, value creation and deliver, and value capture elements, the interrelations between the elements, and the value network. • Frequent and successful business model innovation can – increase an organization's resilience to changes in its environment thus it can become a competitive advantage.
- 16. BUSINESS MODEL CANVAS • A strategic management and lean start up template for developing new or documenting existing business models. • It is a visual chart with elements describing a firm's or product's value proposition, infrastructure, customers, and finances.
- 18. LEAN START UP - CONCEPT • A methodology for developing businesses and products that aims to shorten product development cycles and rapidly discover if a proposed business model is viable. • This is achieved by adopting a combination of business - hypothesis - driven experimentation, iterative product releases, and validated learning. • This methodology is the assumption that when start up companies invest their time into iteratively building products or services to meet the needs of early customers, the company can reduce market risks and sidestep the need for large amounts of initial project funding and expensive product launches and failures. • Seeks to eliminate wasteful practices and increase value - producing practices during the earliest phases of a company. • Customer feedback during the development of products or services is integral to the lean start up process, and ensures that the company does not invest time in designing features or services that consumers do not want. • This is done primarily through two processes, using key performance indicators and a continuous deployment process.
- 20. BUSINESS PITCHING • A Business Pitch is a presentation of a business idea to potential investors. • People pitch a business because they need resources. If the goal is to raise start up cash, the target of the pitch is an investor. • Other businesses pitch to potential customers to sell their product. • “The purpose of a pitch is to stimulate interest, not to close a deal.” • A business pitch is a presentation. It includes a deck of slides that serve as a presentation aid and background, and the verbal discussion that begins as a planned talk and ends with questions and answers.
- 21. PAY ATTENTION TO DETAILS Once you've started off your business pitch with a brief overview of your business idea, it’s time to flesh out the details. You want to get across the reasons investors should to buy in; for example, what benefits will investors receive if they provide the necessary capital? Your business pitch might include the following: • Industry analysis • Customer needs • Marketing strategy • Business model • Overview of the competition • Risks • Implementation plan • Financial projection • Financial needs
- 22. THANK YOU