Introduction to the Business Model Canvas
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This document introduces the Business Model Canvas tool, which uses nine building blocks to define a business model. The nine blocks are customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. The aim is to explore each block and how they work together to create and deliver value to customers. Testing assumptions with potential customers is recommended before building products or services.
Introduction to the Business Model Canvas
- 1. Welcome An Introduction to Business Model Canvas Catherine Duggan Wednesday 29 October 2014
- 2. About Me
- 3. Background: StartUp Sector 2013 •200 High Potential StartUps •350 Entrepreneurs developed their Business Plans 2014 •Government is focusing on creating more jobs through entrepreneurship and start-ups
- 4. Aim Aim: •To introduce the Business Model Canvas Tool Objectives: 1.Define a Business Model 2.Explore the 9 Building Blocks of the Business Model Canvas
- 5. Business Model Definition A business model describes the rationale of how an organisation creates, delivers, and captures value
- 7. A tool for: •Describing •Analyzing •Designing Business Model Source: Business Model Generation created by Alexander Osterwalder http://www.businessmodelgeneration.com/downloads/businessmodelgeneration_preview.pdf Business Model Canvas
- 8. Business Model Canvas Strategic business planning tool with 9 Building Blocks 1. Customer Segments 2. Value Proposition 3. Channels 4. Customer Relationships 5. Revenue Streams 6. Key Resources 7. Key Activities 8. Key Partnerships 9. Cost Structure
- 9. 1. Customer Segments For whom are we creating value? Who are our most important customers? •Mass Market •Niche Market •Segmented
- 11. 2. Value Proposition Tries to solve customer problem & satisfy their needs with value propositions. •What value do we deliver to the customer? •Which one of our customer’s problems are we helping to solve? •What bundles of products & services are we offering to each Customer Segment? •Which customer needs are we satisfying?
- 13. 3. Channels Value propositions are delivered to customers through communication, distribution, and sales channels. •How are we reaching them now? •How are our Channels integrated? •Which ones work best? •Which ones are most cost-efficient? •How are we integrating them with customer routines?
- 14. 3. Channels Phases Channel Phases 1. Awareness: How to raise awareness about our company’s products & services? 2. Evaluations: How to help customers evaluate our organisation's Value Proposition? 3. Purchase: How to allow customers to purchase specific products and services? 4. Delivery: How to deliver a Value Proposition to customers? 5. After sales: How to provide post-purchase customer support?
- 15. Branding
- 16. Branding
- 17. Branding
- 19. 4. Customer Relationships Customer relationships are established & maintained with each Customer Segment. •What type of relationship does each of our Customer Segments expect us to establish & maintain with them? •Which ones have we established? •How are they integrated with the rest of our business model? •How costly are they?
- 21. 5. Revenue Streams A result from value propositions successfully offered to customers. •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? •How much does each Revenue Stream contribute to overall revenues?
- 22. 5. Revenue Streams Types •Subscription Fees •Lending/Renting/Leasing •Licensing •Brokerage fees •Advertising
- 24. 6. Key Resources These are the assets required to provide •Distribution Channels •Customer Relationships Types Physical Intellectual (brand patents, copyrights, data) Human Financial
- 25. 6. Key Resources
- 26. 7. Key Activities What Key Activities do our Value Propositions require? •Our Distribution Channels? •Customer Relationships? •Revenue Streams? Categories •Production •Problem Solving •Platform/Network
- 27. Some activities are outsourced & some resources are acquired outside. •Who are our Key Partners? •Who are our Key Suppliers? •Which Key Resources are we acquiring from partners? •Which Key Activities do partners perform? Motivation Optimisation & economy Reduction of risk & uncertainty Acquisition of particular resources & activities 8. Key Partnerships
- 29. 9. Cost Structure The business model elements result in the cost structure •What are the most important costs? •Which Key Resources are most expensive? •Which Key Activities are most expensive? Is your business more? Cost Driven (leanest cost structure) Value Driven (focused on value creation) Sample characteristics Fixed Costs (salaries, rents, utilities) Variable costs
- 31. What next? • Test the guesses in the Building Model Canvas • Get out of the building and talk to customers * • Only when potential customers validate the idea, then build the product or service • Saves time & money • Or Pivot *Source: The Four Steps of the Epiphany by Steve Blank http://web.stanford.edu/group/e145/cgi-bin/winter/drupal/upload/handouts/Four_Steps.pdf
- 32. Summary Aim: • To introduce the Business Model Canvas Tool Objectives: 1. Define a Business Model 2. Explore the 9 Building Blocks of the Business Model Canvas
- 33. Additional Information YouTube Business Model Canvas Explained https://www.youtube.com/watch?v=QoAOzMTLP5s Business Model Canvas Tutorial Episodes 1 - 6 https://www.youtube.com/watch?v=wwShFsSFb-Y https://www.youtube.com/watch?v=wlKP-BaC0jA https://www.youtube.com/watch?v=iA5MVUNkSkM https://www.youtube.com/watch?v=7O36YBn9x_4 https://www.youtube.com/watch?v=-2gd_vhNYT4 https://www.youtube.com/watch?v=SshglHDKQCc Catherine Duggan: gmail: duggancatherine56@gmail.com Linkedin: ie.linkedin.com/pub/catherine-kearns/40/b4a/126/
- 34. Conclusion Thank you for your attention Questions & Answers
Editor's Notes
- #19: Branding burns the product or service into the customer/clients psyche.