Conducting feasibility studies with the Business Model Canvas

Felix Zappe02.05.202

3Conducting feasibility studies with the BMC| Edward de Bono Institute | University of Malta

Disclaimer

Conducting feasibility studies with the Business Model Canvas

by Felix Zappe

on 11th January 2017



Disclaimer

2

Building blocks of the Business Model Canvas and basic descriptions

Key PartnersThe network of suppliers and partners that make the business model work

Cost StructureAll costs incurred to operate a business model

Revenue StreamsThe cash a company generates from each CS (costs must be subtracted from revenues to create earnings)

Key ActivitiesThe most important things a company must do to make its business model workKey ResourcesThe most important assets required to make a business model work

Value PropositionDescribesthe bundle of products and services that create value for a specific Customer Segment

Customer RelationshipTypes of relation-ships a company establishes with specific CSChannelsHow does acompany commun-icate & reach its CS to deliver a VP

Customer SegmentsDefinesthe different groups of people or organizations anenterprise aims to reach and serve



Disclaimer

3

Logic of the BMC building blocks

Key PartnersThe network of suppliers and partners that make the business model work

Cost StructureAll costs incurred to operate a business model

Revenue StreamsThe cash a company generates from each CS (costs must be subtracted from revenues to create earnings)

Key ActivitiesThe most important things a company must do to make its business model workKey ResourcesThe most important assets required to make a business model work

Value PropositionDescribesthe bundle of products and services that create value for a specific Customer Segment

Customer RelationshipTypes of relation-ships a company establishes with specific CSChannelsHow does acompany commun-icate & reach its CS to deliver a VP

Customer SegmentsDefinesthe different groups of people or organizations anenterprise aims to reach and serve

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For whom?What is

offered?

3

4

How to reach them?

How to keep them?

5

For how much?

6

What is needed?

7

What needs to be done?

8

With whom?

How is it financed?

9



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4

Basic characteristics of the BMC building blocks

Key Partners

Cost Structure Revenue Streams

Key Activities

Key Resources

Value Proposition

Customer Relationship

Channels

Customer SegmentsKey Partners

- Reduction of risk and uncertainty

- Optimization and economy of scale

- Acquisition of particular resources & activities

Value Proposition- Newness- Performance- Customization- “Getting the

job done”- Design- Brand/status- Price- Cost

reduction- Risk reduction- Accessibility- Convenience /

usability

Customer Relations- Personal assistance- Dedicated personal assistance- Self-service- Automated service- Communities- Co-creation

Channels- Channel types

- Owned or from partners

- Direct or indirect

- Channel phase- Awareness- Evaluation- Purchase- Delivery- After sales

Customer Segments- Mass market- Niche market- Segmented- Diversified- Multi-sided

marketsKey Resources- Physical- Intellectual- Human- Fiancial

Key Activities- Production

- Problem solving

- Network /

platform

Revenue Streams- Asset sale- Usage fee- Subscription fee- Lending / leasing /

renting- Licensing- Advertising- Brokerage fees

Pricing mechanisms

- Fixed - List- Feature

dependent- Segment

dependent- Volume

dependent

- Dynamic- Negotiation- Yield

management- Real-time market

- Auctions

Cost Structure- Cost driven - Value driven

Characteristics

- Fixed costs- Variable cost- Economics of scale- Economics of scope



Disclaimer

5

Guiding questions of the BMC building blocks

Key Partners

Cost Structure Revenue Streams

Key Activities

Key Resources

Value Proposition

Customer Relationship

Channels

Customer SegmentsKey Partners

- Who are our key partners

- Who are our key suppliers

- Which key resources are we acquiring from partners?

- Which key activities do partners perform?

Value Proposition- What value do

we deliver to the customer?

- Which one of our customers problems are we helping to solve?

- What bundles of products and

services are we

offering to each

customer segment?

- Which customer needs are we satisfying?

Customer Relations- What type of relationship does each of our customer segments expect us to establish and maintain with them?- Which ones have we established?- How are they integrated with the rest of our business model?- How costly are they?Channels- Through which Channels do

our Customer Segments want

to be reached?- 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?

Key Activities- What key

activities do our

value propositions

require?- Our Distribution

Channels?

- Customer

Relationships?

- Revenue Streams?

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?

- How much does each revenue stream

contribute to overall revenues?

Cost Structure- What are the most important costs in inherent

in our business model?- Which key resources are most expensive?

- Which key activities are most expensive?

Key Resources- What key resources do our Value Propositions

require?- Our Distribution Channels? Customer Relationships?

- Revenue Streams?

Customer

Segments

- For whom

are we creating value?

- Who are our most

important

customers?



Disclaimer

Osterwalder, A., Pigneur, Y. & Clark, T. 2010. Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken, New Jersey: Wiley, John Wiley & Sons, Inc.

References