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Business Modeling: The Link between Idea and
Business Plan
© 2018, LeonTyler, llc
AGENDA
Importance of Business ModelingBusiness Model Canvas
Application of Business Canvas
Why Businesses Fail?Lack of Planning
Research:OpportunityCustomersCompetitors
Outcomes/Objectives Strategies Tactics
50%50%SucceedFail
50% of New Businesses Fail
Planning is a Process
PLANNING PROCESS
Outcomes Strategies Tactics
Arrival DateArrival Time
AirlineDirect/Connecting
Transportation to AirportTransportation from Airport
Etc.
PLANNING PROCESS
Outcome Strategies Tactics
Bus i ness M ode l 1
1 SOURCE: Osterwalder, Alexander & Pigneur, Yves, Business Model Generation, 2010, John Wiley & Sons, Inc.
BUSINESS MODEL
BUSINESS MODEL
BUSINESS MODEL
All who need or use
Market SegmentSubset of Mass Market
Mass Market
Niche Market
CUSTOMER SEGMENTS
BUSINESS MODEL
All who need or use
Market SegmentCommon PerformanceCommon PainsCommon Gains
Mass Market
Niche Market
CUSTOMER SEGMENTS
BUSINESS MODEL
Separate Segments if Require:Different Value PropositionsDifferent Distribution ChannelsDifferent Types of RelationshipsDifferent Levels of Profitability
CUSTOMER SEGMENTS
Consistent depth & circumferenceClean edgesNo splintersDurabilityLongevity
circumferenceClean edgesNo splintersDurabilityProduct Benefits
Benefits vs. Features
BUSINESS MODEL
BUSINESS MODEL
VALUE PROPOSITION
Benefits
BenefitsFeatures
Features
SOURCE: Business Model Generation
Carbon fiber alloyPrecision milling
Stringent quality control
Carbon fiber alloyPrecision milling
Stringent quality controlProduct FeaturesConsistent depth &
circumferenceClean edgesNo splintersDurabilityLongevity
Consistent depth & circumference
Product Benefits
Benefits vs. Features
VALUE PROPOSITIONBundle
Product(s)Benefits ® Features
StandardOptions
ServicesPre-purchase SupportPurchase SupportPost-purchase Support
VALUE PROPOSITIONPromise
Category Membership RequirementsPoint of Difference
Valued by TargetCredible for BrandDeliverable by Product/Service
VALUE PROPOSITIONPromisesBrand
“A name, term, sign, symbol, or design, or a combination of them, intended to
identify goods and services of one seller or a group of sellers and to differentiate
them from those of competition”American Marketing Association
VALUE PROPOSITIONPromisesBrandPricing
BUSINESS MODEL
CHANNELS
Raise AwarenessInformFacilitate PurchaseDeliverProvide Support
CHANNEL TYPES
Sales Force
Web Sales
Own Stores
Partner Stores
Whole-salers
Direct IndirectOwn Partners
CHANNELS
BUSINESS MODELUSINESS MODEL
Customer Acquisition
Customer Retention
Boosting Sales
CUSTOMER RELATIONSHIPS
Personal Automated
Categories of Customer RelationshipsPersonal AssistanceDedicated Customer AssistanceSelf-serviceAutomated ServicesCommunitiesCo-creation
CUSTOMER RELATIONSHIPS
BUSINESS MODELUSINESS MODEL
Two TypesTransaction Revenues
One-time Customer PaymentsRecurring Revenues
On-going PaymentsPost-purchase Customer Support
REVENUE STREAMS
Ways to GenerateAsset SaleUsage FeeSubscription FeesLending/Renting/LeasingLicensingBrokerage FeesAdvertising
REVENUE STREAMS
Pricing Mechanisms
REVENUE STREAMS
Fixed Menu Pricing Dynamic Pricing
List Price
Feature Dependent
Segment Dependent
Volume Dependent
Negotiation
Yield Management
Real-time-market
Auctions
BUSINESS MODEL
Allow to: Create/Offer Value PropositionReach MarketsMaintain RelationshipsEarn Revenues
KEY RESOURCES
Physical Resources
Intellectual Recourses
Human Resources
Financial Resources
KEY RESOURCES
BUSINESS MODEL
Production Activities
Problem Solving Activities
Platform/Network Activities
KEY ACTIVITIES
BUSINESS MODEL
Types of PartnershipsStrategic Alliances
Coopetition
Joint Ventures
Buyer-supplier Relationships
KEY PARTNERS
Optimize Business Model
Reduce Risks
Acquire Resources
KEY PARTNERS
BUSINESS MODEL
Cost-driven StructuresLow-price Value PropositionsMaximum AutomationExtensive Outsourcing
Value-driven StructuresPremium Value PropositionsHigh Degrees of Personalization
COST STRUCTURE
Cost Structures Include:
Fixed Costs
Variable Costs
Economies of Scale
Economies of Scope
COST STRUCTURE
Source: Business Model Generation
BUSINESS MODEL
BUSINESS MODEL
BUSINESS MODEL
LEARN MORE
https://strategyzer.com/V I S I T
Osterwalder, Alexander & Pigneur, Yves, Business Model Generation, 2010, John Wiley & Sons, Ins.
Osterwalder, Pigneur,, Bernarda & Smith, Value Proposition Design, 2014, John Wiley & Sons, Ins.
