Business
model
designBusiness Model Basics
Business Model definition
• recent phenomenon
• linked to the rise of internet based services(but applicable not only for that)
• various definitions - some of them confusing
Business
model
designBusiness Model Basics
Business Model definition
The rationale of how an organisation creates, delivers and captures value
(Alexander Osterwalder)
Business
model
designBusiness Model Basics
Relationship with strategy
As „glue” between business strategy and processes, it is the translation of a company's strategy into a blueprint of the company's logic of earning money
Source: Alexander Osterwalder – the Business Model Ontology. A proposition in a
design sciene approach
Business
model
designBusiness Model Canvas
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
The Businesss Model consists of the above nine building blocks.
Source: Business Model Generation by Alexander Osterwalder & Ives Pigneur
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
one or several segments
users versus customers
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
product(s) and/or service(s)
same or different for various segments
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
personal / automated
communities – not only online
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
for communication, distribution or sales / after-sales (service)
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
Can be different types for different segments
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
What resources can make us better / different regarding our VP, CR, CH or RS?
Can be human, intellectual, tangible or financial
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
What activities can make us better / different regarding our VP, CR, CH or RS?
Manufacturing, service provisioning, some problem solving ability
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
Who provides our key resouces / activities
Business
model
designBM Canvas Building Blocks
Customer
Segments
Customer
Relationships
Channels
Value
Propositions
Key
Resources
Key Activities
Key
Partnerships
Cost Structure Revenue Streams
most imporant cost elements
possibility of reducing or avoiding costs
Business
model
designBusiness Model Canvas
Not a replacement of
marketing, business strategy, or other techniques, methods
It integrates the above or other previous business school knowledge
It can be useful with as part of the Lean Startupmethod.
Business
model
designExample: Waze
Value Prop.
1.Route and
traffic
information
2.Advertising
3.Beacons
Real-time data
Customers
1. a) Drivers,
travellers
b) Munici-
palities,
transportation
companies
c) media
2. Advertisers
3. Tunner
operators
Cust. Rel.
1. (mobile) web
based
community
2. CCP
Channels
1. Own web
page based
sales and
support
Key Partners
1.Drivers
2.CCP
3.Map editors
Revenues
1.Advertising fees
2.Beacon sales
Key Resources
1. Platform &
mobile apps
2. Live map
3. Brand
Key Activities
1. Platform / app
development
2. Community /
partnership
building
Costs
1.Platform operations
2.New product development?
3.No license for maps, traffic or other information
Synergies with Google are not considered here.CCP – Connected Citizen Program
Business
model
designBusiness Model Innovation
can come from any of the building blocks
• Customer driven
• Offer driven
• Resource driven
• Finance driven
Transformative Business Models
innovating several building blocks
Business
model
designBusiness Model Innovation
Customer driven: targeting previously unserved segments -m-pesa by Vodafone in Africa
Offer driven: new offer requiring the re-designing of thebusiness model - Lego Education
Resource driven: using existing resources for new productdevelopment - Amazon Web Services
Finance driven: new revenue streams, pricing mechanisms orreduced cost structure is the source of innovation - carsharing (Mercedes car2go, GreenGo)
Transformative – IKEA, Tesla
Business
model
designExample: Lego Education
Value Prop.
Various bricks,
theme sets inlc.
movie
characters, etc.
Customers
Families
(parents, kids)
Cust. Rel.Internet – Lego
Ideas community,
web games,
Mobile app –
Lego Life,
Legoland
ChannelsDistributors,
Shops, Web shop
Key Partners
Licensors,
Legoland,
Franchise
(Merlin
Entertainment)
Revenues
Product sales, Legoland
revenues
Key Resources
Brand, Licenses
(e.g. Star Wars)
Key Activities
Product Develop.,
Licensing,
Community Build.
Costs
Production, licensing, marketing
New offer (value proposition) drives the extendingof the business model
Lego bricks
plus software
based methods
for math,
science,
language and
computer
programming
Pre-school,
school, middle
school pupils
Teachers and
education
professionals
Specialised
distributors
(hdidakt)
Dedicated brand,
Complex products
Different PD methods,
engaging edu.
institutions
Funding sources
Teachers &
Professors
providing
feedback
Completely new product R&D related costs, dedicated
brand building / marketing Product sales, assisting funding
support
Trade shows, conferences, demo days
Business
model
designExample: Tesla
Value Prop.
High quality
electric car,
status symbol
Long battery
service time
Autonomous
driving features
Supercharger
network
Solar panels +
Powerball home
batteries
Customers
B2C:
• Drivers seeking
status symbol
• Early adopters
of e-car
technology
• Solar home
electricity users
B2B: car
manufacturers
Cust. Rel.
Web and blog inlc.
Posts by Elon Musk
Conventional
promotions (e.g.
test drives)
Channels
Online marketing
Showrooms
Key Partners
Key technology
suppliers, e.g.
autopilot, co-
operation with
Panasonic for
batteries
Governments &
regulators for
supporting and
subsidising e-car
usage
Revenues
1. Car and home solar system
sales (B2C)
2. Technology licensing (B2B)
Key Resources
Automotive R&D
Battery
manufacturing
Supercharger
network
Key Activities
Car design for
advanced technologies
Charger NW
maintenance
Educating customers
Costs
Battery & car R&D
Manufacturing
Operating Supercharging stations & Financing
Supercharging allowance to customers
Brand/Communication + Battery management + Supercharging + Industry co-operationWith the help of whateventure.com
Business
model
designHow To Create Business Models
• brainstorming
• „what if” questions
• using customer insights
Ideation
Business
model
designHow To Create Business Models
1. Sketch on canvas
2. Business Plan incl. financial modelling
3. Field TestPrototyping
Business
model
designAnalysis and Evaluation
SWOT
• Of the BM as a whole
• Of each building block
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