developing the business model
TRANSCRIPT
Developing the Business Model
NEW VENTURE PLANNING AND CREATION
• Unit 1 Module 1
• Prepared by Lystra Stephens-James, MBA
• Objectives 10,11 and 12
OBJECTIVES
• Explain the components of a business model
• Develop a business model for a business plan
• Identify the components of a business plan
CLASS ACTIVITY
• Discover the components of Google’s Business model• Divide the class in groups of two or three for the activity
listed below• Instructions:
– Each group are to examine slide five– Read the questions on slides six and seven and collaborate with
each other on their findings (allotted time 10 minutes)• Re-arrange the groups of two or three and let them share their
discovery with each other (allotted time 10 minutes)Teachers can use the students findings to explain the components of
a business model (including its role in developing a business plan)
Value Proposition Components
1. The product offering: What will make the product offered different from those of competitors?
2. Type of product: Will the product be standardized or
customized?
3. Distribution method: Will direct or indirect distribution be
used?
4. Manufacturing process: Internal manufacturing or
outsourcing?
(Google) Beneficiaries
1. Business to Business (B2B), Business to Consumer (B2C) or both?
2. Local, regional or international?
3. General or niche-market?
Considerations for Operations
• Internal capabilities of a business arising out of organizational structure
and/or culture
• Unique skills derived from previous experience, training or strategic hiring
• Technologies which allow the firm to be more efficient or effective
• Benefits from existing patents and developing products which can be
patented
• Resources which the firm might be able to acquire to its advantage.
Product Differentiation Strategies
1. Operational excellence2. Product quality3. Innovative leadership4. Cost Leadership5. Networks
Google Differentiation Strategy: Quality and Innovative Leadership
Growth Strategies1. Subsistence model: The entrepreneur’s focus is on
personal survival2. Income model: The entrepreneur’s focus is on enjoying
a lifestyle.3. Growth model: The entrepreneur’s focus is on a long-
term vision.4. Speculative model: This is a business where the
entrepreneur does not necessarily have a long-term plan.
Google: Greiner Growth Model
http://www.startup-book.com/2011/05/18/the-challenge-of-growth-23-google/
Business Plan
• Student Activity:• This exercise will give the student the opportunity to
listen to the views on (1) The importance of a business plan (2) Business Model Canvas Explained
• Students can view these as homework and teachers can develop questions for discussion in the classroom
• The links for students to download are– (a)www.youtube.com/watch?v+CBYFYh6AZw– (b)www.youtube.com/watch?=AO2MTLP5s