REVISITING YOUR BUSINESS MODELDr. Dawne Martin

MKTG 241

April 19, 2012

Build Your Business Model

• A Business Model Describes the rationale of how an organization creates, delivers and captures value

• Customer Segment – What market segments should be served?

• Value Proposition – What customer problems will be solved or needs to be satisfied?• Newness - Design• Performance - Brand/Status• Customization - Price• Getting the job done - Cost reductions• Risk reduction - Accessibility• Convenience/Usability

Adapted from: Alexander Osterwalder & Yves Pigneur, Business Model Generation, John Wiley & Sons, 2010.

Build Your Business Model• Channels – What value propositions are delivered to

customers through communications, distribution and sales channels? Awareness, Evaluation, Purchase, Delivery, After Sales• Sales Force - Web Sales• Own Stores - Partner Stores• Wholesalers

• Customer Relationship – How will you establish and maintain relationships with each customer segment?• Personal assistance - Dedicated personal assistance• Self-service - Automated services• Communities - Co-creation

Build Your Business Model

• Revenue Streams– How will revenue be generated from value propositions offered to customers?• Asset Sale - User fees• Subscription fees - Lending/renting• Licensing - Brokerage fees• Advertising

• Key Resources – What assets are required to offer & delivery previous elements?• Physical - Intellectual• Human - Financial

Build Your Business Model• Key Activities – What activities are required to create previous

elements?• Production - Problem solving• Platform/network

• Key Partnerships – What activities should be outsourced or acquired from outside the enterprise?• Optimization & economies of scale• Reduction of risk & uncertainty• Acquisition of particular resources & activities

• Cost Structure – What are the primary costs associated with your business model?• Cost driven - Value-driven• Fixed costs - Variable-costs• Economies of scale - Economies of scope

Key Partners

The Business Model Canvas:

Key Activities

Key Resources

Value Proposition

Customer Relationships

Customer Segments

Cost Structure Revenue Streams

Channels