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IBA-Business Model Canvas for Small Scale Startups

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This document discusses the key elements of a business model canvas, which is a tool used to describe and design business models. It outlines the 9 building blocks that make up the business model canvas: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. Each block represents an important aspect of how a business operates and is defined in 1-2 paragraphs. The canvas provides a structured way to visualize and discuss business models by mapping out these different elements.

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Entrepreneurship The Journey of Creating and Innovating
_definition of a business model _9 building blocks _the business model canvas
_definition of a business model _9 building blocks _the business model canvas
_business model definition A business model describes the rationale of how an organisation creates, delivers, and captures value.
_definition of a business model _9 building blocks _the business model canvas
_9 building blocks key resources Key resources are the assets required to offer and deliver the previously described elements... key activities ...by performing a number of Key Activities. key partners Some activities are outsourced and some resources are acquired outside the enterprise. revenue streams 5 customer relationships 4 channels 3 value proposition 2 1 customer segments Revenue streams result Customer relationships Valuepropositions It seeks to solve An organisation from value propositions are established and are delivered to customer problems serves one or several successfully offered to maintained with each customers through and satisfy customer Customer Segments. customers. Customer Segment. communication, needs with value distribution, and sales propositions. Channels. 6 7 8 9 cost structure The business model elements result in the cost structure.
_9 building blocks
Customer Segments 1 The Customer Segments Building Block defines the different groups of people or organisations an enterprise aims to reach and serve Customers comprise the heart of any business model. Without (profitable) customers, no company can survive for long. In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviours, or other attributes. A business model may define one or several large or small Customer Segments. An organisation must make a conscious decision about which segments to serve and which segments to ignore. Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs. Customer groups represent separate segments if: • Their needs require and justify a distinct offer • They are reached through different Distribution Channel • They require different types of relationships • They have substantially different profitabilities • They are willing to pay for different aspects of the offer
Value Propositions 2 The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment The Value Proposition is the reason why customers turn to one company over another. It solves a customer problem or satisfies a customer need. Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment. In this sense, the Value Proposition is an aggregation, or bundle, of benefits that a company offers customers. Some Value Propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes.
Channels 3 The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition Communication, distribution, and sales Channels comprise a company's interface with customers. Channels are customer touch points that play an important role in the customer experience. Channels serve several functions, including: • Raising awareness among customers about a company’s products and services • Helping customers evaluate a company’s Value Proposition • Allowing customers to purchase specific products and services • Delivering a Value Proposition to customers • Providing post-purchase customer support
Customer Relationships 4 The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments A company should clarify the type of relationship it wants to establish with each Customer Segment. Relationships can range from personal to automated. Customer relationships may be driven by the following motivations: • Customer acquisition • Customer retention • Boosting sales (upselling) In the early days, for example, mobile network operator Customer Relationships were driven by aggressive acquisition strategies involving free mobile phones. When the market became saturated, operators switched to focusing on customer retention and increasing average revenue per customer. The Customer Relationships called for by a company’s business model deeply influence the overall customer experience.
Revenue Streams 5 The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings) If customers comprise the heart of a business model, Revenue Streams are its arteries. A company must ask itself, For what value is each Customer Segment truly willing to pay? Successfully answering that question allows the firm to generate one or more Revenue Streams from each Customer Segment. Each Revenue Stream may have different pricing mechanisms, such as fixed list prices, bargaining, auctioning, market dependent, volume dependent, or yield management. A business model can involve two different types of Revenue Streams: • Transaction revenues resulting from one-time customer payments • Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support
Key Resources 6 The Key Resources Building Block describes the most important assets required to make a business model work Every business model requires Key Resources. These resources allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Different Key Resources are needed depending on the type of business model. A microchip manufacturer requires capital-intensive production facilities, whereas a microchip designer focuses more on human resources. Key resources can be physical, financial, intellectual, or human. Key resources can be owned or leased by the company or acquired from key partners.
Key Activities 7 The Key Activities Building Block describes the most important things a company must do to make its business model work Every business model calls for a number of Key Activities. These are the most important actions a company must take to operate successfully. Like Key Resources, they are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues. And like Key Resources, Key Activities differ depending on business model type. For software maker Microsoft, Key Activities include software development. For PC manufacturer Dell, Key Activities include supply chain management. For consultancy McKinsey, Key Activities include problem solving.
Key Partners 8 The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work Companies forge partnerships for many reasons, and partnerships are becoming a cornerstone of many business models. Companies create alliances to optimize their business models, reduce risk, or acquire resources. We can distinguish between four different types of partnerships: Strategic alliances between non-competitors • • Coopetition: strategic partnerships between competitors • Joint ventures to develop new businesses • Buyer-supplier relationships to assure reliable supplies
Cost Structure 9 The Cost Structure describes all costs incurred to operate a business model This building block describes the most important costs incurred while operating under a particular business model. Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs. Such costs can be calculated relatively easily after defining Key Resources, Key Activities, and Key Partnerships. Some business models, though, are more cost-driven than others. So-called “no frills” airlines, for instance, have built business models entirely around low Cost Structures.
IBA-Business Model Canvas for Small Scale Startups
IBA-Business Model Canvas for Small Scale Startups
IBA-Business Model Canvas for Small Scale Startups
_definition of a business model _9 building blocks _the business model canvas
_the business model canvas This tool resembles a painter’s canvas — pre- formatted with the nine blocks — which will allow us to paint pictures of new or existing business models. The Business Model Canvas works best when printed out on a large surface so groups of people can jointly start sketching and discussing business model elements with Post- it® notes or board markers. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis.
IBA-Business Model Canvas for Small Scale Startups

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IBA-Business Model Canvas for Small Scale Startups

  • 1. Entrepreneurship The Journey of Creating and Innovating
  • 2. _definition of a business model _9 building blocks _the business model canvas
  • 3. _definition of a business model _9 building blocks _the business model canvas
  • 4. _business model definition A business model describes the rationale of how an organisation creates, delivers, and captures value.
  • 5. _definition of a business model _9 building blocks _the business model canvas
  • 6. _9 building blocks key resources Key resources are the assets required to offer and deliver the previously described elements... key activities ...by performing a number of Key Activities. key partners Some activities are outsourced and some resources are acquired outside the enterprise. revenue streams 5 customer relationships 4 channels 3 value proposition 2 1 customer segments Revenue streams result Customer relationships Valuepropositions It seeks to solve An organisation from value propositions are established and are delivered to customer problems serves one or several successfully offered to maintained with each customers through and satisfy customer Customer Segments. customers. Customer Segment. communication, needs with value distribution, and sales propositions. Channels. 6 7 8 9 cost structure The business model elements result in the cost structure.
  • 8. Customer Segments 1 The Customer Segments Building Block defines the different groups of people or organisations an enterprise aims to reach and serve Customers comprise the heart of any business model. Without (profitable) customers, no company can survive for long. In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviours, or other attributes. A business model may define one or several large or small Customer Segments. An organisation must make a conscious decision about which segments to serve and which segments to ignore. Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs. Customer groups represent separate segments if: • Their needs require and justify a distinct offer • They are reached through different Distribution Channel • They require different types of relationships • They have substantially different profitabilities • They are willing to pay for different aspects of the offer
  • 9. Value Propositions 2 The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment The Value Proposition is the reason why customers turn to one company over another. It solves a customer problem or satisfies a customer need. Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment. In this sense, the Value Proposition is an aggregation, or bundle, of benefits that a company offers customers. Some Value Propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes.
  • 10. Channels 3 The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition Communication, distribution, and sales Channels comprise a company's interface with customers. Channels are customer touch points that play an important role in the customer experience. Channels serve several functions, including: • Raising awareness among customers about a company’s products and services • Helping customers evaluate a company’s Value Proposition • Allowing customers to purchase specific products and services • Delivering a Value Proposition to customers • Providing post-purchase customer support
  • 11. Customer Relationships 4 The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments A company should clarify the type of relationship it wants to establish with each Customer Segment. Relationships can range from personal to automated. Customer relationships may be driven by the following motivations: • Customer acquisition • Customer retention • Boosting sales (upselling) In the early days, for example, mobile network operator Customer Relationships were driven by aggressive acquisition strategies involving free mobile phones. When the market became saturated, operators switched to focusing on customer retention and increasing average revenue per customer. The Customer Relationships called for by a company’s business model deeply influence the overall customer experience.
  • 12. Revenue Streams 5 The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings) If customers comprise the heart of a business model, Revenue Streams are its arteries. A company must ask itself, For what value is each Customer Segment truly willing to pay? Successfully answering that question allows the firm to generate one or more Revenue Streams from each Customer Segment. Each Revenue Stream may have different pricing mechanisms, such as fixed list prices, bargaining, auctioning, market dependent, volume dependent, or yield management. A business model can involve two different types of Revenue Streams: • Transaction revenues resulting from one-time customer payments • Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support
  • 13. Key Resources 6 The Key Resources Building Block describes the most important assets required to make a business model work Every business model requires Key Resources. These resources allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Different Key Resources are needed depending on the type of business model. A microchip manufacturer requires capital-intensive production facilities, whereas a microchip designer focuses more on human resources. Key resources can be physical, financial, intellectual, or human. Key resources can be owned or leased by the company or acquired from key partners.
  • 14. Key Activities 7 The Key Activities Building Block describes the most important things a company must do to make its business model work Every business model calls for a number of Key Activities. These are the most important actions a company must take to operate successfully. Like Key Resources, they are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues. And like Key Resources, Key Activities differ depending on business model type. For software maker Microsoft, Key Activities include software development. For PC manufacturer Dell, Key Activities include supply chain management. For consultancy McKinsey, Key Activities include problem solving.
  • 15. Key Partners 8 The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work Companies forge partnerships for many reasons, and partnerships are becoming a cornerstone of many business models. Companies create alliances to optimize their business models, reduce risk, or acquire resources. We can distinguish between four different types of partnerships: Strategic alliances between non-competitors • • Coopetition: strategic partnerships between competitors • Joint ventures to develop new businesses • Buyer-supplier relationships to assure reliable supplies
  • 16. Cost Structure 9 The Cost Structure describes all costs incurred to operate a business model This building block describes the most important costs incurred while operating under a particular business model. Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs. Such costs can be calculated relatively easily after defining Key Resources, Key Activities, and Key Partnerships. Some business models, though, are more cost-driven than others. So-called “no frills” airlines, for instance, have built business models entirely around low Cost Structures.
  • 20. _definition of a business model _9 building blocks _the business model canvas
  • 21. _the business model canvas This tool resembles a painter’s canvas — pre- formatted with the nine blocks — which will allow us to paint pictures of new or existing business models. The Business Model Canvas works best when printed out on a large surface so groups of people can jointly start sketching and discussing business model elements with Post- it® notes or board markers. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis.