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Business Models

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beth carroll

on 28 January 2016

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Transcript of Business Models

Chapter 4
Business Models
What is your distinct Value Proposition?

Who are your customer segments? Single or multi-sided?

How will you interact with your customers?

Where are your revenue streams? How much revenue do you anticipate?

What is your cost structure? Start-up costs and ongoing fixed and variable costs?
Your Team’s Business Concept

Their customer segments

Their Value Proposition

Customer Relationships
Revenue Stream

Describe what is unique about:
Team 2

Team 4

Team 6

Team 8
Team 1

Team 3
Jimmy Johns

Team 5

Team 7

What is their distinct Value Proposition?
Does my business make sense?

Will my customers, suppliers, & employees want to participate with this business idea?

How motivated will they be to help my business become successful?

How distinct will my business be compared to my competition? Easy to duplicate?
Evaluating the Business Model

Business Models over the years:
The subscription business model
The razor and blades business model
The pyramid scheme business model
The monopolistic business model
The auction business model
The Brick and Mortar business model
The Bricks and Clicks business model
The One for One business model
Value to the customer

What is
to the consumer?

sustainable competitive advantage
is achieved by implementing a
value-creating strategy
that is unique and not easy to imitate.
Core Strategy
The first component of a business model is the core strategy, which describes
how a firm competes relative to its competitors.
Customer Relationships
A business model describes:

1. The Value Proposition: How our business Solves problems and Satisfies customer needs.
2. The customer segments
(one or several)
3. & 4. How to reach, keep and grow our customers
(customer relationships and channels)

8. & 9. How it makes money
Revenue streams & Cost structure
Timing of Business Model:

The development of a firm’s business model works hand in hand with the feasibility analysis stage of launching a new venture

and usually comes before writing a business plan.
Business Models
Describes how all the elements of a business fit
together and constitute a working whole.
A business model
Subscription business model
There is no standard business model for an industry or for a target market within an industry.

There are always opportunities for business model innovation.
Diversity or Variety in Business Models
Diversity of Business Models
Value Proposition
It is important that a new venture
itself from its competitors in some way that is important to its customers.

If a new firm’s products or services aren’t different or better than those of its competitors, why would anyone want to try them?
Cost Structure
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
Four Components of a Business Model
Components of a Business Model
Copying a successful business model does not ensure one’s success.

Cost Reduction
Risk Reduction
simplify life
Which one of our customers problems are we helping to solve?

Which customer needs are we satisfying?

Is our customer willing to pay the price we've set to satisfy these needs?
CCS and Primary Research Due February 24th

CCS is your one page concept statement describing your business idea.

Your primary research includes your survey questions, your completed surveys and a one to 2 page summary of what you learned about your idea from the survey responses.
Be ready to share with the class
Business Model Canvas
Who are our Customer Segments:

or multi-sided?

Personal Assistance
Face to Face
Self Service
Who is a newspapers customer?
Channels: how will our customers get our product?

Sell through our own stores or sell to existing stores?
vs traditional
brick and mortar

Chapter 5 Quiz Due

Have a great weekend!
Retail Store Customer
Single segment
Business Models
Full transcript