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Transcript of Business Models
A value proposition is the reason to buy the product
Describe the product always in combination with the value propositions
Some Value Propositions satisfy an entirely new set of needs that customers previously didn’t perceive because there was no similar offering.
Improving product or service performance has traditionally been a common way to create value.
Tailoring products and services to the specifc needs of individual customers or Customer Segments creates value.
“Getting the job done”
Value can be created simply by helping a customer get certain jobs done.
Design is an important but dificult element to measure. A product may stand out because of superior design.
Customers may find value in the simple act of using and displaying a specific brand.
Offering similar value at a lower price is a common way to satisfy the needs of price-sensitive Customer Segments.
Making things more convenient or easier to use can create substantial value.
Channels have five distinct phases. Each channel can
cover some or all of these phases. We can distinguish
between direct Channels and indirect ones, as well as
between owned Channels and partner Channels.
Finding the right mix of Channels to satisfy how
customers want to be reached is crucial in bringing
a Value Proposition to market.
Also long term or short term !
This relationship is based on human interaction. The customer can communicate with a real customer representative to get help during the sales process or after the purchase is complete.
Dedicated personal assistance
This relationship involves dedicating a customer representative specifcally to an individual client.
In this type of relationship, a company maintains no direct relationship with customers.
This type of relationship mixes a more sophisticated form of customer self-service with automated processes.
Increasingly, companies are utilizing user communities to become more involved with customers/prospects and to facilitate connections between community
More companies are going beyond the traditional customer-vendor relationship to co-create value with customers.
Two broad classes of business model Cost Structures:
cost-driven and value-driven :
Cost-driven business models focus on minimizing
costs wherever possible.
Value-drivenfocus on value creation. Premium Value Propositions and a high degree of personalized service usually characterize value-driven business models.
This category includes physical assets such as manufacturing facilities, buildings, vehicles, machines, systems, point-of-sales systems, and distribution networks.
Intellectual resources such as brands, proprietary knowledge, patents and copyrights, partnerships, and customer databases are increasingly important components of a strong business model.
Every enterprise requires human resources, but people are particularly prominent in certain business models.
Some business models call for financial resources and/or financial guarantees, such as cash, lines of credit.
Cost Structures can have the following characteristics:
Costs that remain the same despite the volume of goods or services produced.
Costs that vary proportionally with the volume of goods or services produced.
Economies of scale
Cost advantages that a business enjoys as its output expands. Larger companies, for instance, beneft from lower bulk purchase rates.
Economies of scope
Cost advantages that a business enjoys due to a larger scope of operations.
These activities relate to designing, making, and delivering a product in substantial quantities and/or of superior quality.
Key Activities of this type relate to coming up with new solutions to individual customer problems. The operations of consultancies, hospitals, and other service organizations are typically dominated by problem solving activities. Their business models call
for activities such as knowledge management and
Business models designed with a platform as a Key Resource are dominated by platform or networkrelated Key Activities. Networks, matchmaking platforms, software, and even brands can function as a platform. Key Activities in this category relate to platform management, service provisioning, and platform promotion.
Optimization and economy of scale
The most basic form of partnership or buyer-supplierrelationship is designed to optimize the allocation of resources and activities.
Reduction of risk and uncertainty
Partnerships can help reduce risk in a competitive environment characterized by uncertainty.
Acquisition of particular resources and activities
Few companies own all the resources or perform all the activities described by their business models.
The most widely understood Revenue Stream derives from selling ownership rights to a physical product.
This Revenue Stream is generated by the use of a particular service. The more a service is used, the more the customer pays.
This Revenue Stream is generated by selling continuous access to a service.
This Revenue Stream is created by temporarily granting someone the exclusive right to use a particular asset for a fxed period in return for a fee.
This Revenue Stream is generated by giving customers permission to use protected intellectual property in exchange for licensing fees.
Sell advertisement space to specific groups
Business models focused on mass markets don’t distinguish between different Customer Segments.
Business models targeting niche markets cater to specifc, specialized Customer Segments. The Value Propositions, Distribution Channels, and Customer
Relationships are all tailored to the specifc require-ments of a niche market.
Some business models distinguish between market segments with slightly different needs and problems.
An organization with a diversifed customer business model serves two unrelated Customer Segments
Multi-sided platforms (or multi-sided markets)
Some organizations serve two or more interdependent Customer Segments.