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Module 4 - Building - Business - Models

The document discusses business models and their key components. It defines a business model and explains the four main parts: offering, customers, infrastructure, and financial viability. It also discusses customer value propositions, different types of CVPs and customer segments, and the business model canvas as a tool.

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HIEZEL BAYUG
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20 views

Module 4 - Building - Business - Models

The document discusses business models and their key components. It defines a business model and explains the four main parts: offering, customers, infrastructure, and financial viability. It also discusses customer value propositions, different types of CVPs and customer segments, and the business model canvas as a tool.

Uploaded by

HIEZEL BAYUG
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Digital Innovation, Creativity and

Enterprise

Week 5: Building Business Models

Ghaliah Almeziad
Session Outline

■ What is a Business model ?


■ The Four Parts of a Business Model.
■ The Customer Value Proposition (CVP).
■ Different Types of CVPs and Customer
Segments.
■ The Business Model Canvas (BMC).

2
What is a Business Model ?

■ It is a conceptual framework that describes how a


company creates, delivers, and extracts value.

■ It includes a network of activities and resources to


create a sustainable and scalable business that
delivers value to target customers.

■ Business models help entrepreneurs generate


value and scale.

3
The Business Model

■ In any company (big, small, new, old) must always be


poised for adjustment and changes as new information is
received and market change.

4
The Four Parts of a Business Model

The business model consists of four main interlocking parts


that together create ‘the business’. Without these four
parts, there is no business, no company, no opportunity.
These are as follows:

■ The Offering.
■ The Customers.
■ The Infrastructure.
■ The Financial Viability.

5
The Offering

■ The first part of the business model, which


identifies what you are offering to a particular
customer segment, the value generated for those
customers, and how you will reach and
communicate with them.

■ The offering includes the customer value


proposition (CVP), that describes exactly what
products or services your business offers and
sells to customers.

6
Customers

■ Entrepreneurs typically can’t serve everyone in a


market, so you have to choose whom best to
target.

■ You have to determine how you will reach those


segments and how you will maintain a relationship
with the customer.

7
Infrastructure

■ It is generally includes all the resources (people,


technology, products, suppliers, partners,
facilities, cash, etc.) that an entrepreneur must
have in order to deliver the CVP.

8
Financial Viability

■ Defines the revenue and cost structures a business


needs to meet its operating expenses and financial
obligations.

■ How much will cost to deliver the offering to our


customers ?

9
The Customer Value Proposition (CVP)

It is the most important part of your business model,


and for your CVP to be truly effective, it needs three
qualities:

■ It must offer better value than the competition.


■ It must be measurable in monetary terms.
■ It must be sustainable.

10
The CVP means thinking about your business
from the customer’s viewpoint rather than
from an organizational perspective. Your CVP
must demonstrate that you are meeting the
needs of various customer segments.

11
Four Problems Experienced by
Customers:

Customer encounter at least one of four problems that


prevent them from getting a job done. These problems
include:
Lack of Lack of
Time Money

Lack of Lack of
Skills Access

12
What job is the customer trying to get done
?

13
Different Types of CVPs and Customer
Segments

Three main types of approaches in creating value


propositions:

■ The All-Benefits
■ The Points-of-Difference
■ The Resonating-Focus

14
The All-Benefits

■ It involves identifying and promoting all the


benefits of your product or service to target
customers, with little regards to the competition or
any real insight into what customer really wants or
needs.

■ It is overly product focused.

15
The Points-of-Difference

■ A type of approach that focuses on the


product or service relative to the
competition and how the offering is
different from others on the market.

16
The Resonating-Focus

■ A type of CVP that describes why people will


really like your product and focuses on the
customers and what they really need and value.

■ Also, called "just what the customer wants” or


“product-market fit”.

17
Defining Your Target Customer

■ As knowledgeable entrepreneur, you must


realize that a major part of your business
proposition is to figure out which customers
to focus on and which ones to ignore.

■ For example, if you are trying to sell luxury


yachting experiences, you may target
professionals between 30 and 65, with a high
income, who live in location close to water,
and who have an interest in water sports.

18
Types of Customer Segments:

■ Businesses often have different CVPs for each


customer segment. This is to ensure they are
meeting the needs of the customers within each
segment.

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Types of Customer Segments:

Some examples of different customer segments


targeted by different types of businesses include:

■ Mass markets
■ Niche markets
■ Segment markets
■ Diversified markets
■ Multisided markets.

Matching the right CVP to targeted customer


segments is essential to the development of a
scalable business model.
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The Business Model Canvas
(BMC)

■ It is a type of visual plan that depicts the business


on one page by filling in nine blocks of business
model:

1. Customer Value Proposition.


2. Customer Segments.
3. Channels (e.g. online).
4. Customer Relationships
5. Key Activities (e.g. sales management).
6. Key Resources (e.g. people, information &
technology).
7. Key Partners (e.g. suppliers).
8. Revenue Streams.
21
9. Cost Structure.
The Business Model Canvas
(BMC)

22
Remember a business model is about
creating, capturing, and delivering value. The
business Model Canvas is a great tool to help
you think about this, and encourages you to
find answers to the most important questions
and think about them in a structured way.

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