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Session 7

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Uploaded by

vikas
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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Design Thinking

Session 7

Instructor:

Dr. Nisha Bamel


Phone: 390(O), 7065310338 (R)
Contacts: [email protected]
Business Model

What is business model?

A business model describes the rationale of how an organization


creates, delivers, and captures value

Business model canvas provides general overview of company and


helps companies to visualize and analyze their strategy.
Why Business Model Canvas?
• At the start of your design process, it’s vital to map out the business
model of your service to see how it will fit into the marketplace
• To ensure what you propose can bring maximum value to both your
customers and business, and keep doing so in terms of customer
retention, profitability and more
• To gain the most accurate vision of a proposed product or service, it’s
essential to understand all the components and dynamics of not
only the customer experience but also the service as a whole
ecosystem
• This ecosystem contains all the channels and touchpoints that must
work together to deliver and sustain maximum value to the customer
Customer Segment
• This defines the different groups of people or organizations that a
business plans to reach

• When looking at customer segments, it is important to group people


into multiple segments to better satisfy their needs

• The groups could be small or large depending on their common


needs, behaviors, location, or attributes

• Once you have a clear idea of who you are providing a service for, you
can make the steps towards creating value for them
Value Proposition
• The second building block is based on how your company bundles
products and services to meet each customer segment’s needs
• A Value Proposition creates a unique value for customers through a
mix of elements that could be qualitative or quantitative i.e. price,
design, customer experience
• What value do we deliver to the customer?
• It is due to the value proposition that a person might want to choose
one service over another
• Think about how you can fill the gaps in customer needs and
problems that other companies in your industry are not fulfilling.
CHANNELS
• The channels building block is how your company will communicate with each customer
segment, delivering them your value proposition
These channels can include social media, websites, newspaper advertisements……..
Consider which methods of communication are the most cost-efficient
Awareness
• How do we raise company awareness and build upon our brand?
Evaluation
• How do we reach customers to have them evaluate our value proposition?
Purchase
• Through which channels can we direct customers to purchase our products and services?
Delivery
• How do we deliver the value proposition to the customers?
After Sales
• How do we provide customer support after purchase?
Customer Relations
• There are three driving motives for building relationships with your
customers

1. New Lead Generation


2. Customer Retention
3. Upselling
Revenue
• This building block measures the earnings a company generates from
each customer segment
• Different groups of customers are willing to pay at different levels,
you can come up with different revenue streams to apply to each of
these groups. A business model includes only two types of revenue
streams:
• Transaction Revenues – This results from customers who make one
payment for a product or service.
• Recurring Revenues – These ongoing payments can include a
prolonged value proposition or post-purchase customer service.
Key Resources
• Key Resources are the important assets that are available to you and
are required to make your business plan a success.

• These resources allow you to create your unique value proposition,


maintain important relationships with your customers, reach new
markets, and create revenue.

• These resources can range from physical, financial, intellectual, or


human assets.
Key Activities
key activities building block describes the important process that a
business must take part in for a business model to work-
1. Production These key activities are the focus of manufacturing
firms and relates to the designing, creating, and delivery of
products
2. Problem Solving These activities include knowledge management
and training. Problem-solving is key to coming up with new
solutions to customer problems
3. Platform/Network includes platform management, service
positioning, and platform promotion
Key Partnership
• key Partners include suppliers, buyers, or even other businesses in
your industry to create an alliance with
4 main categories of partnerships:

1. Strategic Alliances with Non-competitors


2. Strategic Partnerships with Competitors
3. Joint Ventures to create new Businesses
4. Buyer-Supplier Relationships
Motives of Key Partnership
• Optimization and Economies of Scale

• Reduction of Risk and Uncertainty

• Acquisition of Resources and Activities


Cost Structure

• The cost structure building block describes all costs involved in


operating a business model. The cost structure of a business can be
placed into one of two categories:
• Cost driven: This cost structure focuses on minimizing costs wherever
possible
• Value-driven cost structure: a business focuses on how to create the
best value for each customer segment. This can include a highly-
personalized service and exclusive services.

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