module - business model generation

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INTRODUCTION TO BUSINESS MODEL DESIGNModule: Value Proposition and Business

Model DesignLecturer: [Insert name]Date: [Insert date]

PRESENTATION SUPPORTED BY


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Do we really understand why some organisations are more successful than others?

How did Apple become such a high valued company?

Why is Microsoft still the market leader in operating systems if Apple products and their software are better?

How is it possible that some start-ups can disrupt entire industries while the market leaders cannot do anything against it?

Just some of the question we should know an answer for …

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In this course you will gain knowledge about social entrepreneurship and social entrepreneurs

By the end of this session you should be able:• to define what a business model is and

define its importance in today’s business environment

• to name each building block of the Business Model Canvas and describe different characterisations each building block can have

• to analyse existing and develop new business models using the Business Model Canvas, if sufficient information on the context of the business is available

This is a very hands on course! Each lecture we will take one of the 9 building blocks of the most used business model framework and use 2 cases to explore the building block in detail. Applying your learnings from the previous weeks, you will analyse 2 additional cases at the end of the course from A to Z.

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Table of Contents

• DEFINITION of the business model term1

• Business model FRAMEWORKS2

• The BUSINESS MODEL CANVAS3

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A business model is defined as the rationale

of how an organization creates and delivers value

to its customers and captures value in return

Defining the term business model

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Overview of business model frameworks (1/2)

Source Components #Horowitz (1996) Price, product, distribution, organizational characteristics, and technology 5Viscio and Pasternak (1996) Global core, governance, business units, services, and linkages 5Timmers (1998) Product/service/information flow architecture, business actors and roles, actor

benefits, revenue sources, and marketing strategy5

Markides (1999) Product innovation, customer relationship, infrastructure management, and financial aspects

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Donath (1999) Customer understanding, marketing tactics, corporate governance, and intranet/extranet capabilities

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Chesbrough and Rosenbaum (2000)

Value proposition, target markets, internal value chain structure, cost structure and profit model, value network, and competitive strategy

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Gordijn et al. (2001) Actors, market segments, value offering, value activity, stakeholder network, value interfaces, value ports, and value exchanges

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Linder and Cantrell (2001) Pricing model, revenue model, channel model, commerce process model, Internet-enabled commerce relationship, organizational form, and value proposition

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Petrovic et al. (2001) Value model, resource model, production model, customer relations model, revenue model, capital model, and market model

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Overview of business model frameworks (2/2)

Source Components #Horowitz (1996) Price, product, distribution, organizational characteristics, and technology 5Viscio and Pasternak (1996) Global core, governance, business units, services, and linkages 5Timmers (1998) Product/service/information flow architecture, business actors and roles, actor

benefits, revenue sources, and marketing strategy5

Markides (1999) Product innovation, customer relationship, infrastructure management, and financial aspects

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Donath (1999) Customer understanding, marketing tactics, corporate governance, and intranet/extranet capabilities

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Chesbrough and Rosenbaum (2000)

Value proposition, target markets, internal value chain structure, cost structure and profit model, value network, and competitive strategy

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Gordijn et al. (2001) Actors, market segments, value offering, value activity, stakeholder network, value interfaces, value ports, and value exchanges

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Linder and Cantrell (2001) Pricing model, revenue model, channel model, commerce process model, Internet-enabled commerce relationship, organizational form, and value proposition

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Petrovic et al. (2001) Value model, resource model, production model, customer relations model, revenue model, capital model, and market model

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?Discussion question: Which elements of the frameworks do you think are key?

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The Business Model Canvas (BMC)

The BMC contains 9 building blocks

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The canvas tries to describe the

infrastructure (how), the offering (what),

the customers (who) and the finances

(how much)

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The Business Model Canvas (BMC): An example

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?Discussion question: Which components of other business model frameworks are missing in the BMC?

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The next weeks

Each week we will explore the 9 building blocks of the business model canvas one after another.

We will do so, by discussing two companies and what. Your job is it to conduct EXTENSIVE research

on both companies so that we can start analysing them in the next session


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THANK YOUFOR YOUR ATTENTION

BMC01 – CUSTOMER SEGMENTSModule: Value Proposition and Business




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A short reminder: The Business Model Canvas (BMC)


infrastructure (how), the offering (what), the customers (who) and

the finances (how much)

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This is what we talk about today

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Customer segments

Key Questions:• For whom are we creating value?• Who are our most important customers?

Potential characteristics• Mass Market• Niche Market• Segmented• Diversified• Multi-sided Platform

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?Task: find at least three examples for each of the potential characteristics outlined on the previous slide

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Lets take a closer look!

Describe in detail the customer segments of the following companies:

Create groups, get up your chairs and using Post-it notes, flipcharts/flip chart paper put on the wall, whiteboards or whatever

available to work in a more dynamic setting.

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?Question: Which problems did you have when characterising the customer segments?

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Reminder

Do not forget to make a picture of your work (you will need it in the next sessions)


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BMC02 – VALUE PROPOSITIONModule: Value Proposition and Business




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Value proposition

Key questions:• What value do we deliver to the customer?• Which one of our customer’s problems are we helping to solve? • What bundles of products and services are we offering to each

Customer Segment?• Which customer needs are we satisfying?

Potential characteristics• Newness• Performance• Customization• “Getting the Job Done”

• Design• Brand/Status• Price• Cost Reduction

• Risk Reduction• Accessibility• Convenience

/Usability

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?Task: find at least one example for each of the potential characteristics outlined on the previous slide

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Describe in detail the value propositionof the following companies:



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?Question: Which problems did you have when characterising the value propositions?

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Reminder



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BMC03 – CHANNELS

Module: Value Proposition and Business Model Design

Lecturer: [Insert name]Date: [Insert date]



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Channels

Key questions:• Through which Channels do our Customer Segments want to be

reached? • How are we reaching them now?• How are our Channels integrated? • Which ones work best?• Which ones are most cost-efficient? • How are we integrating them with customer routines?

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Channels

Channel phases:

• Awareness - How do we raise awareness about our company’s products and services?

• Evaluation - How do we help customers evaluate our organization’s Value Proposition?

• Purchase - How do we allow customers to purchase specific products and services?

• Delivery - How do we deliver a Value Proposition to customers?• After sales - How do we provide post-purchase customer support?

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Describe in detail the channels used byof the following companies:



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?Question: Which problems did you have when characterising the value propositions?

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Reminder



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BMC04 – CUSTOMER RELATIONSHIPSModule: Value Proposition and Business




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Customer relationships

Key questions• What type of relationship does each of our Customer• Segments expect us to establish and maintain with them?• Which ones have we established? • How are they integrated with the rest of our business model?• How costly are they?

Examples• Personal assistance• Dedicated Personal Assistance• Self-Service• Automated Services

• Communities• Co-creation

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?Task: find at least two examples for each of the potential characteristics outlined on the previous slide

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Describe in detail the customer relationshipsof the following companies:



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?Question: Which problems did you have when characterising the customer relationships?

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Reminder



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BMC05 – REVENUE STREAMSModule: Value Proposition and Business




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Key questions• For what value are our customers really willing to pay?• For what do they currently pay? • How are they currently paying? • How would they prefer to pay? • How much does each Revenue Stream contribute to overall

revenues?

Types:• Asset sale• Usage fee• Subscription Fees• Lending/Renting/Leasing

• Licensing• Brokerage fees• Advertising

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Fixed pricing• List Price• Product feature dependent• Customer segment dependent• Volume dependent

Dynamic pricing• Negotiation( bargaining)• Yield Management• Real-time-Market

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Describe in detail the revenue streamsof the following companies:



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?Question: Which problems did you have when characterising the revenue streams?

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Reminder



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BMC06 – KEY RESOURCESModule: Value Proposition and Business




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Key resources

Key questions• What Key Resources do our Value Propositions require?• Our Distribution Channels? Customer Relationships?• Revenue Streams?

Types of resources• Physical• Intellectual (brand patents, copyrights, data)• Human• Financial

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?Task: find at least two examples for companies which are primary depending on each of the resource types

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Describe in detail the key resourcesof the following companies:



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?Question: Which problems did you have when characterising the key resources?

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Reminder



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BMC07 – KEY ACTIVITIESModule: Value Proposition and Business




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Key questions• What Key Activities do our Value Propositions require?• Our Distribution Channels? • Customer Relationships?• Revenue streams?

Categories• Production• Problem Solving• Platform/Network

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?Task: find at least three examples for each of the categories outlined on the previous slide

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Describe in detail the key activitiesof the following companies:



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?Question: Which problems did you have when characterising the key activitites?

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Reminder



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BMC08 – KEY PARTNERSHIPSModule: Value Proposition and Business




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Key questions• Who are our Key Partners? • Who are our key suppliers?• Which Key Resources are we acquiring from partners?• Which Key Activities do partners perform?

Motivations for partnerships:• Optimization and economy • Reduction of risk and uncertainty• Acquisition of particular resources and activities

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?Task: find at least three examples of companies representing each partnering motivation

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Describe in detail the key partnershipsof the following companies:



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?Question: Which problems did you have when characterising the key partners?

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Reminder



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BMC09 – COST STRUCTUREModule: Value Proposition and Business




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Key questions• What are the most important costs inherent in our business model? • Which Key Resources are most expensive? • Which Key Activities are most expensive?

Is your business more:• Cost Driven (leanest cost structure, low price value proposition,

maximum automation, extensive outsourcing)• Value Driven (focused on value creation, premium value proposition)

Sample characteristics:• Fixed Costs (salaries, rents, utilities)• Variable costs

• Economies of scale• Economies of scope

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?Task: find at least three examples for cost and value-driven companies, and one where it changed

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Describe in detail the cost structureof the following companies:



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?Question: Which problems did you have when characterising the key partners?

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Reminder



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BUSINESS MODEL CASESModule: Value Proposition and Business




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The bigger picture

Having separately analyse each component of Google’s and Walt Disney’s business model, it is time to look at the bigger picture.

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The bigger picture

It is now your task to analyse the business model as a whole and develop new business model which Google resp. Walt Disney could implement in the future.

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The bigger picture

To do so, split in groups and hang the business model canvas on the wall (including all your results from the previous sessions) and develop different scenarios for future business models.

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The bigger picture

Evaluate each scenario and present your results later in front of the other groups (there you also have to detail which criteria you used to evaluate the.


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BUSINESS MODEL CASE II – OWN IDEAModule: Value Proposition and Business




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From existing to new ideas

In the past weeks you have learned how to analyse existing business models.

Now it is time to develop one from the scratch.

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Your task

Build groups and select one idea which has not yet been implemented. This can either be an idea you have yourself or you might take one from the internet (e.g. you can look for innovative ideas at crowdfunding platform).

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Your task

Put the business model canvas on the wall and get started.

Be prepared to present your results to the other groups.

ENJOY!


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