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BU121 > 1. Business Model Canvas (10%) > Flashcards

1. Business Model Canvas (10%) Flashcards

1
Q

What is a business model? (In addition to describing the organization’s rationale of CDCv)

A

Is a Blueprint describing how an organization operates

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2
Q

Common differences in similar industries or same product/service?

A

Revenue models (how they make moolah)

Customers segments (who they sell to)

Value proposition

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3
Q

What are the components of a business model canvas?

A

7

KKVCCRCC

Ka kp vp cr cs rs cs c kr

Key activities, key partners, value proposition, customer segments, customer relationships, revenue streams, channels, cost structure, key resources

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4
Q

+Customer segments

A

5

m, n, s, d, m-s

Mass market, niche, segmented, diversified, mutual-sided

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5
Q

what does a business model canvas describe?

A 
The rationale of how an organization 
-creates
-captures
-delivers 
value.

How a company intends to make money/ the logic by which it sustains itself financially

How your idea actually becomes a business

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6
Q

Can you have multiple customer segments?

A

You can serve different customer segments if they require different strategies

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7
Q

When do customer groups representing different segments?

A
  • Their needs require and justify a: distinct offer
  • they are reached though: different distribution channels
  • they require: different types of relationships
  • they have substantially: different profitabilities
  • they are wiling to paying for different aspects of the offer
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8
Q

+Value Propositions

A

10

N, Cr, P, C, D, B/s, C/u, A, P, Rr

Newness, Cost reduction, performance, customization, Design, Brand/status, convenience/usability, Accessibility, price, risk reduction

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9
Q

+Channels are customer touch points
List.
(also consider, how to customer segments want to be reached and through which interaction points?)

A

5

A, E, P, D, As

Awareness, evaluation, purchase, delivery, after sales

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10
Q

How does a partner channel affect operations

A
  • Lead to lower margins
  • allow an organization to expand its reach
  • and benefit from partner strengths
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11
Q

How do owned channels affect operations?

A
  • Have higher margins than partner channels
  • but costly to put in place and to operate
  • gotta find the right mix! (Balance great customer experience & maximize revenue)
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12
Q

What’s in a channel? Etsy

A

Etsy is a partner channel:
Cannot control videos and ads on your product page
If it’s your own channel you can control what is shown

-since etsy is a popular website you can benefit from higher website traffic (sell more quantities and less marketing cost) despite the lower margins

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13
Q

+customer relationships

(consider: what relationships are you establishing with each customer segment? inquisitive? retentive? personal? automated?)

A

6

PDSACC
Personal assistance, dedicated personal assistance (most intimate), Self service, Automated services, communities, co-creation

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14
Q

+example of communities in customer relationships

A

HOGs are Harley Davidson owners

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15
Q

+example of co-creation in customer relationships

A

YouTube, online reviews

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16
Q

+Customer relationships: automated vs. self service

A
  • Grocery stores are self service,
  • Amazon is automated, making suggestions based on previous purchases.

-Automated is more personalized and identifies individual customer preferences

17
Q

+Revenue streams

if customers comprise the heart of business model, then rev streams are its arteries. you are bleeding customers dry to get most out of them

consider: what are customer really willing to pay for? how? are you generating transactional (one-time revenue) or recurring revenues (on-going payments)?

A

7

AABUSLL

Asset sale, advertising, brokerage fees, usage fee, subscription fees, lending/renting/leasing, licensing

18
Q 
\+example of :
usage fee in revenue streams
licensing 
brokerage fees
advertising
A
  • hotels
  • movies
  • Real estate agents, credit card companies per transaction, HR recruiters
  • media, you do an ad
19
Q

+2 types of pricing mechanisms

A

Fixed Pricing:
prices determined in advance of any sales based on 0+ statics variables

Dynamic (variable) pricing:
prices can change based on market conditions

20
Q

+Key Resources

Allow enterprise to create a value proposition, reach markets, maintain relationships with customer, and earn revenues

(Consider, owned vs. leased)

A

4

PIHF

Physical, intellectual, human, financial

21
Q

+Key Acitivites

provide examples of each

*they are the most important thing a company must do to make its business model work

A

3

MSS

Making, selling, supporting

  • Manufacturing &providing services, supply chain like Dell and soft dev like Microsoft
  • promotion and education
  • finding talent (HR), platform/network management, customer service

Microsoft does their own developing, Dell’s supply chain allows for customization

22
Q

+Example of key activity-platform relationship

A

Kijiji.ca’s key activity is maintaining and upgrading the platform/website

platforms can be: networks, match-making platforms, software, and even brands can function as platforms

23
Q

+Key Partners

A

3

ORA

Optimization and Economy of Scale
Reduction of Risk and Uncertainty
Acquisition of resources and activities

24
Q

+4 types of partnerships

A
  1. Strategic partnerships: non competitors
  2. strategic partnerships: competitors, (co-opetition)
  3. Joint ventures to develop new business
  4. Buyer-supplier relationship to assure reliable suppliers
25
Q

+Cost structure

A

2
Cost driven vs value driven

(Walmart vs luxury hotel)

26
Q

+4 characteristics of cost structures

A
  1. fixed costs
  2. variable costs
  3. economies of scale
  4. economies of scope

(think, is your model scalable? software vs consulting)

27
Q

What are the 3 business model patterns?

A

Multi-sided platforms
The long-tail
Free

28
Q

How do multi-sided platforms create value?

A
  • value is created by facilitating interactions between two or more distinct but interdependent groups of customers
  • multi-sided platforms only offer value to a group if the other groups of customers are present (the network effect is when the platform grows in value to attract more users)
  • often solved by one segment subsidizing another
29
Q

example of multi-sided platform

A

Google:
offers free search to web surfing customer segment who are subsidized by advertisers. As well they monetize content by facilitating the advertising on websites of content creators. Their platform also facilitates the connection between web searchers and advertisers. They also offer ads that target web searchers by auctioning keywords at different price points to big companies that are willing to pay lots of money. Whereas long tail sells in high volumes to generate revenue

30
Q

what are some key activities of google as a multi-sided platform?

(probably not important)

A

maintaining and improving search
managing services
promoting platforms

31
Q

What is the long tail approach?

A

Selling “less is more”-focus on offering large # of niche products that (as individuals) sell relatively infrequently instead of focusing on small # of products that each sell in high volumes

32
Q

Why and how does the long tail work?

A
  • Democratization of Tools of Productions (tech increases making it cheaper to produce pro quality)
  • Democratization of Distribution (internet lowers inventory, easy to community and sell)
  • Lower Costs to Connect Supply and Demand: SEO, online communities (such as YouTube channels)

digital storage allows Netflix and iTunes to cheaply distribute and store niche large varieties of content.

(democratization is something that is adapted/appealing to the masses)

33
Q

What is the Free business model pattern?

A

a substantial customer segment is able to benefit from a free-of-charge service, financed by another part of the business model or customer segment

34
Q

3 patterns that make the free offer possible

A
  1. Advertising (cbc, metro papers)
  2. Freemium (Dropbox, LoL)
  3. Bait & Hook (Sidekick: bait is free email insights, hook is allowing you to see more than 100/month for a monthly fee)
35
Q

League of Legends Canvas model:

A

Bait and hook:
offering free games but to get customized skins and unlock new championships or upgrade there is a fee.

Customer relationship: Mass customized
Distribution channel: website, download @ lol.com
Customer segments: web users (normal people+trolls) globally

36
Q

Sidekick canvas model:

A

revenue stream : monthly service revenue
customer segments: mass market people who use email
customer relationships: profile integration with email programs
distribution channels: website

37
Q

Recent game changer patterns

A

freemium
membership model-subscription box
crowdsourcing models-crowdfunding, crowdfunding, peer-to-peer sharing (sharing economy)

38
Q

Sharing economy examples

A

uber taxi service has no vehicles
alibaba retailer has no inventory
airbnb accommodation provider owns no real estate
facebook media owner creates no content

BU121 (6 decks)

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