<slide_break></slide_break> ## Business Models <div class="discussionbox"><strong>Discussion:</strong> What do you know about what a "business model" is? Say Yyou describe an idea you have and a friend asks you, what's the business model? What is your answer? </div> <h3 id="intro">Intro</h3> <ul> <li>Term’s definition is not set in concrete (as usual)</li> <li>Blueprint for how a business will function</li> <li>Describe how a business will <em>creates</em>, <em>delivers</em> and <em>captures</em> <strong>value</strong></li> <li>Incorporates the product, value proposition, the pricing, the growth model and more</li> <li>In a way this is the final deliverable for the term project :)</li> </ul> <slide_break></slide_break> <h2 id="building-blocks-of-a-business-model">Building Blocks of a business model</h2> <slide_break></slide_break> <h3 id="background-of-the-business-model-canvas">Background of the Business Model Canvas</h3> <p><em>(based on <a href="https://www.strategyzer.com/library/business-model-generation">Business Model Generation</a> and follow on research, books and tools)</em></p> <ul> <li>Here is the: <a href="/content/topics/images/the-business-model-canvas.pdf">Business Model Canvas</a></li> <li>One way to structure strategic planning, analysis</li> <li>Checklist helps cover all the bases when designing a business model</li> <li>Handy if have one of several possibilities that you are examining</li> <li>Note that a single business might operate based on two different models (but it’s more complex to do that and usually not the right way to go.)</li> </ul> <slide_break></slide_break> <h3 id="customer-segments-for-whom">Customer Segments (for whom)</h3> <ul> <li>What customer or groups of customers?</li> <li>And who are the most important ones?</li> <li>A segment is distinct if you can identify a set of customers require a different: <ul> <li>offer</li> <li>channels</li> <li>relationships</li> <li>payment models</li> </ul> </li> <li>Examples: Mass market? Niche market? Segment of larger market? Two sided market?</li> <li>Note that you might be going after more than one!</li> </ul> <slide_break></slide_break> <h3 id="value-proposition-the-offer">Value Proposition (the offer)</h3> <ul> <li><strong>Important</strong>: Teams will use <a href="/content/topics/images/the-value-proposition-canvas.pdf">Value Proposition Canvas</a> to analyze this in more depth!</li> <li>What problem do we solve for the customer?</li> <li>What product/service do we deliver to the customer?</li> <li>How do we do that compared to what they do today? <ul> <li>There’s more than “solving a totally new problem/needs”</li> <li>More common is that there’s the old way, and then there’s our improvement on it</li> <li>Examples: performance, customization, convenience, price, status, safety, etc.</li> </ul> </li> </ul> <slide_break></slide_break> <h3 id="revenue-streams-or-pricing-model">Revenue Streams (or pricing model)</h3> <ul> <li>Per customer segment/offer, who pays and what do they pay for?</li> <li>How do you set and adjust the price?</li> <li>Examples: simple purchase; usage fee (“pay by the drink”); subscription; licensing; in-“game”-purchases; lending or leasing;</li> </ul> <slide_break></slide_break> <h3 id="cost-structure">Cost Structure</h3> <ul> <li>‘Simply’ all the costs needed to run the businss model</li> <li>Fixed costs, per-unit variable costs, per-employee variable costs</li> <li>Based on Key resources, key activities and key partnerships</li> </ul> <slide_break></slide_break> <h3 id="channels-how-do-i-reach-customers">Channels (How do I reach customers?)</h3> <ul> <li>How do you reach a customer? How do they want to be reached?</li> <li>Are you able to reach them in that way?</li> <li>You need to figure out how to: generate awareness, allow evaluation, enable purchase, deliver the product, provide after sales follow up</li> <li>Examples: Web site, Direct Sales, Reseller web site (e.g. Amazon), Stores, Wholesaler, social media</li> <li>Why? Major cost driver</li> </ul> <slide_break></slide_break> <h3 id="partnerships">Partnerships</h3> <ul> <li>What outside entities do you have to establish trust with for your model to work?</li> <li>Suppliers? Resellers? Distributors? Maybe a web distributor like Amazon? Maybe Apple, because they have to approve your app. Are you licensing something from a partner?</li> </ul> <slide_break></slide_break> <h3 id="customer-relationships-ongoing">Customer Relationships (ongoing)</h3> <ul> <li>What kind of ongoing relationship does your customer want with you?</li> <li>Examples: personal email; self-service support site; face-to-face; online community; co-creation</li> <li>Why? Key part of the value proposition; also a major cost driver.</li> </ul> <slide_break></slide_break> <h3 id="resources-what-do-you-need-for-success">Resources (What do you need for success)</h3> <ul> <li>Go a level deeper than just “money”. Identify all the things you will need</li> <li>For example: expertise (we need a bigdata person), IP (we need to license music), physical (we will need a shop floor to do assembly.)</li> </ul> <slide_break></slide_break> <h3 id="top-activities-to-do-list">(Top) Activities (To do list)</h3> <ul> <li>This might seem obvious but it’s worth calling out, because it’s so ‘obvious’</li> <li>Examples: software development; packaging and shipping; manufacturing; support; marketing; manufacturing; licensing; etc.</li> </ul> <slide_break></slide_break> <h3 id="conclusions---business-model-canvas">Conclusions - Business Model Canvas</h3> <ul> <li>It’s purpose is to help you consider and address all the pieces of your business model</li> <li>Is it a business or a hobby? Business includes much more than just the product</li> <li>Gives you a way to partition the work, and present the results</li> </ul> <slide_break></slide_break> <h3 id="in-class-team-activity">In Class Team Activity</h3> <ul> <li>With your teammates discuss the Business Model Canvas</li> <li>For your chosen product (or your most likely chosen product)</li> <li>Analyze and write down in bullets the following “boxes” <ul> <li>Value Proposition</li> <li>Customer Segments</li> <li>Key Partners</li> </ul> </li> <li>Submit to <a href="https://moodle.brandeis.edu/mod/assign/view.php?id=71403">Moodle</a> as a pdf or a LEGIBLE picture of your written notes</li> </ul> <slide_break></slide_break> <h2 class="shadow p-3 bg-white rounded">Thank you. Questions?<img class="img-fluid w-100" src="https://picsum.photos/800/100.jpg" /> <small> (random Image from picsum.photos)</small></h2>