Business Models - Strategic Management Ii
Business models
Strategic management 2 - seminars
15.4.2013
Ivan Župič
What is business model
?
Definition
A business model describes the rationale of how an organization creates, delivers, and captures value
Business model building blocks
Customer segments
Value propositions
Channels (communications, distribution, sales)
Customer relationships
Revenue streams
Key resources
Key activities
Key partnerships
Cost structure
Customer Segments
A business model may define one or several Customer Segments
An organization must make a consious decision about which segments to serve and which segments to ignore
Once this decision is made, business model can be carefully designed around a strong understanding of specific customer needs
Customer Segments
Customer groups represent segments if: * Their needs require a distinct offer * They are reached through different Distribution Channels * They require different types of relationships * They have substantially different profitabilities * They are willing to pay for different aspects of the offer
Types of Customer Segments: mass market, niche market, segmented, diversified (unrelated CS), multi-sided platforms
Value proposition
Bundle of products/services that create value for a specific Customer Segment
It solves a customer problem or satisfies customer need
Value can be quantitative (e.g. Price, ...) or qualitative (e.g. Design, customer experience)
Examples: newness, performance, customization, „getting the job done“, design, Brand/status, Price, Cost reduction, Risk reduction, Accesibility, Convenience/usability ...
Channels
How a company communicates with and reaches its Customer Segments to deliver a Value Proposition
Channels (communication, distribution and sales) are company’s interface to customers
Functions:
* Raising awareness about company’s products and services * Helping customers evaluate company’s Value Proposition * Allowing cutomers to
Strategic management 2 - seminars
15.4.2013
Ivan Župič
What is business model
?
Definition
A business model describes the rationale of how an organization creates, delivers, and captures value
Business model building blocks
Customer segments
Value propositions
Channels (communications, distribution, sales)
Customer relationships
Revenue streams
Key resources
Key activities
Key partnerships
Cost structure
Customer Segments
A business model may define one or several Customer Segments
An organization must make a consious decision about which segments to serve and which segments to ignore
Once this decision is made, business model can be carefully designed around a strong understanding of specific customer needs
Customer Segments
Customer groups represent segments if: * Their needs require a distinct offer * They are reached through different Distribution Channels * They require different types of relationships * They have substantially different profitabilities * They are willing to pay for different aspects of the offer
Types of Customer Segments: mass market, niche market, segmented, diversified (unrelated CS), multi-sided platforms
Value proposition
Bundle of products/services that create value for a specific Customer Segment
It solves a customer problem or satisfies customer need
Value can be quantitative (e.g. Price, ...) or qualitative (e.g. Design, customer experience)
Examples: newness, performance, customization, „getting the job done“, design, Brand/status, Price, Cost reduction, Risk reduction, Accesibility, Convenience/usability ...
Channels
How a company communicates with and reaches its Customer Segments to deliver a Value Proposition
Channels (communication, distribution and sales) are company’s interface to customers
Functions:
* Raising awareness about company’s products and services * Helping customers evaluate company’s Value Proposition * Allowing cutomers to