40 Questions
What kind of relationship is established between a company and its customer through a kiosk at an airport?
Transactional
What type of relationship involves dedicating a customer representative specifically to an individual client?
Dedicated personal assistance
What does a customer receive in a dedicated personal assistance relationship?
A dedicated customer representative
What is characteristic of automated services?
Recognition of individual customers
What is the purpose of utilizing user communities?
To facilitate connections between community members
What type of relationship is based on human interaction?
Personal assistance
What type of relationship does not involve direct interaction with customers?
Self-service
What is an example of a dedicated personal assistance relationship?
Key account managers
What is a Customer Segment in a business model?
A distinct group of people or organizations with common needs
Why is it necessary to identify Customer Segments?
To design a business model around specific customer needs
What characterizes separate Customer Segments?
Different needs requiring a distinct Value Proposition
What is a characteristic of business models targeting mass markets?
They focus on one large group of customers with broadly similar needs
Why might a business model have multiple Customer Segments?
Because each segment has different needs and jobs-to-be-done
What is an example of a business model targeting a niche market?
A specialized software company
Why is it important to make a conscious decision about which Customer Segments to serve?
To design a business model around specific customer needs
What is the result of not identifying and catering to distinct Customer Segments?
A company that cannot survive for long
What is one of the benefits of maintaining online communities for companies?
To better understand their customers
What is co-creation in the context of business?
A process of creating value with customers
Why did GlaxoSmithKline launch a private online community for its weight-loss product?
To better understand the challenges faced by overweight adults
What is the primary purpose of the Cost Structure building block in the Business Model Canvas?
To describe the most important costs incurred in a business model
What is an example of a company that engages customers to assist with the design of new products?
Amazon.com
What is the primary purpose of maintaining customer relationships in a business model?
To create value for customers
What is the term used to describe the ease or difficulty of a customer switching to a different alternative?
Switching costs
What is a key factor in calculating the cost structure of a business model?
Defining key resources and key activities
What is the main purpose of the Key Resources Building Block in a business model?
To identify the most important assets required to make a business model work
What is the primary goal of a company's Value Proposition?
To solve the customer's problem or satisfy their need
What is the main objective of the Cost Structure Building Block in a business model?
To describe the most important costs incurred to operate a business model
What is the primary function of the Key Partnerships Building Block in a business model?
To define the network of suppliers and partners that make the business model work
What is the main purpose of the Key Activities Building Block in a business model?
To outline the most important actions a company must take to operate successfully
What is the primary question that a company should ask itself regarding its customer segment?
For what value is each customer segment truly willing to pay?
What is the ultimate goal of a company's Value Proposition?
To solve the customer's problem or satisfy their need
What is the primary function of a company's Value Proposition?
To solve the customer's problem or satisfy their need
What type of business model is characterized by low-cost structures and maximum automation?
Cost-driven business model
Which of the following is an example of a cost-driven business model?
No frills airlines
What is the primary focus of a value-driven business model?
Maximizing value creation
What is an economy of scale?
A cost advantage due to a larger output
Which of the following is an example of a fixed cost?
Salaries
What is the main difference between cost-driven and value-driven business models?
Their focus on cost minimization or value creation
Which of the following is an attribute of a cost structure?
Economies of scale
What is an economy of scope?
A cost advantage due to a larger scope of operations
Study Notes
Business Model Canvas
- A business model consists of several building blocks, including Value Proposition, Customer Segments, Cost Structure, Key Resources, Key Activities, and Key Partnerships.
Value Proposition
- Describes the bundle of products and services that create value for a specific Customer Segment.
- Questions to ask: What value do we deliver to the customer? Which one of our customer's problems are we helping to solve? Which job are we helping the customer get done? Which customer needs are we satisfying?
- The reason why customers turn to your company over another, solving their problem or satisfying their need.
Customer Segments
- The different groups of people or organizations your enterprise aims to reach and serve.
- Questions to ask: For whom are we creating value? Who are our most important customers, clients, or users?
- Customer groups represent separate segments if: Their needs require and justify a distinct Value Proposition, They are reached through different Distribution Channels, They require different types of relationships, They have a substantially different profitability, or They are willing to pay for different aspects of the Value Proposition.
Types of Customer Segments
- Mass market: Focus on one large group of customers with broadly similar needs and problems.
- Niche market: Cater to specific, specialized Customer Segments.
- Long-term: Establish a long-term and maybe even deep relationship with the customer.
- Personal assistance: Based on human interaction, providing help during the sales process or after the purchase.
- Dedicated personal assistance: Dedicating a customer representative specifically to an individual client.
- Self-service: Provide all the necessary means for customers to help themselves.
- Automated services: Mix a more sophisticated form of customer self-service with automated processes.
- Communities: Utilize user communities to become more involved with customers/prospects and to facilitate connections between community members.
- Co-creation: Go beyond the traditional customer-vendor relationship to co-create value with customers.
- Switching costs: Indicate how easy or difficult it is for a customer to switch to a different alternative.
Cost Structure
- Describes all costs incurred to operate a business model.
- Questions to ask: What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
- The most important costs incurred while operating under a particular business model.
Types of Cost Structure
- Cost-driven: Focus on minimizing costs wherever possible, using low price Value Propositions, maximum automation, and extensive outsourcing.
- Value-driven: Focus on value creation, using premium Value Propositions and a high degree of personalized service.
Cost Structure Attributes
- Economies of scale: Cost advantages that a business enjoys as its output expands.
- Economies of scope: Cost advantages that a business enjoys due to a larger scope of operations.
- Fixed cost: Costs that remain the same despite the volume of goods or services produced.
This quiz covers the key components of a business model, including customer segments, cost structure, key resources, and feasibility. It's a fundamental concept in business strategy and management.
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