Podcast
Questions and Answers
What is the name of a framework used to summarize business hypotheses?
What is the name of a framework used to summarize business hypotheses?
Business Model Canvas
What is the main goal of developing a business model?
What is the main goal of developing a business model?
Which of the following is NOT a component of a business plan?
Which of the following is NOT a component of a business plan?
What is the main message of the quote "No Business Plan Survives First Contact with Customers."?
What is the main message of the quote "No Business Plan Survives First Contact with Customers."?
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The cost-plus business model involves customers paying a fixed price for a product regardless of its actual cost.
The cost-plus business model involves customers paying a fixed price for a product regardless of its actual cost.
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What is the primary difference between a cost-plus business model and an hourly rate model?
What is the primary difference between a cost-plus business model and an hourly rate model?
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Which business model involves customers paying a low upfront cost and then recurring costs based on usage?
Which business model involves customers paying a low upfront cost and then recurring costs based on usage?
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Which of the following business models relies on earning a commission from a third party for purchases made by customers?
Which of the following business models relies on earning a commission from a third party for purchases made by customers?
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What is the main idea conveyed in the final takeaways slide?
What is the main idea conveyed in the final takeaways slide?
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Study Notes
ENGG 525 - Business Models
- Course taught by Dr. Ghada Nafie at the Schulich School of Engineering.
- Business plans should be well-written, covering technology, market, competition, team, finance, and sales channels.
- A one-page executive summary is also necessary.
- Lean startup methodology emphasizes contacting customers first, summarizing hypotheses in a Business Model Canvas instead of a complex business plan.
- A business model is a method for a startup to make money by offering value to customers in a specific market segment.
- A business model clearly identifies who pays, how much, and for what.
- Key components of a business model include revenue, market, and customers.
- Revenue shows how a solution generates income.
- Market understanding is essential for successfully entering a market.
- Identifying customers and their purchasing methods is pivotal.
- Generalized business models exist; some can be hybrid.
- Different types of business models include Cost Plus, Hourly Rate, Leasing Model, Time + Maintenance, Licensing, Consumables, Add-On Products, Advertising, Reselling Data, Transaction Fee, Usage Model, Cell Phone Plans, Penalty Fees, and Micro Transactions.
- Cost Plus: Customer pays a percentage over product cost.
- Hourly Rate: Rewards activity, not progress.
- Leasing Model: Agreed-upon periodic payment.
- Time + Maintenance: Large upfront charge with ongoing upgrades/maintenance.
- Licensing: Customers license intellectual property (IP) and pay royalties.
- Consumables: Low upfront cost with usage-based ongoing costs.
- Add-On Products: Customers buy the main product and pay more for additional items.
- Advertising: Revenue through third parties reaching customers.
- Reselling Data: Reselling customer data to earn revenue from third parties.
- Transaction Fee: Commission from a party when customer makes a purchase.
- Usage Model: Customers pay for the amount of use.
- Cell Phone Plans: Customers pay for a committed usage amount.
- Penalty Fees: Small fee for basic service with substantial charges if necessary.
- Micro Transactions: Customers use their credit card for small digital purchases.
- Franchise: Others pay a startup for a business it creates.
- Innovative business models often emerge beyond established categories, or as hybrids.
- Business models are crucial for extracting value and are not static choices.
- Customers are receptive to fresh concepts.
Business Model Canvas
- Key components for a business model canvas include Problem, Solution, Unique Value Proposition, Unfair Advantage, Customer Segments, Key Metrics, Channels, Cost Structure, and Revenue Streams.
- Defining customer needs and developing a value proposition are crucial.
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Description
Explore the critical components of effective business models in this quiz for ENGG 525, taught by Dr. Ghada Nafie. Understand the importance of the Business Model Canvas, the lean startup methodology, and how various business components like revenue and customer identification interact. This quiz will test your knowledge on how startups create value and generate income in specific market segments.
