B.Sc. III Business Models & Practice Venture

YCIII SKILL COURSE Business Models and Practice Venture B.Sc. III Mr.G.A.Varade Assistant Professor Department of Forensic Science YCIS, SATARA (Autonomous)  Syllabus Unit I (3 Hrs): Understanding Business Models:...

YCIII SKILL COURSE Business Models and Practice Venture B.Sc. III Mr.G.A.Varade Assistant Professor Department of Forensic Science YCIS, SATARA (Autonomous)  Syllabus Unit I (3 Hrs): Understanding Business Models: Creating values, features and capturing the market, Understanding Operating Models: Structures, Assets and Capabilities,Case Study Unit II (3 Hours) Understanding the Go to market strategy and Value Chain Supply Case Study Unit III (6 Hours) Preparing Lean Canvas: Business Model for pitching ideas to investors Unit IV (8 Hours) Practice Venture: Building a business using design thinking Unit I (3 Hrs): Understanding Business Models: Creating values, features and capturing the market, A business model is a framework for how a company will create value. Ultimately, it distills the potential of a business down to its essence. A business model answers fundamental questions about the problem you are going to solve, how you will solve it, and the growth opportunity within a given market. Creating a successful business model is essential, whether you are starting a new venture, expanding into a new market, or changing your go-to-market strategy. You can use a business model to capture fundamental assumptions and decisions about the opportunity in one place, setting the direction for success. Business model vs. business plan Business models and business plans are both important tools that help you create and refine your strategy. Many times you will use both when pursuing a new business initiative, but they each serve a different purpose. A business model is the foundation for your company and products. It captures the main idea of how your business will generate revenue. A business plan goes into greater detail — it is a document that explains how you will make the business model work. Your business plan will likely include your company's goals, the resources and methods you will use to achieve those goals, and even your expected timelines and financial performance. Together, your business model and business plan describe the intended value of your product and how you plan to deliver this value to your customers. What are some business model examples? There are many types of business models. Each one varies considerably based on the type of organization and offering. For example, a manufacturing company will have a very different model than an advertising agency. Even within a specific industry, business models vary. Here are some common types of business models used by technology companies: Freemium business model: A basic product is provided for free but you charge for additional services or features. Free trial business model: Customers can experience the full product for free for a limited amount of time. Licensing business model: Technology or innovations are monetized by licensing them to other companies. Open-source business model: Your product is free but you generate revenue through other means such as crowdsourcing. Subscription business model: Customers pay a recurring fee to access your product or service. Most businesses end up using a combination of business models to reach their customers and grow over time. How do you create a new business model? A business model should answer important questions about your business and set out a strong vision for the business. The key components of a business model should include relating to your target customers, the market, organization strengths and challenges, essential elements of the product, and how it will be sold. Establishing this foundation guides the next planning tool — your product roadmap. Building your business model requires researching and defining a few core components. Here is a list of the essentials to include when you create a business model: Component & Meaning Vision High-level overview of the core essence of your product strategy, including what is being built and why Key objectives Definition of your top-level goals and how they will be measured. Customer targets and challenges Description of the different types of target customer and their pain points Solution How your product will solve those pain points Value Key characteristics that differentiate your product or service Understanding Operating Models: Structures, Assets and Capabilities Case Study Operating model is the bridge between strategy and day-to-day operations that guides the team, provides the context, and enables the behaviours that will realize the strategy and vision. What is structure operating model? The Operating Model is the chosen way an organisation wants to operate to deliver the Value Chain. Generally, it is a visual representation that encompasses the strategy, strengths, environment and priorities of your organisation. What are the five core operating model functions? While they can be grouped in a number of ways, we consider five core operating model functions: governance, risk and control; financial management; legal and physical structure; people and reward and delivery (operations and technology). Operating model vs Business model The Business Model is about the stakeholders, the value proposition to customers, the cost and revenue streams. Whereas, the operating model is about the delivery of the value through defining the value chains and how the organisation supports those value chains. What is the purpose of an operating model? An operating model is a visual representation of how a company runs. It includes everything from how the company sources its products to how it structures its business areas and departments. An operating model serves as a blueprint for executing your strategy. What are capabilities in an operating model? The Operating Model Design process hinges on an understanding of business capability. Business capabilities represent the natural groupings of people, process information and technology resources that enable an organisation with the 'abilities' required to deliver services and achieve goals. Unit II (3 Hours) Understanding the Go to market strategy and Value Chain Supply Case Study A go to market strategy is a tactical action plan that outlines the steps necessary to succeed in a new market or with a new customer. It can apply to pretty much anything, from launching new products and services, to re-launching your company or brand, or even moving a current product into a new market. A go-to-market (GTM) strategy is a plan that helps you define your ideal customers, coordinate your messaging, and position your product for launch. A GTM strategy also keeps key business units aligned on the same plan, allowing you to meet a market need and effectively iterate on your product. Who needs a go-to-market strategy? Anyone who finds themselves in the following 3 situations needs a GTM strategy: Launching a new product in an existing market Launching an existing product in a new market Testing a new product's market for growth This is relevant for individuals and companies in the B2B space. Why do you need a go-to-market strategy? GTM strategies provide the information companies need to effectively position themselves against competitors, create scalable inbound and outbound models, and leverage appropriate tactics to achieve their goals. Launches usually fail when businesses assume a market need for a product and invest in its development without gathering this information. What are the different types of go-to-market strategy? There are the 2 main types of GTM strategy - Product-led and sales-led A product-led GTM strategy uses the product itself to acquire and retain users. In this approach, the product serves as a salesperson by providing so much value, the user can't help but upgrade their package. On the other hand, a sales-led GTM strategy uses marketing to drum up interest for a product, capturing it in content and demo forms. Salespeople then reach out to those prospects, with the goal of converting them into customers. 6 steps to building a go-to-market strategy 1 - Defining your ICP An ideal customer profile is defined as the type of company that would benefit the most from your product or service. Companies that fit your ICP are most likely to buy and continue to use your product, making them extremely important for business growth. 2 - Researching your competitors Competitive research involves identifying your competitors, evaluating their strengths and weaknesses and evaluating the strengths and weaknesses of their products and services. 3 - Developing your messaging Communicating the value of your product or service to your ICP in a way that resonates with their pain points. And to be able to do this, you need to speak their language. 4 - Setting targets Marketing, Budget and Profit 5 - Choosing your tactics A tactic is a conceptual action or short series of actions with the aim of achieving a short-term goal. This action can be implemented as one or more specific tasks. Data Marketing strategy Content Plan Partnerships 6 - Providing feedback 🤝 Establishing a feedback loop between marketing, sales and product development will make sure the key learnings from your GTM strategy are actioned. Value Chain Supply “The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer. The value chain is a process in which a company adds value to its raw materials to produce products eventually sold to consumers. The supply chain represents all the steps required to get the product to the customer. ***A supply chain is a network of participants that manufacture and distribute a product or service at the right time, place, and price. The channel partners include supplier, producer, wholesaler, distributor, vendor, retailer, and the customer. Supply Chain vs Value Chain - Particulars Supply Chain Value Chain Involves businesses, persons, and Involves activities to analyze activities for the procurement, customers, plan the production, Definition logistics, transformation, and and add value at each step of the delivery of finished goods process Process Operational management Business management Facilitates production and Activities Adds value to the product distribution of the product Begins with the customer request Start with the product request and Order and concludes with the product ends with the product delivery development Objective Offers customer satisfaction Provides a competitive advantage Order processing, procurement, Research, logistics, production, assembly, innovation, development, testing, Key Steps marketing, distribution, delivery, packaging, sales and marketing, and customer support and after-sales services Unit III (6 Hours) Preparing Lean Canvas: Business Model for pitching ideas to investors The Business Model Canvas is a strategic management template used for developing new business models and documenting existing ones. It offers a visual chart with elements describing a firm's or product's value proposition. infrastructure, customers, and finances,[assisting businesses to align their activities by illustrating potential trade-offs. The nine "building blocks" of the business model design template that came to be called the Business Model Canvas were initially proposed in 2005 by Alexander Osterwalder, based on his earlier work on business model ontology. Since the release of Osterwalder's work around 2008,new canvases for specific niches have appeared. How to make a pitch for investors ? Creating a successful pitch starts with a thorough business plan. From there it’s up to you to identify what makes your business valuable and worth investing in. 1. Create a presentation First, take the time to put together your pitch deck. The goal is to create a deck that is easy for you to work off of and gets investors excited about your business. Keeping that in mind, you should have a short version that you can speak to within 10-minutes as well as an extended version that includes everything you’d like to give potential investors access to. 2. Practice your pitch You need to practice your pitch. Not being able to quickly speak to each element of your business makes every other tip on this list virtually useless. Too many entrepreneurs think that just by knowing their business they can quickly and succinctly explain its’ value. And having a killer pitch deck with eye-popping visuals will be enough to fall back on. So they go into pitch meetings unprepared. 3. Outline the problem with a story Begin your pitch with a compelling story. It should address the problem you’re solving in the marketplace. This will engage your audience right out of the gate. And if you’ve done any testing try to include actual data here. 4. Your solution Share what’s unique about your product and how it will solve the issue you shared in the previous slide. Keep it short, concise, and easy for the investor to explain to others. Avoid using buzzwords unless your investors are very familiar with your industry. 5. Your target market Don’t say that everyone in the world is potentially your target market, even if it could be true one day. 6. Your revenue or business model How will you make money? Be very specific about your products and pricing and emphasize again how your market is anxiously awaiting your arrival. 7. Your successes: Early traction and milestones Early in the presentation, you want to build some credibility. Take some time to share the relevant traction you’ve made. This is your opportunity to blow your own horn. Impress the investors with what you and your team have accomplished to date (sales, contracts, key hires, product launches, and so on). Unit IV (8 Hours) Practice Venture: Building a business using design thinking The process of redefining problems, understanding the challenges faced by users, and coming up with an innovative solution is known as design thinking. Leading global brands have implemented design thinking into their processes, and that has helped them in achieving greater success. It is a solution-based approach, and can be looked at as ‘thinking out of the box’. As an entrepreneur, it is crucial to understand the market and learn whether your product or service will be helpful to the customers or not. As someone who is starting a new business venture, you must consider the customer’s needs and design your brand accordingly. Innovation is the driving force of entrepreneurship. “Design is not just what it looks like and feels like. Design is how it works” – Steve Jobs Through the design thinking process, we first work on breaking down the business problem into smaller aspects and then start thinking from the base level to come up with various solutions. Solutions are compared with each other, and depending on the situation, the most suitable solution is selected. Design thinking thus involves understanding the target users in an empathetic manner. The five primary steps that an entrepreneur must remember are: Empathizing – with the customers. Defining – the challenges, needs, and wants. Forming Ideas – different approaches are taken to come up with solutions for the problem. Prototyping – products are made based on the different approaches Testing – here the prototypes are tested and the faults plus benefits of the products are carefully studied Why do entrepreneurs need design thinking? A majority of the entrepreneurs that get effective growth have added innovation in their businesses. Here’s how it can help them, and why it is necessary to follow a design thinking process. 1. Long-term strategy planning Issues that are complex, hard to define, unique, and have unknown consequences need to be defined. Problems such as poverty eradication, sustainability, healthcare, and education are examples of wicked problems. As an entrepreneur, it is important as part of your long term planning and business strategy to consider these aspects as well. In the design thinking process, we often ask questions about how one might be able to solve these problems in the future. It encourages innovation and helps in the ideation session. Taking out time to set goals and how to overcome any shortcomings is key to becoming a successful entrepreneur. 2. Allows divergent thinking Design thinking follows an approach that allows divergent and convergent thinking. This is typically associated with imaginative thinking, originality, curiosity, and exploring various possible outcomes. Convergent thinking revolves around bringing these ideas together to come up with a single solution. Design thinking allows you, as an entrepreneur, to follow different thinking styles and explore open-ended options to come up with an actionable solution. Design thinking tools such as empathy are great for this. Prototyping also plays an integral role in this aspect. 3. Incorporate a process model Incorporating a design thinking process can help you track and measure your progress and outcomes. It also allows you to evaluate feedback from various entrepreneurial activities. There are multiple ways to do so, but the design thinking process follows a systematic process that consists of five steps. Empathize, define, ideate, prototype, and test. Following this process as an entrepreneur can help with creating a framework and timeline to be followed. 4. Be curious and observe Design thinking is all about observation. Being curious as to how things are, why they are a certain way, and trying to come up with solutions to this curiosity is what makes you as an entrepreneur very unique. It will eventually build empathy in you and that is one of the key aspects of design thinking. Future of Design Thinking With room for innovation, entrepreneurs can achieve success by adopting design thinking practices. Thinking out of the box and coming up with new ideas requires focus, investment, and more importantly, methodology. And design thinking will help you achieve just that. Your risk factors will also be calculated under design thinking. It is a surely assured path to success and can assist any entrepreneur to stay connected and relevant to the changing market. THANK YOU