Business Model Canvas PDF

Business Model Canvas Dr. Hamed Al Nuaimi Mr. Mohsin Al Abri Definition of Business Model A business model describes the rationale of how an organization creates, delivers, and captures value. The 9 Building Blocks What is Business Model? Behind that...

Business Model Canvas Dr. Hamed Al Nuaimi Mr. Mohsin Al Abri Definition of Business Model A business model describes the rationale of how an organization creates, delivers, and captures value. The 9 Building Blocks What is Business Model? Behind that KEY question is a lineup of other questions: Who's your target customer? What customer problem do you solve? What value do you deliver? How will you reach, acquire, and keep customers? How will you define and differentiate your offering? How will they define and differentiate your offering? How will you generate revenue? How will you generate profit? What's your cost structure? How will you scale? WHAT IS A BMC? LINK VIDEO: https://www.youtube.com/watch?v=QoAOzMTLP5s https://www.youtube.com/watch?v=1ZwHcfgwmS0 The Benefits of BMC https://blog.logrocket.com/product-management/what-is-a-business-model-canvas-overview- template/#customersegments The Benefits of BMC More effective than traditional models due to focused objectives. Directs efforts towards key impact areas for strategy. Simplified and straightforward, avoiding wasted time. Helps entrepreneurs track startup progress. Provides a blueprint for strategic vision and adjustment. The Benefits of BMC Simplifies understanding of organization's goals for new employees. Clarifies value proposition, customer base, and revenue, reducing failure risk. Ensures accurate execution, avoiding costly mistakes. Versatile for any business type. This Photo by Unknown Author is licensed under CC BY-NC-ND 1st Block: Customer Segments Start with Customer Segmentation in Business Canvas Model. It enables organisations to identify the target market, evaluate, and focus on a particular demographic as prospective clients. Divides customers based on variables such as: Demographic Geographic Psychographic Behavioural 1st Block: Customer Segments Demographic : e.g age, gender, income level, education level, occupation, family size. Geographic : continent, region, country, climate, rural, urban Psychographic : lifestyle, social class, personality traits. Behavioural: purchasing behaviour, usage rate, benefits sought, etc. 1st Block: Customer Segments Demographic Geographic Psychographic Behavioural age Continent Lifestyle Usage rate gender Region Social class Purchasing income level Country Personality behaviour occupation Climate trait Benefits family size Rural/urban sought Why is customer segmentation important?
Effective messaging Improved products Improved customer targeting Higer returns on marketing investments This Photo by Unknown Author is licensed under CC BY-NC Market Targeting https://en.hocmarketing.org/photos/detail-image-4/market-targeting-strategies.jpg Target Market (the customer segment) For whom are you creating value? Who are your most important customers? Is your customer base a Mass Market, Niche Market, Segmented Market, Micro Market? This Photo by Unknown Author is licensed under CC BY-SA 2nd Block: Value Propositions - It is a clear statement that explains how the offering solves customers' problems or improves their situation, delivers specific benefits, and tells the ideal customer why they should buy from you and not from the competition. - clearly highlights the things that makes your offering different from your competition. 2nd Block: Value Propositions - The offering either provides a value-added solution (product or service) to an established challenge encountered by a specific consumer segment. 2nd Block: Value Propositions A successful value proposition has several components: Innovation Disruption Attractive features Attributes 2nd Block: Value Propositions For Example, when introducing a novel product or concept, it is crucial that it shows significant innovation to attract attention and offer a unique benefit. In contrast, when providing an existing service or product in the market, additional features must be incorporated to entice consumers to choose your offering over competitors. How to write a value proposition https://blog.hubspot.com/marketing/write-value-proposition#elements Elements of value propositions Newness Performance Personalization Price Cost reduction Risk Reduction Accessibility This Photo by Unknown Author is licensed under CC BY-NC-ND Things to be considered when designing value propositions
Technology Changes happening within their respective industries Determine their product/service's target market. Understand their requirements, pains, wants, and interaction preferences. Value Propositions What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying?  Channels Distribution channels refer to the various methods that a company uses to reach out to its customers and build a relationship with them. Phases of the distribution channel Awareness Evaluation Purchase Delivery Aftersales Forms and Types of Channels  Forms of channels: Direct distribution channel Indirect distribution channels Hybrid Distribution Channel  Types of channels: Personal sales Social Media platforms Internet, Websites Applications Telephone Traditional and electronic mail Retailers How to Choose the Right Channel? According to company goals Be practical Understand the natural partners Minimize conflict Channels Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? This Photo by Unknown Author is licensed under CC BY Customer Relationships  Customers are an important part of the Business Model Canvas since it shows how a company will connect with them and keep them.  Different communication channels can build strong consumer relationships based on the target market. People targeting younger populations may utilise social media or digital channels to build loyalty, while those targeting older demographics employ direct mail, email updates, and phone calls. Strategies for customer relationship marketing:
Content marketing Email marketing Social media marketing Customer retention Reducing pain Offering extra benefits This Photo by Unknown Author is licensed under CC BY-SA Importance of customer relationships
Understanding their requirements Establishing strong bonds Referrals Improve Customer satisfaction This Photo by Unknown Author is licensed under CC BY-NC Customer Relationships What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? Revenue Streams Refers to how a company generates money by offering its products or services to its customers. This section of BMC outlines how businesses or entrepreneurs will generate revenue from their value propositions. How to choose your revenue streams?
Choose the most realistic stream Extend your value Attract the right investors Be flexible  Revenue Streams For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
TYPES: Asset sale, Usage fee, Subscription Fees, Lending/Renting/Leasing, Licensing, Brokerage fees, Advertising
FIXED PRICING: List Price, Product feature dependent, Customer segment dependent, Volume dependent
DYNAMIC PRICING: Negotiation (bargaining), Yield Management, Real-time-Market Key Resources Key Resources is a section of the business model canvas that highlights the resources required to carry out the key activities to build an effective and profitable value proposition. Types of key resources: Tangible resources include people, location, and other inputs needed to deliver a company's value proposition. Non-physical intangibles are useful yet hard to define. Intellectual property includes trademarks, patents, copyrights, proprietary knowledge, databases, and more. How to Determine Key Resources 1) What key resources are needed? 2) What resources must our marketing and distribution channels have access to? 3) What key assets are needed to maintain our customer relationships? 4) How can these resources contribute to our revenue generation? Key Resources What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships Revenue Streams?
TYPES OF RESOURCES: Physical, Intellectual (brand patents, copyrights, data), Human, Financial Key Activities Refer to the working components of a business that ensure it remains KEY ACTIVITIES competitive and profitable in the market. Categorize of key activities: Production Problem –solving Platform/Network Research and development Update existing products Quality check Innovation Market research Key Activities What Key Activities do our Value Propositions KEY ACTIVITIES require? Our Distribution Channels? Customer Relationships? Revenue streams?
CATEGO RIES: Production, Problem Solving, Platform/Network Key Partners  Refers to external companies and suppliers that assist a business in performing its core operations/key activities.  Key partners play an essential role in reducing risks, increasing opportunities, and therefore gaining resources. Types of Key Partners Supplier Non-competitors Joint ventures Key Partners Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?
Cost Structure  All expenditures involved in running your business model.  includes costs related to producing or delivering value propositions, developing revenue streams, and maintaining customer relationships.  It is important to identify these costs as they will help you better understand how your overall business model works. Importance of Cost Structure Keep track of expenses Analyse their performance Make Decisions Cost Structure What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
Cost Structure
IS YOUR BUSINESS MORE: Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing), Value Driven (focused on value creation, premium value proposition).
Cost Structure
SAMPLE CHARACTERISTICS: Fixed Costs (salaries, rents, utilities), Variable costs This Photo by Unknown Author is licensed under CC BY-SA Activity 1: Create your own business model KEY KEY VALUE CUSTOMER CUSTOMER PARTNERS ACTIVITIES PROPOSITIONS RELATIONSHIPS SEGMENTS > establish and manage the target customer relationship between the segment here>> customer and your brand here>> KEY RESOURCES CHANNELS plan to acquire customers, 2) how you plan to deliver your value proposition to them and 3) how you plan to communicate with your customers >> COST STRUCTURE REVENUE STREAMS > > References Osterwalder, A., & Pigneur, Y. (2010). Business model generation. John Wiley & Sons  CONTACT INFORMATION: Name of the Staff : Ms.Jawaher Alhajri Office:: BS123 Email:[email protected] VERSION HISTORY Version No Date Approved Changes incorporated 01 Sem. (I) 2023/2024 48