ITE 323 New Venture Creation Module 7 Student Activity Sheet PDF

Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____...

Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ Lesson title: Business Models Materials: Student module Learning Targets: References: At the end of the module, students will be able to: Barringer, Bruce R. and Ireland, R. 1. List and explain different business models Duane (2019) Entrepreneurship: 2. Identify what business model is used for a Successfully Launching New certain business Ventures, 6th Edition (Global Edition). Pearson. ISBN: 978-1-292-25533-0 reddit.com/r/Entrepreneur Investopedia.com A. LESSON PREVIEW/REVIEW Introduction Welcome back Future New Venture Capitalists! Today we will encounter a few of the many business models that exist in the world. We mentioned in the previous module that we will be discussing the business models. Some of this you are already aware of, you just don’t know how to explain. B. MAIN LESSON Content Notes Business Models As we mentioned before, business models are firm’s plan or recipe for how it creates, delivers, and captures value for its stakeholders. Business models are foundational to a firm’s ability to succeed, both in the short and long term, especially when it is the first one to introduce a new product or service to customers. Business Model and IT This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ IT industry managed to pave a way for a better income in business models. From the rise of advertisements we see almost anywhere in the internet, and increase of subscription type of access to internet contents. Economy through IT has never been better. List of Business Models Here we have a list of business models. Most of these are actually applicable to IT, or better yet used in the IT industry. 1. Advertising From the name itself it gains income from advertisements or ads. Before, ads can be found only on the newspapers, billboards, and television, now you can see them almost anywhere on the internet. Companies pay advertisers such as Youtube to advertise their product or service, from there Youtube gains income. 2. Affiliate The affiliate model uses links embedded in content instead of visual advertisements that are easily identifiable. For example, if you run a movie review website, you could embed affiliate links to Amazon within your reviews that allow people to buy the movie you are reviewing. Amazon will pay you a small commission for every sale that you refer to them. 3. Brokerage Brokerage businesses connect buyers and sellers and help facilitate a transaction. They charge a fee for each transaction to either the buyer or the seller and sometimes both. You gain income from a portion of the sales. A very good example of this are real estate agencies, or the business of selling house and lots. 4. Concierge/Customization Some businesses take existing products or services and add a custom element to the transaction that makes every sale unique for the given customer. For example, there are customization happening at a larger scale with products like Nike’s custom sneakers. 5. Crowdsourcing If you can bring together a large number of people to contribute content to your site/business, then you’re crowdsourcing. Crowdsourcing business models are most frequently paired with advertising This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ models to generate revenue, but there are many other iterations of the model. A good example of this are Patreon users. 6. Disintermediation Disintermediation is when you sidestep everyone in the supply chain and sell directly to consumers, allowing you to potentially lower costs to your customers and have a direct relationship them as well. If you want to make and sell something in stores, you typically work through a series of middlemen to get your product from the factory to the store shelf. Dell is a good example of this. Where you can directly buy parts of a desktop computers from them to be used by you. 7. Fractionalization Instead of selling an entire product, you can sell just part of that product with a fractionalization business model. A good example of this is Disney Vacation Club where they sell just part or one of their vacation home for a limited time for weeks every years. 8. Franchise Franchising is common in the restaurant industry, but you’ll also find it in all sorts of service industries from cleaning businesses to staffing agencies. In a franchise business model, you are selling the recipe for starting and running a successful business to someone else. A very good example of this is Jollibee or 7-11 where they sell all you need to run your own Jollibee or 7-11 branch. 9. Freemium With a freemium business model, you’re giving away part of your product or service for free and charging for premium features or services. Freemium isn’t the same as a free trial where customers only get access to a product or service for a limited period of time. Instead, freemium models allow for unlimited use of basic features for free and only charge customers who want access to more advanced functionality. A very good example of these are recent mobile apps where you can gain an advantage if you spend real money. 10. Leasing Leasing might seem similar to fractionalization, but they are actually very different. In fractionalization, you are selling perpetual access to part of something. Leasing, on the other hand, is This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ like renting. At the end of a lease agreement, a customer needs to return the product that they were renting from you. A very good example of these are rent-a-car businesses. 11. Low-touch With a low-touch business model, companies lower their prices by providing fewer services. The low-touch business model means that customers need to either purchase additional services or do some things themselves in order to keep costs down. A good example of these is IKEA, where you buy a product/furniture, but you are the one who assembles it. 12. Marketplace Marketplaces allow sellers to list items for sale and provide customers with easy tools for connecting to sellers. The marketplace business model can generate revenue from a variety of sources including fees to the buyer or the seller for a successful transaction, additional services for helping advertise seller’s products, and insurance so buyers have peace of mind. The marketplace model has been used for both products and services. The best example for these is our e-commerce websites: Lazada, and Shopee. 13. Pay-as-you-go Instead of pre-purchasing a certain amount of something, such as cell phone minutes or loads, customers get charged for actual usage at the end of a billing period. The pay-as-you-go model is most common in-home utilities. A very good example of this is our water companies, where we are billed for our usage of water. 14. Razor blade The razor blade business model is named after the product that essentially invented the model: sell a durable product below cost to increase volume sales of a high-margin, disposable component of that product. The add-on is continuously bought for profit. From the name itself, a very good example is shaving blade companies such as Gillette. 15. Reverse razor blade Flipping the razor blade model around, you can offer a high-margin product and promote sales of a low-margin companion product. The initial purchase is the big sale where a company makes most This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ of its money. The add-ons are just there to keep customers using the initially expensive product. This is very common in Apple products where people buy newer iPhones, and stays because of the apps. 16. Reverse auction A reverse auction business model turns auctions upside down and has sellers present their lowest prices to buyers. Buyers then have the option to choose the lowest price presented to them. You can see reverse auctions in action when contractors bid to do work on a construction project. You also see reverse auctions anytime you shop for a mortgage or other type of loan. A good example of these are contractual house building. 17. Subscription Subscription business models are becoming more and more common. In this business model, consumers get charged a subscription fee usually monthly, or yearly to get access to a service. While magazine and newspaper subscriptions have been around for a long time, the model has now spread to software and online services and is even showing up in service industries. A good example of these are Netflix, Youtube, and Google services. 18. Access to Excess Similar to Brokerage, but instead of simply connecting buyers and sellers, you’re connecting (and helping create) an excess supply of a service, with buyers. A very good example are Grab Taxi, and AirBNB From the list above, there are a lot of options for us IT on what is our business model. We can make apps that are freemium, subscription, and the most common advertisements. In a later module we will be discussing how companies, small, big, or even Youtubers exactly gain income from advertisements. Skill-building Activities Identification: Identify what business model is mentioned _______________1. Users/Consumers/Customers are charged a certain period of time to gain access to the service. _______________2. The consumer is allowed to use the product for free, but if they wish to have full This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ access to the system they need to pay. _______________3. The add-ons to the product are continuously paid to make use of the full product. _______________4. providing information given from another business/company to promote their product, and you gain profit by sharing this information. _______________5. You simply help a business in selling a product, and you gain a portion of the sales. Essay 1. Compare and Contrast Leasing and Fractionalization 2. Can toys that needs assembly be considered a Low-Touch business model? Explain. Check for Understanding Project Update: Business Models Identify what business model(s) you will use for your project. Enumerate them and explain why you chose these business model. And explain the process on how to does the business model can provide your business profit. Do take note that you can use more than 1 business model. This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ Example: Advertising. The app for monitoring and managing employee performance has banner ads while working. And it has video ads after compiling ang generating a daily/weekly/monthly reports. Freemium. The user can buy the app to remove the ads and use an ad free version of the system. Plus it opens a few features such as exporting the reports as an excel rather than a PDF file. C. LESSON WRAP-UP FAQs 1. Can you have more than 1 business models, or all? More than 1 business model yes, for example Youtube, it can has advertisements, and the same time ask you if you pay for a subscription. Thinking about Learning a) Mark your place in the work tracker which is simply a visual to help you track how much work you have accomplished and how much work there is left to do. Period 1 Period 2 Period 3 1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 b) Think about your learning by filling up “My Learning Tracker”. Write the learning targets, scores, learning experience for the session and deliberately plan for the next session. Date Learning Target/Topic Scores Action Plan What’s the What module # did you do? What were What contributed to the quality or date What were the learning targets? your scores your performance today? What will today? What activities did you do? in the you do next session to maintain activities? your performance or improve it? This document is the property of PHINMA EDUCATION  Course Code: ITE 323 - New Venture Creation Module #7 STUDENT ACTIVITY SHEET Name: _____________________________________________________ Class number: _____ Section: ___________Schedule:_________________________________ Date: ____________ This document is the property of PHINMA EDUCATION