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Business model “A business model describes the rationale of how an organization creates, delivers, and captures value”. Key Partners which partners. Business model elements in different types of organization in software business 141 research as the goal is to compare how the elements are recognized in differing types of software business organizations. The business model concept has been studied in various business areas – like health-care 5, airline business 6. Apr 22, 2015  When creating a business model, select key partners, like suppliers, strategic alliances or advertising partners. Using the previous example of Home Depot, key business partners. The Business Model Canvas (BMC) gives you the structure of a business plan without the overhead and the improvisation of a ‘back of the napkin’ sketch without the fuzziness (and coffee rings). The Canvas has nine elements: Together these elements provide a pretty coherent view of a business’ key drivers–.

1. Business Model Generation Organization Elements Key Partners Example Sample
2. Business Model Generation Organization Elements Key Partners Examples

Business Model Canvas is a strategic management and lean startup template for developing new or documenting existing business models.^[1][2] It is a visual chart with elements describing a firm's or product's value proposition, infrastructure, customers, and finances.^[3] It assists firms in aligning 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^[4] based on his earlier work on business model ontology.^[5] Since the release of Osterwalder's work around 2008,^[6] new canvases for specific niches have appeared.

Description[edit]

Formal descriptions of the business become the building blocks for its activities. Many different business conceptualizations exist; Osterwalder's 2004 thesis^[5] and coauthored 2010 book^[3] propose a single reference model based on the similarities of a wide range of business model conceptualizations. With his business model design template, an enterprise can easily describe its business model. Osterwalder's canvas has nine boxes; the name of each is given in bold below. Descriptions below are based largely on the 2010 book Business Model Generation.^[3]

• Infrastructure
  • Key Activities: The most important activities in executing a company's value proposition. An example for Bic, the pen manufacturer, would be creating an efficient supply chain to drive down costs.
  • Key Resources: The resources that are necessary to create value for the customer. They are considered assets to a company that are needed to sustain and support the business. These resources could be human, financial, physical and intellectual.
  • Partner Network: In order to optimize operations and reduce risks of a business model, organizations usually cultivate buyer-supplier relationships so they can focus on their core activity. Complementary business alliances also can be considered through joint ventures or strategic alliances between competitors or non-competitors.
• Offering
  • Value Propositions: The collection of products and services a business offers to meet the needs of its customers. According to Osterwalder (2004), a company's value proposition is what distinguishes it from its competitors. The value proposition provides value through various elements such as newness, performance, customization, 'getting the job done', design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability.
    • The value propositions may be:
      • Quantitative – price and efficiency
      • Qualitative – overall customer experience and outcome
• Customers
  • Customer Segments: To build an effective business model, a company must identify which customers it tries to serve. Various sets of customers can be segmented based on their different needs and attributes to ensure appropriate implementation of corporate strategy to meet the characteristics of selected groups of clients. The different types of customer segments include:
    • Mass Market: There is no specific segmentation for a company that follows the Mass Market element as the organization displays a wide view of potential clients. e.g. Car
    • Niche Market: Customer segmentation based on specialized needs and characteristics of its clients. e.g. Rolex
    • Segmented: A company applies additional segmentation within existing customer segment. In the segmented situation, the business may further distinguish its clients based on gender, age, and/or income.
    • Diversify: A business serves multiple customer segments with different needs and characteristics.
    • Multi-Sided Platform / Market: For a smooth day-to-day business operation, some companies will serve mutually dependent customer segments. A credit card company will provide services to credit card holders while simultaneously assisting merchants who accept those credit cards.
  • Channels: A company can deliver its value proposition to its targeted customers through different channels. Effective channels will distribute a company's value proposition in ways that are fast, efficient and cost-effective. An organization can reach its clients through its own channels (store front), partner channels (major distributors), or a combination of both.
  • Customer Relationships: To ensure the survival and success of any businesses, companies must identify the type of relationship they want to create with their customer segments. That element should address three critical steps on a customers relationship: How the business will get new customers, how the business will keep customers purchasing or using its services and how the business will grow its revenue from its current customers. Various forms of customer relationships include:
    • Personal Assistance: Assistance in a form of employee-customer interaction. Such assistance is performed during sales and/or after sales.
    • Dedicated Personal Assistance: The most intimate and hands-on personal assistance in which a sales representative is assigned to handle all the needs and questions of a special set of clients.
    • Self Service: The type of relationship that translates from the indirect interaction between the company and the clients. Here, an organization provides the tools needed for the customers to serve themselves easily and effectively.
    • Automated Services: A system similar to self-service but more personalized as it has the ability to identify individual customers and their preferences. An example of this would be Amazon.com making book suggestions based on the characteristics of previous book purchases.
    • Communities: Creating a community allows for direct interactions among different clients and the company. The community platform produces a scenario where knowledge can be shared and problems are solved between different clients.
    • Co-creation: A personal relationship is created through the customer's direct input to the final outcome of the company's products/services.
• Finances
  • Cost Structure: This describes the most important monetary consequences while operating under different business models. A company's DOC.
    • Classes of Business Structures:
      • Cost-Driven – This business model focuses on minimizing all costs and having no frills. e.g. Low-cost airlines
      • Value-Driven – Less concerned with cost, this business model focuses on creating value for products and services. e.g. Louis Vuitton, Rolex
    • Characteristics of Cost Structures:
      • Fixed Costs – Costs are unchanged across different applications. e.g. salary, rent
      • Variable Costs – Costs vary depending on the amount of production of goods or services. e.g. music festivals
      • Economies of Scale – Costs go down as the amount of goods are ordered or produced.
      • Economies of Scope – Costs go down due to incorporating other businesses which have a direct relation to the original product.
  • Revenue Streams: The way a company makes income from each customer segment. Several ways to generate a revenue stream:
    • Asset Sale – (the most common type) Selling ownership rights to a physical good. e.g. retail corporations
    • Usage Fee – Money generated from the use of a particular service. e.g. UPS
    • Subscription Fees – Revenue generated by selling access to a continuous service. e.g. Netflix
    • Lending/Leasing/Renting – Giving exclusive right to an asset for a particular period of time. e.g. Leasing a Car
    • Licensing – Revenue generated from charging for the use of a protected intellectual property.
    • Brokerage Fees – Revenue generated from an intermediate service between 2 parties. e.g. Broker selling a house for commission
    • Advertising – Revenue generated from charging fees for product advertising.

Application[edit]

The Business Model Canvas can be printed out on a large surface so groups of people can jointly start sketching and discussing business model elements with post-it note notes or board markers. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis.^[7] It is distributed under a Creative Commons license^[8] from Strategyzer AG and can be used without any restrictions for modeling businesses.

The Business Model Canvas is also available in web-based software format.

Alternative forms[edit]

The Business Model Canvas has been used and adapted to suit specific business scenarios and applications.^[9][10][11] Examples include:

Criticism[edit]

The Business Model Canvas was characterized as static because it does not capture changes in strategy or the evolution of the model.^[12] Some limits of the template are its focus on organizations and its consequent conceptual isolation from its environment, whether this is related to the industry structure^[13] or to stakeholders such as society and natural environment.^[14][15]

See also[edit]

References[edit]

1. ^Barquet, Ana Paula B., et al. 'Business model elements for product-service system'. Functional Thinking for Value Creation. Springer Berlin Heidelberg, 2011. 332–337: They stated that 'The Canvas business model was applied and tested in many organizations (eg IBM and Ericsson), being successfully used to easily describe and manipulate business models to create new strategic alternatives.'
2. ^De Reuver, Mark, Harry Bouwman, and Timber Haaker. 'Business model roadmapping: A practical approach to come from an existing to a desired business model'. International Journal of Innovation Management 17.01 (2013): They described the business model canvas as the 'Most prominent.. popular tool that makes it simple for practitioners to design business models in a creative session.'
3. ^ ^abcOsterwalder, Alexander; Pigneur, Yves; Clark, Tim (2010). Business Model Generation: A Handbook For Visionaries, Game Changers, and Challengers. Strategyzer series. Hoboken, NJ: John Wiley & Sons. ISBN9780470876411. OCLC648031756. With contributions from 470 practitioners from 45 countries.
4. ^Osterwalder, Alexander (2005-11-05). 'What is a business model?'. business-model-design.blogspot.com. Archived from the original on 2006-12-13. Retrieved 2019-06-19. .. we could define a business model as a simplified description of how a company does business without having to go into the complex details of all its strategy, processes, units, rules, hierarchies, workflows, and systems. However, now that we know that the business model is a simplified representation of how we do business, we still have to decide which elements to describe. A synthesis of literature shows that there are mainly 9 building blocks to help us describe a business model ..
5. ^ ^abOsterwalder, Alexander (2004). The Business Model Ontology: A Proposition In A Design Science Approach(PDF) (Ph.D. thesis). Lausanne: University of Lausanne. OCLC717647749. See also: Osterwalder, Alexander; Pigneur, Yves; Tucci, Christopher L. (2005). 'Clarifying business models: origins, present, and future of the concept'. Communications of the Association for Information Systems. 16 (1): 1. doi:10.17705/1CAIS.01601.
6. ^Osterwalder, Alexander (2008-07-02). 'What is a business model?'. business-model-design.blogspot.com. Archived from the original on 2008-09-06. Retrieved 2018-10-17.
7. ^'Business Models: Do the right thing'. blog.bizzdesign.com. Archived from the original on 2015-04-02. Retrieved 2015-03-28.
8. ^'Can I use the Business Model Canvas or Value Proposition Canvas in my own teachings or public projects?'. support.strategyzer.com. Retrieved 2015-03-22.
9. ^'Business Model Canvas for User Experience'. grasshopperherder.com. 2012-06-19. Retrieved 2012-06-20.
10. ^'Lean Model Canvas vs. Business Model Canvas'. practicetrumpstheory.com. Archived from the original on 2014-04-26. Retrieved 2014-04-25.
11. ^'Internal Communication Canvas'. eee.do. 2016-04-28. Retrieved 2016-05-28.
12. ^Sinkovics, Noemi; Sinkovics, Rudolf R.; Yamin, Mo (2014). 'The Role of Social Value Creation in Business Model Formulation at the Bottom of the Pyramid – Implications for MNEs?'. International Business Review. 23 (4): 692–707. doi:10.1016/j.ibusrev.2013.12.004.
13. ^Searle, Nicola; White, Gregor (2013). Towse, Ruth; Handke, Christian (eds.). 'Business Models'. In Handbook on the Digital Creative Economy. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing: 45–56. doi:10.4337/9781781004876.00014. ISBN9781781004876.
14. ^Bocken, N.M.P.; Rana, P.; Short, S.W. (2015). 'Value mapping for sustainable business thinking'. Journal of Industrial and Production Engineering. 32 (1): 67–81. doi:10.1080/21681015.2014.1000399.
15. ^Sparviero, Sergio (2019). 'The Case for a Socially Oriented Business Model Canvas: The Social Enterprise Model Canvas'. Journal of Social Entrepreneurship. 10 (2): 232–251. doi:10.1080/19420676.2018.1541011.

External links[edit]

• Media related to Business Model Canvas at Wikimedia Commons
• Alexander Osterwalder: Tools for Business Model Generation, a 53-minute video discussing the Business Model Canvas in detail. Stanford Entrepreneurship Corner, 26 January 2012

Business Model Generation Organization Elements Key Partners Example Sample

Creating a business model isn’t simply about completing your business plan or determining which products to pursue. It’s about mapping out how you will create ongoing value for your customers.

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Where will your business idea start, how should it progress, and when will you know you’ve been successful? How will you create value for customers? Follow these simple steps to securing a strong business model.

1. Identify your specific audience.

Targeting a wide audience won’t allow your business to hone in on customers who truly need and want your product or service. Instead, when creating your business model, narrow your audience down to two or three detailed buyer personas. Outline each persona’s demographics, common challenges and the solutions your company will offer. As an example, Home Depot might appeal to everyone or carry a product the average person needs, but the company’s primary target market is homeowners and builders.

The prefered way is to use ssh-copy-id as shown hereAlso, just to stress the fact again, a keypair should always be protected by a passphrase i.e. 'leaving empty for no password' should not be done:Monkeysphere:Personally, I am now using Monkeysphere on top of PKA all the time now because it also solves the problem how to authenticate servers and users. Create ssh key linux. Hi there.Hints:Your howto advices people to use scp to transfer the public key to the remote machine. This often causes permission problems.

Related: The Science of Building Buyer Personas (Infographic)

2. Establish business processes.

Before your business can go live, you need to have an understanding of the activities required to make your business model work. Determine key business activities by first identifying the core aspect of your business’s offering. Are you responsible for providing a service, shipping a product or offering consulting? In the case of Ticketbis, an online ticket exchange marketplace, key business processes include marketing and product delivery management.

3. Record key business resources.

What does your company need to carry out daily processes, find new customers and reach business goals? Document essential business resources to ensure your business model is adequately prepared to sustain the needs of your business. Common resource examples may include a website, capital, warehouses, intellectual property and customer lists.

4. Develop a strong value proposition.

How will your company stand out among the competition? Do you provide an innovative service, revolutionary product or a new twist on an old favorite? Establishing exactly what your business offers and why it’s better than competitors is the beginning of a strong value proposition. Once you’ve got a few value propositions defined, link each one to a service or product delivery system to determine how you will remain valuable to customers over time.

Related: How to Develop and Evaluate Your Startup's Value Proposition

5. Determine key business partners.

No business can function properly (let alone reach established goals) without key partners that contribute to the business’s ability to serve customers. When creating a business model, select key partners, like suppliers, strategic alliances or advertising partners. Using the previous example of Home Depot, key business partners may be lumber suppliers, parts wholesalers and logistics companies.

6. Create a demand generation strategy.

Unless you’re taking a radical approach to launching your company, you’ll need a strategy that builds interest in your business, generates leads and is designed to close sales. How will customers find you? More importantly, what should they do once they become aware of your brand? Developing a demand generation strategy creates a blueprint of the customer’s journey while documenting the key motivators for taking action.

7. Leave room for innovation.

When launching a company and developing a business model, your business plan is based on many assumptions. After all, until you begin to welcome paying customers, you don’t truly know if your business model will meet their ongoing needs. For this reason, it’s important to leave room for future innovations. Don’t make a critical mistake by thinking your initial plan is a static document. Instead, review it often and implement changes as needed.

Keeping these seven tips in mind will lead to the creation of a solid business plan capable of fueling your startup’s success.

Business Model Generation Organization Elements Key Partners Examples

Related: 5 Strategies for Generating Consumer Demand