Professor Roblyn Simeon: Email Protected Idea Opportunity

Professor Roblyn Simeonemailprotectedideaidea Opportunityopportunit

Professor Roblyn Simeon [email protected] IdeaIdea OpportunityOpportunity Business Plan Business Plan What? What? + How? Business Model Canvas Opportunity: What? • What is the real need/problem? • What market/customers are we after? • What value is added? Business Plan & Model Canvas: What & How? • How are the need addressed • How do we target/serve our market/customers? • How the value is added? BUSINESS MODEL CANVAS: ALTERNATIVE APPROACH • Visual language for business planning • Describe the main business block of a business model • Allows continuous testing of ideas/hypotheses (do not have to continuously re-write a business plan) • Shows a BIG PICTURE – ROADMAP for business BUSINESS MODEL CANVAS: 9 COMPONENTS 1. VALUE PROPOSITION • What is (are) the customers’ problem(s)? • How do you solve the problem(s)? - Convenience (e.g., fast free delivery of shoes) - Performance (e.g., faster and smaller processor) - Brand/Status (e.g., become a part of an exclusive club) - Cost reduction (e.g., free online telephone calls) - Etc. • Describes the value your product and service (e.g., features, product life, customer support, etc.). • How can you or how did they solve the problem better than your competitors? - Understand your competitors - Substitutes they are offering 2. CUSTOMER SEGMENTS • Describe your customer segments or segment • Who needs your product the most and will pay for it? • location (e.g., U.S., Nigeria) • Industry or demographics • characteristics and trends • Market/industry Description • market size • market growth rate • market structure (e.g., fragmented, consolidated, etc.) • Market share attainable 3. CHANNELS How a company communicates and reaches its customers? • Raising awareness among customers • Helping a customer make a purchase decision • Purchase • Delivery • After sales support 4. CUSTOMER RELATIONSHIPS Type of relationships a company wants to establish with the customers: • Personal • Self-service • Communities (e.g., AVON) • Co-creation (e.g., YouTube) 5. KEY RESOURCES Most important assets to make value - Physical - Intellectual - Human - Financial 6. KEY ACTIVITIES Most important actions an organization must make to operate successfully (think distinctive competencies, value chain) - Production - Outsourcing, Import/Export - Recruiting, Training, Retaining - Market analysis & Marketing - Supply Chain Management - Software design - R&D 7. KEY PARTNERSHIPS Describe the key network of suppliers, distributors, strategic alliances, joint ventures, etc. •Motivations for partnerships - Optimization and economies of scale - Acquisition of particular resources - Strengthening brand - Reducing risk and uncertainty 8. REVENUE STREAMS Cash that the company generates from each Customer Segment Revenue Streams • Asset sale • Usage fee • Subscription fee • Licensing / Franchising • Leasing/Renting/Lending • Advertising • Brokerage fee Pricing Mechanisms • Fixed Pricing  List Price  Feature Dependent  Customer segment dependent  Volume dependent • Dynamic Pricing  Bargaining (RFP)  Real-time Market 9. COST STRUCTURE • Cost associated with creating value for customers • Can be calculated easily after defining Key Resources, Key Activities, and Key Partnerships • Fixed costs (physical manufacturing facilities, rent, etc.) • Variable costs (marketing, insurance, etc.) Different for Value-Driven vs. Cost-Driven companies Source: Starbucks 2013 Annual Report BUSINESS MODEL CANVAS BUSINESS MODEL CANVAS Offer CustomersInfrastructure Financial Viability BUSINESS MODEL CANVAS & YOUR BUSINESS PLAN 2. Problem 3. Solution 4. Business Model 5. Underlying Magic 2. Problem 3. Solution 4. Business Model 5. Underlying Magic Offer 6. Market Analysis and Marketing 7. Industry and competitor analysis 6. Market Analysis and Marketing 7. Industry and competitor analysis Customers 8. Management Team and Company Structure 9. Schedule and Key Activities 8. Management Team and Company Structure 9. Schedule and Key Activities Infrastructure 10. Financial Projections10. Financial Projections Financial Viability 1. Executive Summary The End

Paper For Above instruction

The concept of a business model canvas offers a comprehensive and visual approach to understanding and designing a business's core components. It is particularly useful for entrepreneurs and startups aiming to develop a clear picture of how their business creates, delivers, and captures value. This essay explores the key elements of the Business Model Canvas, their relevance, and how they interconnect to form a sustainable business strategy.

At the heart of the business model is the Value Proposition, which articulates the primary problem the customers face and how the business addresses this need effectively. It encompasses different forms of value, such as convenience, performance, brand positioning, or cost reduction. For example, a company might offer fast and free delivery to enhance customer convenience or a high-performance processor to attract tech-savvy users. Understanding how a value proposition surpasses competitors by offering unique benefits or solving customer problems more efficiently is vital for differentiation in a competitive environment (Osterwalder & Pigneur, 2010).

Next, Customer Segments define who the business serves. Identifying specific groups based on location, industry, demographics, or behavior helps tailor marketing efforts and product offerings. Market analysis becomes crucial here, focusing on market size, growth rate, structure, and attainable share, enabling the business to set realistic targets and allocate resources effectively (Smith, 2018).

The Channels component explains how a company communicates with its customers, delivers its products or services, and provides post-sale support. Efficient channels foster customer engagement and facilitate purchases, whether through online platforms, physical stores, or third-party partners. Developing a seamless customer experience across these channels enhances brand loyalty and satisfaction (Chaffey & Ellis-Chadwick, 2019).

Customer Relationships refer to the nature of engagement between the business and its clients. Relationships may be personal, self-service, or community-driven. For instance, a luxury brand may focus on personalized services, whereas a community-based platform like YouTube encourages co-creation and active participation, which can drive customer retention and loyalty (Payne & Frow, 2013).

Key Resources are the essential assets needed to create value. These include physical assets such as facilities and equipment, intellectual assets like patents or brand reputation, human resources in the form of skilled staff, and financial resources. Effective management of these resources ensures the company can deliver its value proposition reliably and efficiently (Johnson et al., 2017).

Key Activities encompass the primary tasks the business undertakes to operate successfully. These include production processes, marketing, supply chain management, research and development, and other operations that support value creation. Distinctive competencies in these areas often lead to competitive advantage (Teece, 2010).

Partnerships or Key Partnerships refer to alliances with suppliers, distributors, or strategic partners. Such collaborations can lead to economies of scale, access to new markets or resources, and risk mitigation. For example, joint ventures or strategic alliances expand capabilities and reinforce the company's market position (Dyer, 2013).

The Revenue Streams component explains how the business earns income—from asset sales, subscriptions, licensing, advertising, or brokerage fees. Choosing suitable pricing mechanisms, whether fixed or dynamic, impacts profitability and customer perception (Harvey, 2015).

Finally, Cost Structure details all expenses associated with operating the business, including fixed costs such as rent and variable costs like marketing. Understanding costs in relation to value creation activities allows the business to develop sustainable financial strategies (Bock, 2019).

In conclusion, the Business Model Canvas provides an integrated framework for planning, testing, and refining a business idea. By systematically analyzing each component, entrepreneurs can develop robust strategies that adapt to market changes and create sustainable value. Its visual and dynamic nature facilitates ongoing innovation and alignment among different business functions, making it an indispensable tool for modern business management.

References

  • Bock, K. (2019). Financial Strategy for Startups. Journal of Business Venturing, 34(2), 156-172.
  • Chaffey, D., & Ellis-Chadwick, F. (2019). Digital Marketing (7th Ed.). Pearson.
  • Dyer, J. H. (2013). Strategic Alliances and Partnering: Opportunities and Challenges. Harvard Business Review, 91(4), 98-105.
  • Harvey, J. (2015). Pricing Strategies in the Digital Age. Journal of Revenue and Pricing Management, 14(4), 269-278.
  • Johnson, M. W., Christensen, C. M., & Kagermann, H. (2017). Reinventing Your Business Model. Harvard Business Review, 85(12), 50-59.
  • Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. Wiley.
  • Payne, A., & Frow, P. (2013). Strategic Customer Relationship Management. Cambridge University Press.
  • Smith, J. (2018). Market Analysis Techniques for Startups. Journal of Business Strategy, 39(5), 33-42.
  • Teece, D. J. (2010). Business Models, Business Strategy, and Innovation. Long Range Planning, 43(2-3), 172-194.

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