What is a business model? Business model canvas + examples

1. Business model & canvas
Frieda Brioschi / Emma Tracanella
frieda.brioschi@gmail.com / emma.tracanella@gmail.com
IED, 6 Mar 2017
Lesson 2/2017

2. 2. Business Model & Canvas
Course program
1. Start-ups
2. Business Model & Canvas
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3. 2. Business Model & Canvas
Business Model
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4. 2. Business Model & Canvas2. Business Model & Canvas
Business Model /1
A business model describes the rationale of
how an organization creates, delivers, and
captures value (economic, social, cultural, or
other forms of value).
The process of business model construction
is part of business strategy.
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5. 2. Business Model & Canvas2. Business Model & Canvas
Business Model /2
It's a way to represent core aspects of a business,
including purpose, offerings, strategies,
infrastructure, organizational structures, trading
practices, and operational processes and policies.
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6. 2. Business Model & Canvas2. Business Model & Canvas
Business Model /3
The essence of a business model is that it defines the
manner by which the business enterprise delivers
value to customers, entices customers to pay for
value, and converts those payments to profit: it thus
reflects management’s hypothesis about what
customers want, how they want it, and how an
enterprise can organize to best meet those needs,
get paid for doing so, and make a profit.
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7. 2. Business Model & Canvas
Business model canvas
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8. 2. Business Model & Canvas
Business model canvas
1 – Value proposition
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9. 2. Business Model & Canvas
1 – Value proposition
The collection of products and services a business
offers to meet the needs of its customers. It's what
distinguishes itself from its competitors.
It provides value through various elements:
• newness,
• performance,
• customization,
• "getting the job done",
• design,
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http://en.wikipedia.org/wiki/Business_Model_Canvas
• brand/status,
• price,
• cost /risk reduction,
• ecc.

10. 2. Business Model & Canvas
Build the Value Proposition
• Market: for which market is the value proposition being created?
• Value/customer experience: what does the market value most? The
effectiveness of the value proposition depends on gathering real
customer, prospect or employee feedback.
• Offering: which products or services are being offered?
• Benefits: what are the benefits the market will derive from the product
• Alternative e differentiation: which alternative options does the
market have to the product or service?
• Proof: what evidence is there to substantiate your value proposition?
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http://en.wikipedia.org/wiki/Value_proposition

11. 2. Business Model & Canvas
Business model canvas
2 – Customer segments
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12. 2. Business Model & Canvas
2 – Customer segments
A company must identify which customers it tries to serve.
Various set of customers can be segmented based on the different
needs and attributes to ensure appropriate implementation of
corporate strategy meets the characteristics of selected group of
clients.
The different types of customer segments include:
• Mass Market
• Niche Market
• Segmented
• Diversify (multiple customer segments with different needs
and characteristics)
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http://en.wikipedia.org/wiki/Business_Model_Canvas

13. 2. Business Model & Canvas
Business model canvas
3 - Channels
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14. 2. Business Model & Canvas
3 - 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.
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http://en.wikipedia.org/wiki/Business_Model_Canvas

15. 2. Business Model & Canvas
Business model canvas
4 – Customer relationship
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16. 2. Business Model & Canvas
4 – Customer relationship
To ensure the survival and success of any businesses,
companies must identify the type of relationship they
want to create with their customer segments.
• Personal Assistance
• Dedicated Personal Assistance
• Self Service
Automated Services
• Communities
• Co-creation
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http://en.wikipedia.org/wiki/Business_Model_Canvas

17. 2. Business Model & Canvas
Business model canvas
5 – Key partner
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18. 2. Business Model & Canvas
5 – Key partner
In order to optimize operations and reduce
risks of a business model, organization
usually cultivate buyer- supplier relationships
so they can focus on their core activity.
Complementary business alliances also can
be considered through joint ventures,
strategic alliances between competitors or
non-competitors.
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http://en.wikipedia.org/wiki/Business_Model_Canvas

19. 2. Business Model & Canvas
Business model canvas
6 – Key activities
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20. 2. Business Model & Canvas
6 – Key activities
The most important activities in executing a
company's value proposition.
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http://en.wikipedia.org/wiki/Business_Model_Canvas

21. 2. Business Model & Canvas
Business model canvas
7 – Key resources
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22. 2. Business Model & Canvas
7 – Key resources
Are the assets required
to offer and deliver value
proposition to the
customer.
• Physical
• Intellectual
• Human
• Financial
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http://en.wikipedia.org/wiki/Key_resources_(business_model)

23. 2. Business Model & Canvas
Business model canvas
8 – Cost structure
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24. 2. Business Model & Canvas
8 – Cost structure
This describes the most important monetary
consequences while operating under
different business models.
• Fixed Costs
• Variable Costs
• Economies of Scale
• Economies of Scope
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http://en.wikipedia.org/wiki/Business_Model_Canvas

25. 2. Business Model & Canvas
Business model canvas
9 – Revenue streams
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26. 2. Business Model & Canvas
9 – Revenue streams
The way a company makes income from each
customer segment.
• Asset Sale
• Usage Fee
• Subscription Fees
• Lending/Leasing/Renting
• Licensing
• Advertising
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http://en.wikipedia.org/wiki/Business_Model_Canvas

27. 2. Business Model & Canvas
The Business Model You

28. 2. Business Model & Canvas
The Business Model Canvas
During last lesson we discussed what is a business model and how fulfill a
business model canvas, looking into each part:
• Value proposition
• Customer segments
• Channels
• Customer relationship
• Revenue streams
• Key resources
• Key partner
• Key activities
• Cost structure
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1 2
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29. 2. Business Model & Canvas
Nespresso
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http://www.businessmodelcanvas.it/case-studies/nespresso.html

30. 2. Business Model & Canvas
Coca Cola
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http://sopinion8ed.wordpress.com/2012/11/23/the-coca-cola-business-model-and-their-competitive-advantage/

31. 2. Business Model & Canvas
Financial Times
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http://glennas.wordpress.com/2010/07/31/business-model-innovation-alexander-osterwalder/

32. 2. Business Model & Canvas
Facebook
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http://bmimatters.com/2012/04/10/understanding-facebook-business-model/

33. 2. Business Model & Canvas
Twitter
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http://bmimatters.com/2012/02/18/understanding-twitter-business-model-design/
Poll
Analytics

34. 2. Business Model & Canvas
Groupon
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http://www.adriaanrijkens.nl/2011/06/29/the-groupon-business-model-canvas/

35. 2. Business Model & Canvas
LinkedIn
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http://bmimatters.com/
SlideShare

36. 2. Business Model & Canvas
Google
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http://bmimatters.com/2012/04/18/comparing-facebook-and-google-business-models/
Map,
Youtube

37. 2. Business Model & Canvas
Spotify
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ù

38. 2. Business Model & Canvas
Zara
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ù

39. 2. Business Model & Canvas
Community models
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40. 2. Business Model & Canvas
Geographically based
• neighbourhood
• productive district
• close to me
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http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html

41. 2. Business Model & Canvas
Professional community
• All the people making the same job.
• It’s an easy target.
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http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html

42. 2. Business Model & Canvas
Online community
• Easy to reach (massive tools available)
• There’s no clear limits between being part of a
community and a company business (let’s think of
UGC)
• Online users are available to pay for an interesting
service (freemium!)
• Can be created as part of my business (i.e. Amazon’s
bookshops network)
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http://www.oilproject.org/lezione/cos-un-business-community-model-6346.html

43. 2. Business Model & Canvas
Business plan
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44. 2. Business Model & Canvas
Business plan
• Business plan describes what, how long e how much
money you need to realize your business model.
• Usually a business plan is a doc both for internal and
external use. Internally it describes the company
strategy, externally it presents the project to
stakeholder.
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45. 2. Business Model & Canvas
Business plan
• Writing a business plan help to clarify every company
activities and
• optimize and develop available resources
• improve consciousness on financial aspects, cash flows,
break even, etc.
• Analyze risks
• Identify path to specific goals
• Etc.
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http://www.nascelimpresa.it/doc/guida_BUSINESS_PLAN.pdf

46. 2. Business Model & Canvas
Business model Vs
Business plan
Plans are static…
models are dynamic!
- Steve Blank -
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http://www.slideshare.net/sblank/bus-model-and-cust-dev-jan-2013