2. Inclusive business models
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Understanding the BM
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From Value Chains to Business Models
Value chain map ->
High-level view on the
system
Business model ->
Close-up on one
organization with a 360°
view
Business Model
Analysis
Input supplier Producer Buyer Wholesaler Retailer Consumer
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Understanding the BM
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How to understand the BM
• Open interviews with:
– Producers
– Buyers
– Stakeholders & partners
• Speak to more than one person -> variety of
answers
• Ask broad questions & follow with more detailed
ones
• Keep discussions friendly and relaxed
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Understanding the BM
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Tool: Business Model Canvas*
1. What does the organization do?
2. How does it do it?
3. Who does it?
• Who are the customers?
4. How much does it cost to do it?
• How much does it earn?
*Source: Material for BM Canvas tool is extracted from CIAT’s Link Methodology: a participatory guide to business
models that link smallholders to markets.
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1. Customers
• For whom is the organization creating value?
• Who are the customers paying for the product?
-> Without customers no business can survive
-> Important to understand their needs to satisfy
them
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Understanding the BM
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2. Value proposition
• Products and services
• Reason why customers buy the product
• Specific characteristics
• Need or problem your product satisfies
• What value is offered to customers?
• Which customer need it satisfies?
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3. Channels
• How do products reach customers?
• What is the logistics chain?
• Through which channels is the product
delivered?
• How do channels work?
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4. Customer relationships
• How is the relationship with customers?
• How costly is the relationship?
• Is the relationship what customers want?
• How do we communicate with customers?
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5. Revenue Stream
• How is the organization capturing value?
• What are the pricing mechanisms?
• How is income created?
• For what do customers pay?
• How do customers pay?
• How stable is the income?
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6. Key Resources
• Infrastructure to create and deliver value
• Physical, intellectual, financial and human
resources needed for value creation
• Indispensable assets (e.g. machinery,
equipment, technology, knowledge, access to
credit)
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7. Key Activities
• What does the organization do to function?
• Actions to create value
• Production, processing, marketing, logistics and
quality control
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8. Key Partners
• Who interacts with your business model?
• Direct partners: producers, transporters,
suppliers
• Indirect partners: financial institutions, research
centres, NGOs, public organizations
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9. Cost Structure
• Cost for the creation of value
• Fixed costs
• Variable costs
• Economies of scale
• Economies of scope
20. Partners
- Who are the
partners?
- Who are the
suppliers?
- What are the
activities the
partners
perform?
Key activities
- What are the key
activities for the value
proposition (production,
processing, marketing,
logistics, quality)?
- Who is responsible
for the activities?
Value proposition
- What is the product
offered to
customers?
- Why do customers
buy the product
(quality, reliable
supply, available
resources, price)?
- What is the
problem or need that
the product
satisfies?
Customer
relationships
- How does the
organization
communicate with its
customers?
- What is the type of
relationship with the
customers?
Customers
- For whom is the
organization
creating value?
- Who are the
customers?
- Who is paying for
the product?
Key resources
- What are the key
resources for the value
proposition?
- Are the key resources
available?
- How are the key
resources allocated
and distributed?
Channels
- How do products
reach the customer?
- What are the tools
to get products from
producers to
customers?
- Is there more than
one way to get
products from
producers to
customers?
Cost structure
-Fixed costs
-Variable costs
-Economies of scale
-Economies of scope
Revenue steam
- What is the selling price?
- How is the price determined?
- How do customers pay?
- How long does it take to receive the
payment?
- How stable is the income?
Notas do Editor
This session goes in detail on the first step of the IBM approach – understanding the business model. In order to identify opportunities for improvement, it is important to clearly understand the current situation and how actors are doing business. This section will provide practical tools for analyzing a business model.
To perform a business model analysis, two tools are included:
Option 1: FAO checklist
Option 2: Business Model Canvas
The facilitator can choose which tool to use based on which would be more useful and easy to use for the participants.
Outputs
Participants will be able to:
List the different business model components
Perform a general business model analysis
Refresh the concept of the IBM.
Strengthening business models begins with an appraisal of how target farmers and buyers are doing business. The analysis looks first at the farmers’ groups to understand their organizational structure, members, resources, capacities, suppliers and buyers, commodity characteristics and marketable surpluses of members. The buyers’ business models are similarly analysed to understand their management structure, resources, capacities, product description, operational capacity and clients. In order to identify areas of improvement, the business model analysis should be a reflection of the business reality on the ground, not a desired or ideal situation.
Its necessary to do a business model analysis for the producers and the buyers