This document provides an overview of the business model canvas tool. It discusses the 9 building blocks of the business model canvas: 1) customer segments, 2) value propositions, 3) channels, 4) customer relationships, 5) revenue streams, 6) key resources, 7) key activities, 8) key partnerships, and 9) cost structure. For each building block, it provides brief definitions and questions to consider when analyzing a business model. The document emphasizes that the business model canvas is an iterative tool to help visualize and assess different components of a business model.
2. Serdar Temiz
Social
Entrepreneur
PhD Candidate
Lecturer Entrepreneurship, Technology Entrepreneurship
Open and User Innovation,
Chairman
Previous life:
IT support,Telecom software Engineer, .NET, Java
developer, Project Manager, Business Developer
B.S, M.Sc, MBA & MA,
www.sciencebacker.com
www.okfn.se /
www.okfn.org
3. Some Questions
• What is Invention
• What is Innovation
Serdar Temiz & Terrence Brown 20162016-11-20
4. There are many inventions, but far
fewer
innovations.
An invention is a novel idea
Innovation is the commercialization of
that
novel idea
Serdar Temiz & Terrence Brown
2016
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5. Types of Innovation
1. Technology innovation
2. Process innovation
3. Product & service innovation
4. Business Model innovation
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8. Product / service innovation
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9.
10. Definitions
• “the content, structure, and governance of transactions designed so as to
create value through the exploitation of business opportunities” (Zott & Amit,
2001 p 494-495)
• “defines how the enterprise creates and delivers value to customers, and
then converts payments received to profits” (Teece, 2010 p 173)
• “takes technological characteristics and potentials as inputs and converts
them through customers and markets into economic outputs” (Chesbrough &
Rosenbloom, 2002, p. 532)
• The logic of the firm, the way it operates and how it creates value for its
stakeholder (Casadesus & Ricart)
• “a set of expectations about how the business will be successful in its
environment” (Downing, 2005, p. 186)
• “stories that explain how enterprises work” (Magretta, 2002, p. 87)
11. A business Model is..
The business model is a strategic plan
to be implemented through
organizational structures, processes,
and systems in order to need customer
needs. (one of many definitions)
Serdar Temiz & Terrence Brown
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12. How Business Models Emerge (1 of 3)
– The value chain is the string of activities that moves a
product from the raw material stage, through
manufacturing and distribution, and ultimately to the
end user.
Primary activities are directly concerned with the
creation or delivery of a product or service.
Support activities help to improve the effectiveness
or efficiency of primary activities
Raw Material
Value Chain
Primary &
Secondary
Activities +
Margin
Product /
Service
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13. The Value Chain (again)
"Competitive Advantage: Creating and Sustaining superior Performance" (1985).
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How Business Models Emerge (2 of 3)
14. The Value Chain (continued)
Entrepreneurs look at the value chain of a product
or a service to pinpoint where the value chain can
be made more effective or to spot where additional
“value” can be added.
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How Business Models Emerge (3 of 3)
15. ... can be, even more important than tech
innovation!
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RIGHT BUSINESS MODEL
16. Finding and executing the right business
model can be the only/ main reason of the
success
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BUSINESS MODEL INNOVATION
27. • Customer needs
• Competition
• Technological change
• Social change
• Legal environment
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Forces Affecting The Business Model
34. • A Value Proposition is an overall view of a company's bundle of
products and services that are of value to the customer.
• Customer Segments: segment(s) of customers a company wants
to offer value to.
• A Channel is a means of getting in touch with the customer.
• The Relationship describes the kind of link a company
establishes between itself and the customer.
• The Key Activities describes the arrangement of activities and
resources that are necessary to create value for the customer.
Key Key Resources that can be deployed by the firm to create
value including those that form the basis for a competitive
advantage
• Key Partnership is cooperative agreement between two or more
companies in order to create value for the customer
• The Cost Structure is the representation in money of all the
means employed in the business model.
• The Revenue Streams describes the way a company makes
money through a variety of revenue flows.
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2016
37. 1. Customer Segments
2. Value proposition
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resource
7. Key Activities
8. Key Partnerships
9. Cost Structure
Serdar Temiz & Terrence Brown
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The 9 Building Blocs of Business Model Canvas
38. • A Value Proposition is an overall view of a company's bundle of
products and services that are of value to the customer.
• Customer Segments: segment(s) of customers a company wants
to offer value to.
• A Channel is a means of getting in touch with the customer.
• The Relationship describes the kind of link a company
establishes between itself and the customer.
• The Key Activities describes the arrangement of activities and
resources that are necessary to create value for the customer.
Key Key Resources that can be deployed by the firm to create
value including those that form the basis for a competitive
advantage
• Key Partnership is cooperative agreement between two or more
companies in order to create value for the customer
• The Cost Structure is the representation in money of all the
means employed in the business model.
• The Revenue Streams describes the way a company makes
money through a variety of revenue flows.
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39. Serdar Temiz & Terrence Brown
2016
By Alexander Osterwalder & Yves Pigneur
2016-11-20
40. • For whom are we creating value?
• Who are our most important customers?
• Customer Segments
– Mass Market
– Niche market
– Segmented - related customer segments: frequent
flier program, bank customers with big assets
– Diversified: Unrelated customer segments: Amazon
– Multi sided: free newspaper-readers and advertisers
Serdar Temiz & Terrence Brown
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1. Customer Segment
41. Find a Customer-I
• Why?
• Who is your customer?
Grave, School, hospital, apotek, free
newspaper
• Can everyone be your customer?
• "people who want to buy a flat,"
• "anyone needs job"
• “Everyone who goes to university”
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
42. Find a Customer-II
• Find a customer for solving a pain
• Use the Customer Profile
• Describe who is making purchasing
decision?
IT ? Operations Group? Management?
• Make sure they are happy
• Market is important but
-do not only think market
• Billion dollar market does not start in few
minutes
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
43. Q’s for Customer
IDENTIFIABLE – what distinguishes them?
MEASURABLE – how many belong to your
target segment?
REACHABLE – how to reach, communicate
with each segment
WILLING– do they want it?
ABLE– they want but can they afford it?
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
44. Q’s for Customer - Macro
Level
• Population size
• Population character
• Disposable income levels
• Educational background
• Primary languages
• Infrastructure
• Regulations
• Political affiliation
• And so on…
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
45. • Customer is important but you can not give all they
want
• Learn to stay No,
• Learn to focus
• Learn to ”change and adopt”
• They may not know/ may not able to explain
what they want: buying process is mysterious
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Keep in Mind Paradox
46. • A bundle that meets that meets a customer's needs or solve
his/her problem.
• Benefits can be tangible and intangible
• Reason why customers pick one business or another.
• Can be
– innovative, new disruptive offer.
– similar to existing offers but just added feature or
attribute in some sort of way.
Serdar Temiz & Terrence Brown
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2. Value Proposition
47. Some Elements that may add to
value
• newness
• customization
• getting job done
• support
• price
• design
• status/ brand
• Accessibility
• risk deduction
• usability
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
48. • What pain do we solve for customer?
• What do we deliver for customer?
• What value do we develop for customer
• Which need of customer do we satisfy?
Serdar Temiz & Terrence Brown
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2. Value Proposition – Q’s to Answer
50. •Awareness of products
and services, Evaluation
of value proposition,
Purchase, Delivery,
After sales
•Direct: Brick and mortal
stores, websales, sales
force
•Indirect: wholesales
partner stores,
Value
Proposition
Customer
Segment
Serdar Temiz & Terrence Brown
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3. Channels
51. Serdar Temiz & Terrence Brown
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4. Customer Relations
• Customer
acquisition
• Customer
retention
• Boosting sales
(upselling)
Value
Proposition
Customer
Segment
52. 4. Customer Relationships
• What type of relationship does
each of our Customer Segments
expect us to establish and
maintain with them?
• Which ones have we established?
• How costly are they?
• How are they integrated with the
rest of our business model?
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
53. Example Customer Services
Can you give some example
companies?
• (Dedicated)Personal assistance
• Self Service
• Community
• Co-creation
• Automated
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
54. Value
Proposition
Customer
Segment
• Asset sale
• Usage fee: use more, pay more
• Subscription: monthly, yearly
• Leasing/Lending/Renting
• Licensing: patents, license fee
• Brokerage fees
• Advertising
Fixed
pricing
Dynamic
pricing
Serdar Temiz & Terrence Brown
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Channels
5. Revenue Streams
55. Fixed
pricing
Dynamic
pricing
• List price
• Product feature
dependent
• Customer segment
dependent
• Volume dependent
• Yield management : hotels,
airlines
• Real-time-market :supply
and demand
• Auctions Price
• Negotiation
Serdar Temiz & Terrence Brown
2016
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57. 6. Key Resources
• What Key Resources do our Value
Propositions require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue Streams?
• What physical resources,
intellectual, human, financial
resources do we have?
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
58. • What Key Activities do our Value Propositions
require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue streams?
• Production- Microsoft
• Network/Platform: Facebook, ebay, Visa
Serdar Temiz & Terrence Brown
2016
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7. Key Activities
59. Why Partnership?
– reduce cost,
– Reduction of risk and uncertainty: Web standards
– Acquisition of particular resources and activities: Nokia Windows,
HTC phones
• Strategic alliances between non-competitors
• Coopetition: strategic partnerships between competitors
• Joint ventures to develop new businesses
• Buyer-supplier relationships to assure reliable supplies
Serdar Temiz & Terrence Brown
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8. Key Partnerships
60. 8. Key Partnerships -II
• Who are our Key Partners?
• Who are our Key suppliers?
• Which Key Resources are we acquiring
from partners?
• Which Key Activities do partners
perform?
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
61. 9. Cost Structure-I
• Business model Cost Structures:
cost-driven
minimizing
costs
wherever
possible value-driven
Premium
Value
Propositions
and a high
degree of
personalized
service
Serdar Temiz & Terrence Brown
KTH Stockholm 2014
62. Cost Structure Characteristics:
• Minimizing costs wherever possibleFixed costs
• Premium Value Propositions and a high
degree of personalized service
Variable costs
• Average cost per unit to fall as output
risesThe same Distribution
Economies of scale
• Channels for different products and
servicesmay support multiple products.
Economy of Scope
Serdar Temiz & Terrence Brown
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9. Cost Structure -1
63. Serdar Temiz & Terrence Brown
20162016-11-20
By Alexander Osterwalder & Yves Pigneur
64. Keep in Mind !
Serdar Temiz & Terrence Brown
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65. Serdar Temiz & Terrence Brown
20162016-11-20
By Alexander Osterwalder & Yves Pigneur
Colors are
important!
!!!
66. By Alexander Osterwalder & Yves Pigneur
Serdar Temiz & Terrence Brown
20162016-11-20
Iteration
is
impotant!
68. Thank you!
Slide will be on slideshare
Serdar Temiz
twitter: @serdar_temiz
www.serdartemiz.com
temiz@kth.se
hi@serdartemiz.com
Serdar Temiz & Terrence Brown
2016
2016-11-20
Notas do Editor
This type of analysis may focus on (1) a single primary activity of the value chain (such as marketing and sales), (2) the interface between one stage of the value chain and another (such as the interface between operations and outgoing logistics), or (3) one of the support activities (such as human resource management).
The Model 914 used the relatively new electrophotography process, which is a dry process that avoids the use of wet chemicals. In seeking potential marketing partners, Haloid repeatedly was turned down by the likes of Kodak, GE, and IBM, who had concluded that there was no future in the technology as seen through the lens of the then-prevalent business model. While the technology was superior to earlier copy methods, the cost of the machine was six to seven times more expensive than alternative technologies. The model of selling the equipment below cost and making up the difference by large margins in the sale of supplies was not viable because the cost of the supplies was about the same as that of the alternatives, so there was little room to maneuver.
Xerox then decided to market the new product itself and developed a new business model to do so. The new model leased the equipment to the customer at a relatively low cost and then charged a per copy fee for copies in excess of 2000 copies per month. At that time, the average business copier produced an average of only 15-20 copies per day. For this model to be profitable to Xerox, the use of copies would have to increase substantially.
Fortunately for Xerox, the quality and convenience of the new copy technology proved itself and companies began to make thousands of copies per day. As a result, Xerox sustained a compound annual growth rate of 41% over a 12 year period. Without this business model, Xerox might not have been successful in commercializing the innovation.
A niche market is a focused, targetable portion of a market.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. You can think of a niche market as a narrowly defined group of potential customers. In other words, a very specific market segment within a broader segment.
A niche market involves specialist goods or services with relatively few or no competitors.
Why Swedish start ups are global?
Number of Old people increasing..
Which language do you provide service,
Customer support language
No infrastructure for banking, telecom,