CHAPTER 4

• Business model


  Defines the foundation of a company's core value proposition, targeting customers, key resources, and assumed revenue streams
• Business model


  • Offers a framework for success and overcoming challenges
• Traditional business models


  • Manufacturer
  • Distributor
  • Retailer
  • Franchise
  • Brick-and-mortar
  • Bricks-and-clicks
  • Direct Sales
  • High Touch
  • Family-owned
• Modern business models


  • Nickel-and-dime
  • Freemium
  • E-Commerce
  • Subscription
  • Aggregator
  • Online Marketplace
  • Hidden Revenue
  • Data Licensing/ Data Selling
  • Agency-Based
  • Affiliate Marketing
  • Dropshipping
  • Network Marketing
  • Crowdsourcing
  • Blockchain
  • Low Touch
  • Razor and Blade
  • Consulting
  • Social Enterprise
• Business Model Canvas


  A one-page canvas with 9 interconnected segments that describe the key elements of a business
• Elements of the Business Model Canvas

  • Key Partners
  • Key Activities
  • Key Resources
  • Value Propositions
  • Customer Relationships
  • Channels
  • Customer Segments
  • Cost Structure
  • Revenue Streams
• Anand Mahindra: '"The more you drive positive change, the more enhanced your business model."'
• dia


  Rider delivery
• breads

  Social media
• Halal certified

  Retail network
• Cost Structure


  • Equipment and facilities
  • Staff salaries
  • Product ingredients
  • On call delivery
  • Direct selling using own website
  • Physical store
  • Events planner
• Customer Segments

  • Neighborhood communities
  • Healthy life stylist
  • Neighborhood supermarkets
  • Neighborhood bakeries
• Revenue Streams


  • Volume sales from supermarkets
  • Sales to customers
  • Sales to events such as weddings, birthdays, anniversaries, etc.
• Basically there are four major parts of the Business Canvass model which are the infrastructure, offering, customers and finances.
• Infrastructure


  Key partners, key activities and key resources
• Offering


  Value proposition
• Customers


  Customer segments, channels and customer relationships
• Finance


  Cost structure and revenue streams
• Key Partners


  Important suppliers in the supply chain
• Key Activities


  Specific activities necessary to deliver the value proposition
• Key Propositions


  The core value the company provides to customers
• Customer Relationships


  The type of relationships with customers
• Customer Segments


  Who the value proposition targets
• Key Resources


  Assets necessary to deliver the value propositions
• Cost Structure


  The key costs in the company's business model
• Channels


  How the value proposition is delivered to customers
• Revenue Streams


  The ways the value proposition generates money for the business
• Types of Partnerships

  • Strategic alliances
  • Coopetition
  • Joint-ventures
  • Buyer-supplier relationships
• Key Activities

  • Marketing
  • Sales
  • Design
  • Development
  • Operations
  • Distribution
  • Customer experience
• Types of Key Resources

  • Physical
  • Intellectual
  • Human
  • Financial
• Customer Value Proposition


  A business's way of generating value in their product or service when targeting potential customers
• Factors in Developing Customer Value Proposition

  • Functional value
  • Emotional value
  • Economic value
  • Symbolic value
• Types of Customer Value Propositions

  • All Benefits
  • Favorable Points of Difference
  • Resonating Focus
• Types of Customer Relationships

  • Personal assistance
  • Dedicated personal assistance
  • Self-service
  • Automated services
  • Communities
• Salesperson to an individual customer


  Relationship that usually develops over an extended period of time
• Self-service


  No direct relationship that exists, but all the essential things to assist customers help themselves are given
• Automated services


  Combination of customer self-service and automated processes, can identify individual customers and their characteristics, can provide personalized information
• Communities


  User communities used by companies to be more close and connected with their current and potential customers, trend to keep online communities to exchange information and help solve each other's problems
• Co-creation


  Extension of the traditional customer-vendor relationship, customers have the chance to co-create value with the company such as in designing and innovating products, writing reviews and soliciting ideas from customers
• Customer segment


  Group of customers with shared needs, behaviors and other traits