BUSINESS MODEL CANVAS

TIBOR FARKAS

www.farkastibor.hu
INTRO

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 WHY ARE WE HERE?
•
•
•
•€£¥$
•
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 Success?

Knowledge Experience

Personality Luck
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 TODAY

Value Proposition Design

&
BUSINESS MODEL
CANVAS

incl. PERSONA
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 Design – The Rational Model
POSITION STRATEGIC
AUDIT CONTROL

MISSION & CORPORATE STRATEGIC STRATEGIC STRATEGIC

OBJECTIVES APPRAISAL OPTIONS CHOICE IMPLEMENT

ENVIRONMENT
ANALYSIS
 Business Model Canvas
• A business model describes how an
organization
– creates,
– delivers, and
– captures value.

From “Business Model Generation,” by Osterwalder & Pigneur

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 MARKETING

• Marketing is the process of

• building profitable customer relationships
• by creating value for customers
• and capturing value in return.

• Kotler, 2009

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 1. Customer Segments
• Groups of people or organizations the
enterprise aims to reach and serve
• Can be:
– Mass market
– Niche market
– Segmented
– Diversified
– Multi-sided
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 Value creation

Select customers Decide on a value

to serve proposition

Segmentation Create
value for Differentation
targeted
Targeting customers Positioning
 Market Segmentation
Segmenting Consumer Markets

1. Geographic segmentation
2. Demographic segmentation
3. Psychographic segmentation
4. Behavioral segmentation
5. Multiple variables
 Market Segmentation
Consumer
segmentation

1. Geographic  Country, Region

2. Demographic  City, Neighborhood
3. Psychographic  Density (urban, suburban, rural)
4. Behavioral  Climate
5. Multiple variables
 Market Segmentation
Consumer
segmentation

1. Geographic  Age / Gender

2. Demographic  Family
3. Psychographic  Ethnicity, Nationality
 Occupation, Income
4. Behavioral
 Education
5. Multiple variables
 Religion
 Market Segmentation
Consumer
segmentation

1. Geographic
 Lifestyle,
2. Demographic
 Social class
3. Psychographic
 Personality
4. Behavioral
5. Multiple variables
 Market Segmentation
Consumer
segmentation
 Occasions (regular, special,
1. Geographic holiday)
2. Demographic  Benefits (service, speed, flavour …)
3. Psychographic  User Status (potential – regular)
4. Behavioral  User Rates (light – heavy)
 Loyalty Status
5. Multiple variables
 Readiness Stage (unaware,
informed, desirous)
 Attitude Toward the Product
Behavioral Segmentation Breakdown
Define the BUYER

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 Beachhead market
• Startup: so you wanna go global.
• How to reduce the risk?
• Learn and practice before entering the
priority market!
• Choose a beachhead market:
• Low economic and political barriers
• Facilitates easy migration to targeted
markets
• Entry point for global
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markets
 PERSONA
• Picture your customer!

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 PERSONA
• Zoltán from Budapest
• 29, YUP, DINKY,
• Senior Manager for a German Bank
• Going out twice a week (once w/ GF)
• No press, no TV, just online
• Shopping once a week in Auchan, appreciating but
not looking for discounts
• Red dry wine and rosé „fröccs”
• Beer: Tap > Bottle > Can.
• Balaton (no lángos, but hekk)
John Doe (Gipsz Jakab, Juan Pérez, Ion Popescu, Иван Иванов)
 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 2. Value Proposition
• What value do we deliver to the customer?
• Which one of our customer’s problems are
we helping to solve?
• What bundles of products & services are
we offering to each Customer Segment?
• Which customer needs are we satisfying?

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 Basic Value Chain
Organization Strategy & Administration
Product or
Supplier Services

Raw
R&D Design Production Marketing Customers
materials
The Value Chain
 2. Value Proposition
Characteristics:
• Newness • Design
• Performance • Brand-Status
• Customization • Price
• “Getting the Job Done” • Cost Reduction
• Accessibility- • Risk Reduction
Convenience-Usability

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 20 possible reasons to choose you
1. Are you unique? 11. The most advanced?
2. Cheaper? 12. The oldest?
3. Quicker? 13. The most loved?
4. Better value? 14. The one experts prefer?
5. Safer? 15. The most reliable?
6. Most trusted? 16. More fun?
7. More friendly? 17. Sold in a special way?
8. The first? 18. Easier to deal with?
9. The latest? 19. More helpful?
10. The top seller? 20. The most tested?
 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 3. Channels
• Which Channels do our Customer
Segments want to be reached?
• How are we reaching them now?
• How are our Channels integrated?
• Which ones work best
• Which ones are most cost-efficient?
• How are we integrating them with
customer routines? 34
 3. Channels (phases)
1. Awareness
2. Evaluation
3. Purchase
4. Delivery
5. After sales

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 4. Customer Relationships
• What do Customers expect from us?
• Current relationship?
• How are they integrated with the rest of
our business model?
• How costly are they?

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 4. Customer Relationships
Examples:
• Personal assistance (Dedicated)
• Self-Service
• Automated Services
• Communities
• Co-creation
• Accessibility
• Convenience-Usability
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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 5. Revenue Streams
• For what value are our customers really
willing to pay?
• For what do they currently pay?
• How are they currently paying?
• How would they prefer to pay?
• How much does each Revenue Stream
contribute to overall revenues?
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 5. Revenue Streams
Types:
• Asset sale
• Usage (service) fee
• Subscription Fees
• Lending-Renting-Leasing
• Licensing
• Brokerage (agent) fees
• Advertising 45
 5. Revenue Streams
• Online companies

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http://rcs.seerinteractive.com/money/
 Pricing
• Fixed pricing • Dynamic pricing

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 6. Key Resources
• What Key Resources do our Value
Propositions require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue Streams?

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 6. Key Resources
Types of resources:
• Physical
• Intellectual (brand patents, copyrights, data)
• Human
• Financial

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 Barriers to ENTRY
• investment (money)
• technical expertise
• licence (mobile, TV etc.)
• access to raw materials
• access to distribution channels
• brand
• strength of companies on the market
• consumer features (loyalty, nationalism)
 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 7. Key Activities
• What Key Activities do our Value
Propositions require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue streams?

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 7. Key Activities
Categories:
• Production
• Problem Solving
• Platform-Network

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 8. Key Partnerships
• Who are our Key Partners?
• Who are our key suppliers?
• Which Key Resources are we acquiring
from partners?
• Which Key Activities do partners
perform?

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 8. Key Partnerships
Motivations for partnerships:
• Optimization and economy of scale
• Reduction of risk and uncertainty
• Acquisition of particular resources and
activities

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 8. Key Partnerships
Types of partnerships:
• Strategic alliances between non-competitors
• Coopetition: strategic partnerships between
competitors
• Joint ventures to develop new businesses
• Buyer-supplier relationships to assure reliable
supplies

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams
 9. Cost Structure
• What are the most important costs in our
business model?
• Which Key Resources are most expensive?
• Which Key Activities are most expensive?

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 9. Cost Structure
Is your business more:
• Cost Driven
• Value Driven

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 Porter’s generic strategies
Differentiate and
sell for higher
price

Selling price
acceptable for
normal product
Normal cost

Control costs

Cost leadership Stuck in the Differentiation

middle
Slide 64
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 9. Cost Structure
Cost characteristics:
• Fixed Costs (salaries, rents, utilities)
• Variable costs
• Economies of scale
• Economies of scope

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 9. Cost Structure
Cost reduction:
1. Economies of scale/scope
2. Supply costs
3. Product/process design
4. Experience

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 The Business Model Canvas
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments

Type here

Key
Resources Channels

Cost Revenue
Structure Streams