Business Model Canvas

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Presentation Description

The Business Model Canvas is a Strategic Management and Lean Startup template for developing new or redesigning existing business models to create competitive advantage. Based on the framework developed by Strategyzer, the canvas is presented as a visual chart with 9 building blocks. These elements cover the areas of the organization's core offering, infrastructure, customers, and finances. They include: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships and Cost Structure. This innovative and increasingly popular tool can be used in a collaborative setting such as a strategy planning workshop. It helps organizations to align their activities by illustrating and discussing potential trade-offs in a structured manner. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis. This presentation provides a basic overview of the Business Model Canvas. It is intended to provide users with basic knowledge of the approach to business modeling. It is most suitable for a half-day or one-day workshop to familiarize participants with the Business Model Canvas, and its other concepts and tools, e.g. Design Thinking, Value Proposition Canvas. To download this complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations

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© Operational Excellence Consulting. All rights reserved. Business Model Canvas

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© Operational Excellence Consulting. All rights reserved. 2 © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives Understand the key concepts of business model thinking. Acquire knowledge of the 9 building blocks of the Business Model Canvas for value creation. Learn how to apply the Business Model Canvas to map out your current business model for understanding and analysis. Gain basic knowledge of the Business Model design process and related frameworks.

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© Operational Excellence Consulting. All rights reserved. 3 Contents 1.  Introduction to Business Model Thinking 2.  The 9 Building Blocks 3.  The Business Model Canvas 4.  Business Model Design Process 5.  Basics of Design Thinking 6.  The Value Proposition Canvas 7.  Presenting the Business Model Canvas NOTE: This is a PARTIAL PREVIEW. To download the complete presentation please visit: http://www.oeconsulting.com.sg

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© Operational Excellence Consulting. All rights reserved. 4 © Operational Excellence Consulting. All rights reserved. 4 3 Traits of Successful Entrepreneurs Do not focus on product innovation alone Do not copy an existing business model Willing to take risks and experiment with their businesses

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© Operational Excellence Consulting. All rights reserved. 5 “While product innovation and process innovation are important aspects in entrepreneurship having the right business model more often than not would make the difference between success and failure.” Yves Pigneur

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© Operational Excellence Consulting. All rights reserved. 6 © Operational Excellence Consulting. All rights reserved. 6 Definition of Business Model “A business model describes the rationale of how an organization creates delivers and captures value.” Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 7 © Operational Excellence Consulting. All rights reserved. 7 Business Model Product/Service Revenue Organization Customers Capture Create Deliver

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© Operational Excellence Consulting. All rights reserved. 8 The Business Model Canvas is a Strategic Management framework for developing business models Key Partners Key Activities Value Proposition Customer Segments Key Resources Cost Structure Revenue Streams Customer Relationships Channels Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 9 The Business Model Canvas is a Visual Tool §  A visual representation of the various elements of your business model §  The canvas allows you to: –  see the relationships among the parts of your model –  identify hypothesis assumptions and risks –  plan validation testing market channels pricing –  find ways to add value or reduce cost –  brainstorm market disruption strategies

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© Operational Excellence Consulting. All rights reserved. 10 Integrated Suite of Tools Zoom out Zoom in Environmental Map Business Model Canvas Value Proposition Canvas Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 11 The Value Proposition Canvas allows us to dive deeper into the Value Proposition and Customer Segments of the business model - Zoom Are you creating value for your business The Business Model Canvas makes explicit how you are creating and capturing value for your business. + Zoom Are you creating value for your customer The Value Proposition Canvas makes explicit how you are creating value for your customers. Zoom out to the bigger picture to analyze if you can profitably create deliver and capture value around this particular customer value proposition. Zoom in to the detailed picture to investigate if the customer value proposition in your business model really creates value for your customer. Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 12 Applications of the Business Model Canvas 1.  Strategizing 2.  Dashboard 3.  Understanding competition 4.  Portfolio of business models 5.  Innovation 6.  New idea template 7.  Understanding customers 8.  Organizational alignment 9.  Strategy diffusion and co- creation 10.  Shared language across functions 11.  Aligning value side revenue and infrastructure side costs 12.  Investing 13.  Mergers and acquisitions 14.  Exit strategies

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© Operational Excellence Consulting. All rights reserved. 13 The Business Model Canvas consists of 9 generic building blocks for developing new or documenting existing business models Key Partners Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Cost Structure Revenue Streams Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 14 The 9 Building Blocks 1 Customer Segments An organization serves one or several Customer Segments. 2 3 Value Propositions It seeks to solve customer problems and satisfy customer needs with value propositions. Channels Value propositions are delivered to customers through communication distribution and and sales Channels.

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© Operational Excellence Consulting. All rights reserved. 15 1. Customer Segments The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve Key Questions: §  For whom are we creating value §  Who are our most important customers Key Points: §  A company may group customers into distinct segments with common needs common behaviors or other attributes §  A business model may define one or several large or small Customer Segments §  Types of Customer Segments: •  Mass market e.g. car •  Niche market e.g. Rolex •  Segmented •  Diversified •  Multi-sided platforms or multi-sided markets

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© Operational Excellence Consulting. All rights reserved. 16 2. Value Propositions The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment Key Questions: §  What do we deliver to the customer §  Which one of our customer’s problems are we helping to solve §  What bundles of products and services are we offering to each Customer Segment §  Which customer needs are we satisfying Key Points: §  A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs §  Values may be quantitative e.g. price speed of service or qualitative e.g. design customer experience §  Elements that contribute to customer value creation: Newness Performance Customization “Getting the job done” Design Brand/Status Price Cost Reduction Accessibility Risk Reduction Convenience/Usability

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© Operational Excellence Consulting. All rights reserved. 17 © Operational Excellence Consulting. All rights reserved. 17 LEFT CANVAS efficiency RIGHT CANVAS value Left Canvas vs. Right Canvas Source: Strategyzer KP KA VP CR CS KR CH C R

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© Operational Excellence Consulting. All rights reserved. 18 Low Cost Airlines Business Model Source: Strategyzer KP KA VP CR CS KR CH C R Car Rental Hotel Maint- enance Call Centers Airports Cheap Airports Single Aircraft Model Cheap Flights www Call Centers Impersonal Automated No Frills Insurance Training Tickets Budget Travelers Fees Quick Turn- arounds

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© Operational Excellence Consulting. All rights reserved. 19 Skype Business Model Source: Strategyzer KP KA VP CR CS KR CH C R Payment Providers Distribution Partners Software Development Complaint Management Software Development Software Software Developers Headset Partnerships Skype.com Mass Customized Telco Partners Cheap Calls to Phones SkypeOut Free Internet Video Calling SkypeOut Pre-paid or Subscription Free Web Users Globally People Who Want to Call Phones

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© Operational Excellence Consulting. All rights reserved. 20 © Operational Excellence Consulting. All rights reserved. 20 5 Phases of Business Model Design OBJECTIVE §  Prepare for a successful business model design project §  Research and analyze elements needed for the business model design project §  Generate and test viable business model options and select the best §  Implement the business model prototype in the field §  Adapt and modify the business model in response to market reaction Mobilize Understand Design Implement Manage

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© Operational Excellence Consulting. All rights reserved. 21 © Operational Excellence Consulting. All rights reserved. 21 Business Models and Business Plans BUSINESS PLAN EXECUTIVE SUMMARY THE TEAM Management Profile Why We Are a Winning Team THE BUSINESS MODEL Vision Mission and Values How Our Business Model Works Value Proposition Target Markets Marketing Plan Key Resources and Activities FINANCIAL ANALYSIS Breakeven Analysis Sales Scenarios and Projections Capital Spending Operating Costs Funding Requirements EXTERNAL ENVIRONMENT The Economy Market Analysis and Key Trends Competitor Analysis Competitive Advantage of Our Business Model IMPLEMENTATION ROADMAP Projects Milestones Roadmap RISK ANALYSIS Limiting Factors and Obstacles Critical Success Factors Specific Risks and Countermeasures CONCLUSION ANNEXES KP KA VP CR CS KR CH C R Financial spreadsheets Environmental analysis Implementation roadmap SWOT and uncertainty analysis Source: Strategyzer

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© Operational Excellence Consulting. All rights reserved. 22 “Businesspeople don’t just need to understand designers better they need to become designers.” Roger Martin Dean Rotman School of Management

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© Operational Excellence Consulting. All rights reserved. 23 © Operational Excellence Consulting. All rights reserved. 23 Principles of Design Thinking Human-centered Discover people’s real needs and wants. Be able to gain deep insights of their motivations and share the feelings of others. Highly-creative Look at situations differently. Push past obvious solutions and existing alternatives to get to breakthrough ideas. Collaborative Work as a team to look at the problem holistically and implement solutions to improve peoples experience. Hands-on Ideas are made tangible through prototyping. Build rough or lo-fi prototypes to learn how to make ideas better. Iterative Repeat each phase backwards and forwards and arrive at each decision or desired result after rounds of learning and discovery. Show dont tell Enable the user to experience the story through action words thoughts senses and feelings rather than pure description. z

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© Operational Excellence Consulting. All rights reserved. 24 The Design Thinking Process Consists of 5 Action Phases Learn about the audience for whom you are designing by observation and interview. Who is my user What matters to this person Create a point of view that is based on user needs and insights. What are their needs Brainstorm and come up with as many creative solutions as possible. Wild ideas encouraged Build a representation of one or more of your ideas to show to others. How can I show my idea Remember: A prototype is just a rough draft Share your prototyped idea with your original user for feedback. What worked What didn’t Empathize Define Ideate Prototype Test

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© Operational Excellence Consulting. All rights reserved. 25 What is a Value Proposition §  Describes the benefits customers can expect from your products and services VALUE PROPOSITION PRODUCT / SERVICE CUSTOMER

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© Operational Excellence Consulting. All rights reserved. 26 © Operational Excellence Consulting. All rights reserved. 26 72 of new product and service innovations fail to deliver on expectations Source: Simon-Kucher Partners 2014

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© Operational Excellence Consulting. All rights reserved. 27 Role of Value Proposition Designer – Determine the best fit between the value proposition and customer needs Key Partners Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Cost Structure Revenue Streams VALUE PROPOSITION CUSTOMER SEGMENT BUSINESS MODEL CANVAS VALUE PROPOSITION DESIGNER +

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© Operational Excellence Consulting. All rights reserved. 28 © Operational Excellence Consulting. All rights reserved. 28 Fit is achieved when your value proposition alleviate extreme pains and create essential gains that customers care about Value Map Customer Profile FIT

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© Operational Excellence Consulting. All rights reserved. 29 Presenting the Business Model Canvas – Don’ts 1.  Commit cognitive murder – showing the entire canvas all at once 2.  Too much granularity and detail 3.  Too many ideas in one canvas 4.  “Filling out” each box one after another like a checklist 5.  Orphan elements – elements that have no connection to other elements e.g. a revenue stream without a customer who is paying for a value proposition 6.  Mixing present and future state 7.  Gives in to the urge to blah blah blah

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© Operational Excellence Consulting. All rights reserved. END OF PREVIEW To download this presentation please visit: www.oeconsulting.com.sg

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