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IEEE-USA Business Models: Identifying How to Succeed
John Prohodsky
IEEE-USA Annual Meeting August 2013
A Business Model?
A business model describes the rationale of how an organization creates, delivers and captures value
Based upon the Business Model Canvas http://www.businessmodelgeneration.com/downl
oads/business_model_canvas_poster.pdf
Description of Business Model Canvas http://www.businessmodelgeneration.com/downl
oads/businessmodelgeneration_preview.pdf
Business Model as Theater
Front stage (right side)
– Presents value
– Seen by customer
Back stage (left side)
– Presents costs
– Seen by business
The Business Model Canvas
Wedding Designer Business Model
Wedding designer
–Designs wedding experience
– Creates a memorable experience
Weddings - $120 billion/year industry
$27,000 average wedding cost
Customer Segment Identification
Mass Market
Niche Market
Segmented
Diversified
Multi-sided
Customer Segment
Value?
Getting the job done
Design
Brand/status
Price
Cost reduction
Risk reduction
Accessibility
Convenience/usability
The Value Proposition Canvas
Value Proposition Canvas Logic
|Gains
| \
Customer Jobs | |
| /
|Pains
|Gain Creators
| \
| |Products and Services
| /
|Pain Relievers
Value Proposition Canvas resources (1)
Value Proposition Canvas
– http://www.businessmodelgeneration.com/downloads/value_proposition_canvas.pdf
Introduction to Value Proposition Canvas
– http://businessmodelalchemist.com/2012/08/achieve-product-market-fit-with-our-brand-new-value-proposition-designer.html
Value Proposition Canvas resources (2)
Testing Value Proposition
– http://businessmodelalchemist.com/2012/09/test-your-value-proposition-supercharge-lean-startup-and-custdev-principles.html
– Validates assumptions
– Very powerful when combined with Lean Startup Methodology
http://theleanstartup.com/principles
Value Propositions:
Channels – reaching customers
How a company communicates with and reaches its Customer Segments to Deliver a Value Proposition
–Marketing
– Sales
– Purchase
Channels phases
Awareness: Referrals, Website and Social media
Evaluation: Present value proposition, social media, referrals
Purchase: Upfront retainer and balance due when wedding design is complete
Delivery: Present plan with instructions or referrals to vendors
After sales: Limited help to solve problems.
Channels:
Customer relationships types
Personal Assistance
Dedicated personal assistant
Self-service
Automated services
Communities
Co-creation
Customer Relationships:
Types of revenue streams
Asset sale
Usage fee
Subscription fee
Lending/Renting/Leasing
Licensing
Brokerage fees
Advertising
Pricing considerations
List price
Product feature dependent
Customer segment dependent
Volume dependent
Revenue streams:
Key resources (assets) -
Physical
Intellectual
Human
Financial
Key resources
Key activities – what makes it work
Production
–Design
–Making
–Delivery
Problem solving
Platform/Network
Key Activities:
Key Partnerships – Networks that make the business model work
Motivations for partnerships
–Optimization and economy of scale
– Reduction of risk and uncertainty
– Acquisition of particular resources and activities
Types of Partnerships
Strategic alliances
Strategic partnerships
Joint ventures
Buyer-supplier
Key Partners
Types of cost structures
Cost–driven
Value-driven
Fixed costs
Variable costs
Economies of scale
Economies of scope
Cost Structure:
Transition from Planning to Modeling
Plans describe what and how
Models capture value, costs and relationships
There are many dfferent models (conceptual frameworks)
Lean canvas
Personal Business Model Canvas
Student Personal Business Model Canvas
We welcome
your questions
and all
offers of assistance…
15-Oct-13 35
