UNIVERSITY OF INFORMATION TECHNOLOGY
FACULTY OF INFORMATION SYSTEMS
FROM AN IDEA TO
A BUSINESS MODEL
Content
▪ General process
▪ The business model canvas
▪ The Business model patterns
▪ Design
▪ Strategy
▪ Business Model Generation
Dr. Cao Thi Nhan
The business model canvas
The business model canvas
1. A business model describes the rationale of how an organization creates, delivers,
and captures value
2. The challenge is that the concept must be simple, relevant, and intuitively
understandable, while not oversimplifying the complexities of how enterprises
function.
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
9. Cost Structure
The business model canvas
1. Customer Segments
Customer groups represent separate segments if:
▪ Their needs require and justify a distinct offer
▪ They are reached through different Distribution Channels
▪ They require direrent types of relationships
▪ They have substantially different profitabilities
▪ They are willing to pay for different aspects of the offer
Who are our most important customers?
The business model canvas
2. Value Propositions
describes the bundle of products and services that create value for a specific Customer
Segment
▪ What value do we deliver to the customer?
▪ Which one of our customer’s problems are we helping to solve?
▪ Which customer needs are we satisfying?
▪ What bundles of products and services are we offering to each Customer Segment?
Some factors:
▪ Newness (new function, new technology…)
▪ Performance, “Getting the job done”
▪ Design, Price, Cost reduction, Risk reduction, Convenience
The business model canvas
3. Channels
describes how a company communicates with and reaches its Customer Segments to deliver
a Value Proposition
▪ Through 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?
The business model canvas
3. Channels
Channel types:
▪ Own: Safe force, websites, own stores
▪ Partner: Partner stores, Wholesaler
Channel phases:
▪ Awareness: How do we raise awareness about our company’s products and services?
▪ Evaluation: How do we help customers evaluate our organization’s Value Proposition?
▪ Purchase: How do we allow customers to purchase specific products and services?
▪ Delivery: How do we deliver a Value Proposition to customers?
▪ After sales: How do we provide post-purchase customer support?
The business model canvas
4. Customer relationshop
describes the types of relationships a company establishes with specific Customer Segments
Through 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?
Some factors:
▪ Personal assistance, Self-service,
▪ Automated services, Communities,
▪ Co-creation…
The business model canvas
5. Revenue Streams
represents the cash a company generates from each Customer Segment
▪ 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?
Some factors:
▪ Asset sale
▪ Usage fee, Licensing,
▪ Subscription fees: selling continuous access to a service (monthly member …)
▪ Advertising
The business model canvas
6. Key resourses
describes the most important assets required to make a business model work
▪ Physical: buildings, vehicles, machines, systems, point-of-sales systems, and
distribution networks…
▪ Intellectual: brands, proprietary knowledge, patents and copyrights, partnerships,
and customer databases…
▪ Human
▪ Financial
The business model canvas
6. Key activities
describes the most important things a company must do to make its business model work
▪ Production
▪ Problem solving: new solutions to individual customer problems.
▪ Platform/network
7. Key partnership
describes the network of suppliers and partners that make the business model work
▪ Who are our key suppliers?
▪ Which Key Resources are we acquiring from partners? Which Key Activities do
partners perform?
The business model canvas
9. Cost structure
describes all costs incurred to operate a business mode
▪ Cost-driven: focus on minimizing costs
▪ Value-driven: focus on value creation
Some factors:
▪ Fixed costs
▪ Variable costs
▪ Economies of scale:
▪ Economies of scope
Q A
