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Business Acumen
The document discusses the key components of a business model canvas, which provides a simplified framework for developing new or documenting existing business models. It describes the nine blocks of a business model canvas - value propositions, target customers, distribution channels, customer relationships, key activities, key resources, partner networks, revenue streams, and cost structure. Each block represents an important aspect of a business model and the canvas allows businesses to visualize the interconnections between different components of the model.
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Business Acumen
- 1. BUSINESS ACUMEN Improving Your Capabilitiesto Deliver Real Value to your Organisation
- 2. The Business ModelCanvas
- 3. Click to editMaster title style 3 A business model is the integrated manner in which an organisation determines its customer’s needs, and designs its enterprise to provide products and services that respond to those needs, providing returns that ensure its success and growth. What is a Business Model?
- 4. Click to editMaster title style 4 • Organisations exist to create value for their customers, shareholders, and employees. The choices made by leaders about how best to create this value can be captured in a simple equation: The markets/customers targeted/their needs +The value proposed (products/services) +The organisation's capabilities + Advantage when compared to competitors = Customer, Shareholder, and Employee Results What is a Business Model?
- 5. The value propositionof what is offered to the market. The segment(s) of clients that are addressed by the value proposition. The communication and distribution channels to reach clients and offer them the value proposition. The relationships established with clients. The key activities and resources needed to implement the business model. The Core internal capabilities required to execute the business model. The key partners and their motivations to participate in the business model. The revenue streams generated by the business model (constituting the revenue model). The cost structure resulting from the business model.
- 6. VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL KEY ACTIVITIES / RESOURCES CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS gives anoverall view of a company's bundle of products and services portrays the network of cooperative agreements with other companies describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources explains the relationships a company establishes with its customers sums up the monetary consequences to run a business model describes the revenue streams through which money is earned describes the customers a company wants to offer value tooutlines the capabilities required to run a company's business model INFRASTRUCTURE CUSTOMER OFFER FINANCE Describing A Company’s Business Model
- 7. Click to editMaster title style 7 DescribesWho a Company OffersValueTo Describing TheTarget Market : Customer TARGET CUSTOMER target customer 1 target customer 2 … CUSTOMER
- 8. Click to editMaster title style 8 • For whom are we creating value? • Who are our most important customers? Characteristics – Mass Market – Niche Market – Micro Market – Segmented – Diversified Customer
- 9. Click to editMaster title style Describing A Company’s Offer Value Proposition TARGET CUSTOMER VALUE PROPOSITION target customer 1 target customer 1 … value proposition 1 value proposition 2 … OFFERCUSTOMER Value Proposition
- 10. Click to editMaster title style 10 • A customer value proposition gives an overall view of a company's bundle of products, services and client solutions. • It is the sum of the total benefits a customer is promised in return for a payment (or other value transfer). It entail answering questions such as: o What value do we deliver to the customer? o Which one of our customer’s problems are we helping to solve? o What bundles of products and services are we offering to each Customer Segment? o Which customer needs are we satisfying? Value Proposition
- 11. Click to editMaster title style 11 Characteristics ofValue Propositions – Performance – Customisation – Newness – Design – Brand/Status – Price – Cost Reduction – Risk Reduction – Accessibility – Convenience/Usability Value Proposition
- 12. Click to editMaster title style 12 Most often, a real value proposition comes from: • Better process (Walmart) • Better people (McKinsey & Company) • Better raw materials (luxury food items) • Scarcity (diamonds) Value Proposition
- 13. Click to editMaster title style 13 Describes How a Company Reaches Its Customers Distribution Channel VALUE PROPOSITION TARGET CUSTOMER DISTRIBUTION CHANNEL value proposition 1 value proposition 2 … distribution channel 1 distribution channel 2 … target customer 1 target customer 2 … CUSTOMEROFFER
- 14. Click to editMaster title style 14 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? Customer
- 15. Click to editMaster title style 15 Channel phases: 1) Awareness How do we raise awareness about our company’s products and services? 2) Evaluation How do we help customers evaluate our organisation’s Value Proposition? 3) Purchase How do we allow customers to purchase specific products and services? 4) Delivery How do we deliver aValue Proposition to customers? 5) After sales How do we provide post-purchase customer support? Channel
- 16. Click to editMaster title style VALUE PROPOSITION TARGET CUSTOMER CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … relationship type 1 relationship type 2 … target customer 1 target customer 2 … CUSTOMEROFFER Describes the Relationships a Company Builds Relationship Management 16
- 17. Click to editMaster title style 17 What type of relationship does each of our Customer Segments expect us to establish and maintain with them? • Which ones have we established? • How are they integrated with the rest of our business model? • How costly are they? Relationship Management
- 18. Click to editMaster title style 18 • Examples – Personal assistance – Dedicated Personal Assistance – Self-Service – Automated Services – Communities – Co-creation Relationship Management
- 19. Click to editMaster title style TARGET CUSTOMER REVENUE STREAM revenue stream 1 revenue stream 2 … target customer 1 target customer 2 … FINANCE VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER CUSTOMER Describes How a Company Makes Money Revenue Streams 19
- 20. Click to editMaster title style 20 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? Revenue Streams
- 21. Click to editMaster title style 21 Types: • Asset sale • Usage fee • Subscription Fees • Lending/Renting/Leasing • Licensing • Brokerage fees • Advertising Fixed pricing • List Price • Product feature dependent • Customer segment dependent • Volume dependent Dynamic pricing • Negotiation( bargaining) • Yield Management • Real-time-Market Revenue Streams
- 22. Click to editMaster title style DescribesWhat Activities are Required VALUE PROPOSITION KEY ACTIVITIES/RESOURCES CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … activity 1 activity 2 … INFRASTRUCTURE OFFER Key Activities 22
- 23. Click to editMaster title style 23 What Key Activities do ourValue Propositions require? • Our Distribution Channels? • Customer Relationships? • Revenue streams? Categories • Platform/Network • Production • Problem Solving Key Activities
- 24. Click to editMaster title style CORE CAPABILITIES VALUE PROPOSITION core capability 1 core capability 2 … value proposition 1 value proposition 2 … OFFERINFRASTRUCTURE DescribesWhat Capabilities are Required Core Capabilities/Key Resources 24
- 25. Click to editMaster title style 25 • What Key Resources do ourValue Propositions require? • Our Distribution Channels? Customer Relationships? • Revenue Streams? Types of resources • Physical • Human • Intellectual (brand patents, copyrights, data) • Financial Core Capabilities/Key Resources
- 26. Click to editMaster title style Describes the Partners that Leverage the Business Model VALUE PROPOSITION PARTNER NETWORK CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … partner 1 partner 2 … INFRASTRUCTURE OFFER Key Partners 26
- 27. Click to editMaster title style 27 • Who are our Key Partners? • Who are our Key Suppliers? • Which Key Resources are we acquiring from partners? • Which Key Activities do partners perform? Motivations for partnerships: • Optimisation and economy • Reduction of risk and uncertainty • Acquisition of particular scarce resources and activities Key Partners
- 28. Click to editMaster title style VALUE PROPOSITION COST STRUCTURE cost account 1 cost account 2 … value proposition 1 value proposition 2 … FINANCEINFRASTRUCTURE OFFER Describes the Costs of a Business Model CORE CAPABILITIES core capability 1 core capability 2 … Cost Structure 28
- 29. Click to editMaster title style 29 • What are the most important costs inherent in our business model? • Which Key Resources are most expensive? • Which Key Activities are most expensive? Is your business more: • Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) • Value Driven ( focused on value creation, premium value proposition) Sample characteristics: • Fixed Costs (salaries, rents, utilities) • Variable costs • Economies of scale • Economies of scope Cost Structure
- 30. Click to editMaster title styleSample Business Models
- 31. Click to editMaster title styleSample Business Models
- 32. Click to editMaster title styleSample Business Models
- 33. Click to editMaster title styleSample Business Models
- 34. Click to editMaster title styleSample Business Models
- 35. Click to editMaster title styleSample Business Models
- 36. Click to editMaster title styleSample Business Models
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