Tarragona Consulting – Consultoria : Business model
Before we start talking about this tool, designed by Alexander Osterwalder, should stop and think what we’re talking about, that is, What is a business model?
A business model is not a business plan, but the first step to the business plan.
A business model is the description of how a company gets its benefit.
The business model canvas, serves to capture in a single page our business model. Canvas canvas means English, so it is like having all my business model on a single canvas with all its elements in sight.
The canvas has 9 rectangular boxes that are filled in a certain order.
ORDER CASILLAS business model canvas
The boxes listed in the order that must be filled are:
Sources of Income
Some of the most important features of this tool management are as follows:
It is an easily understandable format, which helps us land the idea before risking anything.
We have to fill forced to think about all aspects that influence the business.
It can be used as a prototype, adapted and redesigned, for example to find the right business model more when launching an innovative product.
It helps to question the current business model and to design a new one.
It involves studying the current needs of customers and find a way to satisfy
We can draw the business model of our competitors.
It helps to be concise when explaining our business model through all aspects
The boxes can be grouped into four blocks, which include the following:
4 canvas AREAS business model
WHAT ?, A single box that refers to what we market seen from the value that will bring the customer
TO WHOM? The boxes of this block talk about our company outward, toward the customer
AS? The checkboxes in this block talk about what happens inside our company
HOW MUCH? With these boxes we value the viability of the business
It works with sticky notes on a wall on which hit a paper craft. Thus if we are reconsidering ideas, you just have to replace a note on the other. We get something like this:
EXAMPLE CANVAS BUSINESS MODEL
Let’s take a tour on the canvas of the business model to give a small strokes on each of the boxes, and pick the issues that Alexander Osterwalder invites us to ask for the correct preparation of the canvas:
1. MARKET SEGMENTS.
• Who we are creating value?
• Who are our most important customers?
It should be remembered that a market segment is a set of customers with needs, behavior and common attributes. These customers may be individuals (B2C) or businesses (B2B).
If we have several market segments reason it is to make a different canvas for each segment. For example, if we were talking about a free distribution newspaper, we would have to address two different market segments, readers and advertisers. Another option is to use a different colored sticky notes to each market segment.
2. VALUE PROPOSITION
• What is the value we provide to the customer?
• What we help them solve the problem?
• What needs satisfy customer?
• What product packages offer each customer segment?
The value proposition is the set of products or services that create value for a specific market segment. Its purpose is to solve a problem or meet a need.
It is useful to use a map of empathy to help us put ourselves in the client’s skin. We can also use it with sticky notes.
There is another very useful to engage the value proposition well with customers is the Canvas of the Value Proposition, also designed by Alexander Osterwalder and tool that looks like this:
3. CHANNELS: (DISTRIBUTION, COMMUNICATION AND SALE)
• What channels our customers prefer?
• How do we establish contact with customers?
• How our channels are combined?
• What have better results?
• What are the most profitable?
• How are integrated into the daily activities of customers?
Communication channels, distribution and sales are the way by which we reach the customer value proposition.
They can be direct or indirect channels.
The channel has 5 phases:
1 Information about the product
2 Evaluation of the value proposition
5 After sales service
4. RELATIONS WITH CLIENTS
• What kind of relationship customers expect?
• What kind of relations we have established?
• What is the cost?
• How are integrated into our business model?
Customer relationships can be based on customer acquisition, loyalty or stimulating sales.
Social networks and 2.0 environments in certain businesses are a good way to interact with customers.
5. SOURCES OF INCOME:
• Why else are our customers willing to pay?
• Why else you pay now?
• How currently you pay?
• How would you like to pay?
• How reported the different sources of income to total income?
Examples of different ways to generate income:
• Sale of product or service
• Use Fees
• Subscription Fee
• Hire, loan, leasing
• Licensing of use
6. KEY RESOURCES:
• What key resources require our value proposition, distribution channels, customer relations, and sources of income?
Key resource categories:
• Physical: premises, vehicles … ..
7. KEY ACTIVITIES:
• What key activities require our value proposition, distribution channels, customer relations, and sources of income?
For example, for a manufacturer of software development will be key software and hardware for one will be managing the supply chain.
Depending on the business some activities will be more relevant than others.
8. PARTNERSHIPS KEY:
• Who are our key partners?
• Who are our key suppliers?
• What key resources acquired our partners?
• What key activities do partners?
Sometimes companies partner to achieve economies of scale, or strategic alliances.
This section is necessary to be aware of the key vendors we have for running the business and assess the risks associated with such partnerships.
9. COST STRUCTURE:
• What are the most important costs inherent to our business model?
• What are the most expensive key resources?
• What are the most expensive key activities?
It is important here inventorying all the costs that will have to bear and to distinguish between fixed and variable costs.
Fixed costs: I have whether they sell more or less.
Variable costs: depend on the units sold.
To summarize let’s stay with the idea that no single business model, but many , and we need to discover what is best for us and reflect on that model every so often , as in evolving our environment and our competitors , we readaptarnos , and we may be forced to evolve our business model to one that is better suited to the new situation. all must continually question and do with this tool is easy.
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