DBM class 3

1st wave of business modeling (1990s)

• web 1.0

  • within value chain, perspective of 1 company: how to create more value on the internet

  • E-commerce: new channel, new application, new revenue stream

• 1st wave of business model literature

  • taxonomies of revenue models

2nd wave of business modeling (2000s)

• towards value networks, how to capture value, how to keep control

• 2nd wave of business model literature

• business model

  • apply new technological possibilities for strategic goals

  • from focus only on value to focus on value + control

  • from 1 company in value chain to value network

3rd wave of business modeling (2010s)

• towards ecosystems around platforms

• from one-sided to two-sided to multi-sided markets

• from supply chain management to ecosystem management

• how to generate huge diversity without losing control over overall direction and value capturing

Osterwalder business model canvas

• the current standard for business modeling

• often used in brainstorming and workshop mode

• 9 building blocks

Business model canvas building blocks

• key partners

• key activities

• key resources

• value proposition

• customer relationships

• customer segments

• channels

• cost structure

• revenue streams

Value proposition

is the core value a company delivers to its customers

• explains why customers choose a product or service over competitors

• it addresses customer needs, pain points, and benefits in a unique way

• can be based on innovation, price, convenience, customization, performance or brand

customer segments

define the specific groups of people or businesses a company aims to serve

• businesses categorize their customers based on needs, behaviors, demographics, or other characteristics

• identifying the right customer segments allows businesses to tailor their value proposition, pricing, and marketing strategies effectively

Types of customer segments

• geographic

• demographic

• behavioural

• interest

• technology

• persona-based segmentation

• micro segmentation

• platform business models segment the supply side

Customer relationships

defines how a company interacts with its customers to build trust, engagement, and loyalty

• it describes the type of relationship a company establishes with each customer segment to attract, retain, and grow its customer base

types of customer relationships

• personal assistance

• self-service

• automated services

• online communities

• co-creation

• subscription-based models

Channels

define how a company delivers its value proposition to its customer segments

• they represent the touchpoints through which customers discover, evaluate, purchase, and receive a product or a service

• channels are essential for creating brand awareness, enhancing customer experience, and driving sales

Types of channels

• direct (company-owned stores, websites)

• indirect (third-party retailers, distributors)

• physical (brick-and-mortar stores)

• digital (e-commerce, social media, mobile apps)

• hybrid (combining onine and offline experiences)

Revenue models

defines how a company generates income from its products or services

• they outline the pricing strategies and payment structures that allow a business to capture value from its customers

• revenue models are essential for sustainability, profitability, and scalability, shaping how a company monetizes its value proposition

Types of revenue models

• transaction-based (one-time payment)

• subscription-based (recurring payments)

• freemium (free with paid upgrades)

• advertising (ad-supported content)

• commission-based (fees on transactions)

• data monetization (selling insights and analytics)

Cost structure

defines the major costs incurred to operate a business and deliver its value proposition

• it helps companies understand fixed vs variable costs and optimize expenses for profitability

types of cost structures

• cost-driven models (minimizing costs)

• value-driven models (premium pricing)

• fixed costs

• variable costs

• economies of scale

Key activities

are the critical tasks and processes a company must perform to successfully deliver its value proposition and operate its business model

• these activities ensure product development, customer engagement, and operational efficiency to create and sustain value

Types of key activities

• production (manufacturing products)

• problem-solving (consulting)

• platform/network management

• marketing/sales

Key assets/resources

are the critical assets a business needs to create and deliver its value proposition, maintain operations, and stay competitive

• these resource enable companies to build products, serve customers, and generate revenue effectively

Types of key resources

• physical resources

• intellectual property

• human resources

• financial resources

Key partners

are external companies or stakeholders that help a business operate efficiently, reduce risk, or enhance its value proposition

• partnerships enable businesses to leverage resources, access to markets, and optimize operations through strategic collaborations

Types of key partnerships

• strategic alliances (non-competitors)

• joint ventures

• supplier relationship

• platform partnerships

SWOT analysis

a structured framework used to evaluate a company’s competitive position and to develop strategic planning by analyzing its strengths, weaknesses, opportunities, and threats

How is SWOT used

• often applied in strategy development, risk management, and decision-making

• allows businesses to leverage strenghts, improve weaknesses, capitalize on opportunities, and mitigate threats

Strenghts

• advantages

• unique and low-cost resources

• factors mean that you ‘get the sale’

Weakness

• disadvantages, limitations

• what could you improve

• factors lose you sales

Opportunities

• chances to improve performance

• good opportunities that you can spot

Threats

• external trouble for your business

• obstacles you need to face

• what your competitors are doing