(2) 111 Understanding Business

Learning Objectives

1. Explain how the purpose of the business impacts business processes and people.

2. Explain the concepts of value creation and value capture and how these relate to the concept of a business model.

3. Identify and explain key components of the Business Model Canvas (BMC).

4. Identify and explain key components of Kaitiaki Business Models.

5. Use academic databases to find relevant, credible sources for your academic writing and explain the differences between academic and popular press sources.

Team Excercise 1: AI Enhanced Learning Moment

Enter definitions into ChatGPT (your choice of AI) to provide you with a condensed definition.

Before AI:

A business model defines how a company generates value and captures some of it as profit. A business model's essence is in defining how the enterprise delivers value to customers, entices customers to pay for value, and converts those payments into profit. It reflects the management's hypothesis about what customers want, how they want it, and how the enterprise can organize to meet those needs best, get paid for doing so, and make a profit. Business models are important as they communicate what is important to the business. It directs how a company operates. creates value for stakeholders, and aims to capture value. Provides logic in how the value proposition is articulated, the target market is identified, and the revenue mechanisms and the entire value chain are defined.

After AI:

A business model outlines how a company creates value, attracts customers, and converts that value into profit. It represents the company's strategy for meeting customer needs, organizing resources, and generating revenue. It reflects the management's assumptions about customer desires and guides decisions on delivering value, earning payment, and achieving profitability. Business models are crucial because they communicate the company’s core objectives, shape its operations, and define how it serves stakeholders. They clarify the value proposition, identify the target market, and detail revenue strategies, helping ensure the company's overall success.

Dating Apps: Creating value

-Companionship

-Friendships

-Relationships

-Dating

-Wife/Husband

-Broader reach: outside of the country, more people

-Specific: dating, relationships, cancels out other people

-Diversity: more cultures and ethnicities

-Privacy: Boundaries

Value creation and Value capture: Revenue Logic

High value: costs of a good or service

High value to the customer/ Low value to business: Customer wants it/needs, but the company is not capturing enough of the value to cover costs ad make a profit (high demand, low production)

Value to customer is low/Value to business is low: customer is not willing to pay price, business does not have pricing where it can make value