Info 4 mar

B2C Business Model Overview

• Customer Value Proposition: Defines what value the business offers to customers.

• Profit Formula: Outlines how the company will generate revenue and manage costs.

• Key Processes: Essential activities needed to deliver the proposed value.

• Key Resources: Resources needed for operations and delivery of value.

• Business Logic: Combined elements explain how a business operates, including value trading and revenue generation.

Power of B2C Models

• Key Factors Contributing to Power:

  • Data and Analytics: Improves targeted marketing and customer engagement.

  • Efficiency and Cost Reduction: Streamlining operations to enhance profitability.

  • Long Tail Profits: Ability to profit from niche markets not addressed by traditional off-line models.

  • Global Reach: Extending market reach beyond physical boundaries.

Example: Consumer Razor Market

• Historical Context:

  • Gillette dominated with technological advancements in razors.

  • Features evolution: from safety to double blades to multiple blade systems.

• Market Dominance:

  • Gillette holds 70% of the global market, heavily investing in advertising (around $300 million).

• Pricing Strategy:

  • Initial product pricing is low, while accessories are priced high, resulting in significant markups (around 4,000%).

• Disruption Opportunity:

  • New entrants like Dollar Shave Club target overshooting needs of average consumers with a simpler model.

Dollar Shave Club Case Study

• Business Strategy:

  • Focused on essentials; outsourced production and fulfillment to reduce capital costs.

  • Direct-to-consumer sales model enhances customer relationship.

• Marketing Approach:

  • Invested in digital marketing using social media and viral videos, avoiding traditional advertising.

• Financial Success:

  • Gained over 3 million subscribers within two years; acquired for $1 billion.

B2B Model Landscape

• Types of B2B Networks:

  • Distributors: Hold inventory and deliver to businesses.

  • Exchanges: Online marketplaces for business transactions.

  • Consortiums: Industry-focused marketplace for procurement among businesses.

  • Private Networks: Exclusive marketplaces created for specific business purposes.

• Technological Advancements:

  • Shift from rigid pipelines to more agile, interconnected systems of transactions.

Digital Platforms and Tech Giants

• Examples of Dominant Platforms:

  • Amazon, Meta, Google, Apple, etc.

• Key Strengths:

  • Continuous innovation driven by extensive data analytics.

  • Strong network effects enhancing user engagement and service value.

• Challenges and Opportunities:

  • Need to balance the interests of users, developers, and advertisers in a competitive ecosystem.

Ecosystems and Value Creation

• Understanding Ecosystems:

  • Products and services viewed as part of larger interconnected systems.

• User Engagement:

  • Value derived from not just the product, but from user interactions and developer contributions.

• Strategic Leveling:

  • Companies must align user needs with developer incentives for effective ecosystem management.

Network Effects in Platforms

• Types of Network Effects:

  • Direct: Value increases as more users of the same type engage (e.g., social media).

  • Cross-Sided: Value increases for one group as usage grows in another (e.g., buyers attracting more sellers).

• Vicious vs. Virtuous Cycles:

  • Importance of attracting balance in users to maintain platform viability.

Data Generation and Insights

• Data as Power:

  • Platforms leverage vast amounts of user data to improve service offerings and market analysis.

• Integration Challenges:

  • Application programming interfaces (APIs) allow third-party developers to join the platform ecosystem, creating additional value.