Building up business model

Business model is description what a company offers its

customers, how it reaches them and relates to them, through which resources, activities and partners it achieves this and finally, how it earns money.

Business model describe the products and services

offered for sale, business infrastructure to produce and sell these products and services, the customers that the company targeted to buy these products and services, and financial performance and profit the company expects to achieve. Our business model should answer the question of how our venture will make money

Business model can be defined around 7 main areas Building blocks Value proposition of our offer to market (The offer) Client segmentation for our value proposition Channel design to communicate and distribute our value
proposition and reach customer. Key resources needed Key activities to implement our (BM) Revenue model design Cost structure resulting from our (BM)

Value proposition of our offer to market (The offer) Value proposition is: Analysis the offer in terms of the opportunity, market, The

instruments and resources needed, and The risk involved Description of products and services the business offers and why customers would buy them. Describes the problem of customers are experiencing and how the products and services offered to help solve that problem. Describes how the characteristics and features of products and services that help solve customers problems.

Does our value proposition still cater well enough to our clients needs? Do we know how our customers perceive our value proposition? Are our competitors offering similar value propositions at similar or better prices? How well are our customers served by other competitors?

Client segmentation for our value propositionWho are our customers

Business model building Description objective

Customer segments Our group of customers with distinct characteristics List the customer groups we are serving Regroup them in terms of different needs and ways of reaching them or as to profitability.

 Do we know our customers and their

needs good enough? Are some customer groups likely to defect soon? Do we regroup different customer segments well enough

Channel design to communicate and distribute our value proposition and reach customer.
Business model building Description Communication and distribution channels The channels through which we communicate with our customers and through which we offer our value propositions Identify the channels through which we offer our value propositions to each customer segment

Objective

 Do we have a well thought-through

communication and distribution channel design? How well do we reach our clients? Do we know how successful our channels are in terms of customer acquisition? How well are our different channels integrated? Do we know how cost efficient are our channels are? Do we use the right channels for the right clients (e.g. in terms of profitability)?

Key resources needed

Business model building Description Key recourses The key resources we need to make our business Model function

Objective

What are the key resources we rely our business

model How does each of these resources relate to our value propositions and their corresponding customer segment, channels and relationship

Key activities to implement our (BM)

Business model building Description Key activities The most important activities that have to be performed to run our business model

Objective

What are the main activities we operate to run our

business model? On which key resources do they rely? To which value propositions, channels or relationships do they contribute?

Revenue model design

Business model building Description Revenue model The streams through which we earn our revenues from our customers for value creating and customer facing activities

Objective

What are our revenue streams? What are the revenue streams from each customer

segment and value proposition? How much is each revenue streams contribution to overall revenues in terms of percentages?

Cost structure resulting from our (BM)

Business model building Description Objective Cost structure The costs we incur to run our business model

What are the most important cost positions in our business

model? Can the cost positions be easily connected to a business model building block? Can costs be calculated for each customer segment?

Business model flow

The opportunity
Solution offered to customer Description of product & services

The market
Assessing the external validity and consistency of the opportunity
The instruments and resources needed Assessing the external validity and consistency of the opportunity Marketing Plan Business Operations Management team & HR Financial Resources

The risk the core assumptions

From theory to practice SEDCO Business Model

Infotrix Value proposition to market (why customers will purchase Infotrix: 1- the only solution which available in the market covered, CVM, DS, Self service and customer feedback (cover all customers needs) 2- Recent years, the concepts of mass customization and customer co-creation have gained
importance. This approach allows for customized products and services (customization)