Tools for Transforming Ideas into Strategy By Eliza Chute and Kym Cole

Eliza Chute – Penn Grad ’10 – Earth Rights International Kym Cole – Penn Grad ’11 – Fulbright Scholar Founders of Interprise Investment Fund Organizing partners of Gazaab SmallWorld Entrepreneur Creation Challenge

Contact Us! Gazaab SmallWorld Entrepreneur Creation Challenge

Idea Ping Pong

Directions: 1) Form groups of 5 to 6 people. 2) One person should take 2 minutes to explain his/her business idea. 3) As the speaker is explaining, each member of the group writes down ideas and suggestions on a post-it. 4) Next, each member of the group shares his/her ideas with the speaker. 5) Don’t forget to give the speaker your post it!

Business Model Canvas

What is it? Business Model: describes the rationale of how a business creates, delivers, and captures value Business Model Canvas: a tool to analyze, discuss and describe a business model – Blueprint – 9 Basic Building Blocks

Customer Segments Customers can be divided into different segments based on common needs, behaviors, etc. Customer groups represent different segments if – They are reached through different channels – They require different relationships – They have largely different profitability

Different Types of Customer Segments Mass Market Niche Market Segmented Diversified Multi-Sided Platform

Example For whom are we creating value? What are our customer segments? Who are our most important customers?

Customer Relationships Describes the types of relationships a company establishes with specific Customer Segments. Possible motivations: Customer acquisitionCustomer retentionIncreasing sales

Example What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which relationships have we established? How costly are these relationships?

Value Propositions Reason a customer turns to one company over another Solves a problem or satisfies a need – New offer or existing offer with added benefits Each VP is a bundle of products or services that satisfies the requirements of a specific customer segment

Example What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying?

Channels Describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.

Example How do our Customer Segments want to be reached? Which channels work best and are most cost efficient? How can we integrate our channels with customer routines?

Revenue Streams Represents the cash a company gets from each of its customer segments 2 different Types of revenue streams – Transaction and recurring

Different Ways to Generate Revenue Streams Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising

Example What are the customers willing to pay for the value? What do they currently pay? (competitors) What does each revenue stream contribute to overall revenues?

Key Resources The most important assets required to make a business model work. Types of resources: Physical Intellectual Human Financial

Key Activities The most important things a company must do to make its business model work Categories of Activities – Production – Problem Solving – Network/Platform

Example What key activities do our value propositions require? – Distribution channels? – Customer relationships? – Revenue Stream?

Key Partners The network of suppliers and partners that make the business model work. Motivations for partnerships: – Optimization and economy of scale – Reduction of risk and uncertainty – Acquisition of resources and activities

Cost Structure The costs incurred to operate a business model What type of business is it? Cost Driven Value Driven

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Eliza Chute – Penn Grad ’10 – Earth Rights International Kym Cole – Penn Grad ’11 – Fulbright Scholar Founders of Interprise Investment Fund Organizing partners of Gazaab SmallWorld Entrepreneur Creation Challenge

Contact Us! Gazaab SmallWorld Entrepreneur Creation Challenge