The Business Model Canvas The Building Blocks for a Successful Business PCBN Pacific Coast Business Networking June 10, 2015

Platform To build a long-term sustainable advantage, you need to build a platform.

Building Blocks for a Successful Business Three major elements for all businesses 1. Marketing Customer Segments Value Propositions Channels Customer Relationships Key Partnerships 2. Profit Revenue Streams Cost Structure 3. Infrastructure - Key Resources - Key Activities - Culture

Building Blocks for a Successful Business Marketing Customer Segments Value Propositions Channels Customer Relationships

Customer Segments A business should serve one or more customer segments. Identify segments with common needs & common behaviors. Design the business around a strong understanding of specific customer needs.

VALUE PROPOSITIONS Seek to solve customer problems and satisfy customer needs with value propositions. The value proposition is the reason why customers turn to one company over another.

CHANNELS Value propositions are delivered to customers through communications, distribution and sales channels. Identify how best to communicate with & reach your customers to deliver the value proposition. Channels are customer touch points.

Customer relationships are established and maintained with each customer segment. Clarify the type of relationship you want to establish with each customer segment. Social networks are an important resource in maintaining relationships. Customer Relationships

Profit Revenue Streams Cost Structure Building Blocks for a Successful Business

REVENUE STREAMS Revenue streams result from value propositions successfully offered to customers. Revenue streams can have 2 types: 1. Transactions 2. Recurring revenues – relationships that generate ongoing payments.

COST STRUCTURE The cost structure describes all costs incurred to operate the business. Costs should be minimized where practical, but optimized to deliver value. Cost-driven business models are difficult to maintain, are very competitive and attract price conscious customers.

Infrastructure Key Resources Key Activities Key Partnerships Building Blocks for a Successful Business

KEY RESOURCES Key resources are the assets required to offer and deliver the previously described elements. Key resources can be physical, financial, intellectual, or human. They can be owned or leased. Different key resources are needed for different businesses.

KEY ACTIVITIES Key activities are the most important things you must do - to achieve results. They are required to create and deliver the value proposition, reach markets, maintain customer relationships, and earn revenues.

Key Partnerships Some activities are outsourced and some resources are acquired outside the enterprise. They include the network of suppliers & partners that make the business successful. Alliances optimize business performance, reduce risk & help acquire needed resources.

There can be four types of partnerships: 1. Strategic alliances 2. Cooperation 3. Joint ventures 4. Buyer-supplier relationships Key Partnerships (Continued)

Encourage Creativity and Innovation Anticipate and Adapt to Change Ask Questions before Offering Solutions Value Others Opinions Have a Plan with a Vision and Share It Encourage Communications Across Levels Get Customers to think of “Us” vs “You” Culture