1. The Business Model Canvas: A tool for understanding your organization and it’s opportunities for growth
Emerald Valley Development Professionals
April 9, 2013
Nathan Lillegard, Program Manager
Lundquist Center for Entrepreneurship
University of Oregon

2. Business Model Canvas
A new tool for understanding businesses interconnected relationships An international ‘movement’ Read the book – Or – watch the movie!

3. Customer Relationships
Activities
Partnerships
Value Propositions
Customer Segments
Channels
Resources
Costs
Revenue

4. Components of the Canvas
Value Orientation
Value Proposition – The key ideas that create value for your customer segments
Customer Segments  – The different groups of people you’re trying to reach and serve
Customer Relationships – The types of relationships you have with your customer segments
Channels – How you reach your customer segments
Costs Orientation
Key Activities – What you do every day to make the model work
Key Partners – Your suppliers and partners that help you make the model work
Key Resources – The most important assets you used to create value
Cost Structure – All the costs involved in running the business
Revenue Streams – Where you make cash from your customer segments

5. Efficiency
Value

6. Business Linguistics

8. Customer Segments
Mass market – consumer goods/electronics Niche market – supplier/buyer (auto parts) Segmented – different customers, different needs; can require unique business models Diversified – multiple unrelated segments

9. Value Propositions
Newness – often technology related Performance – improve upon existing offerings Customization – tailor to customer needs “Getting the job done” – bundled convenience Design – aesthetics and fashion are important

10. Value Propositions cont’d
Brand/Status – appearance of advantage Price – similar lower price Cost reduction – helping customers reduce costs Risk reduction – service guarantees/agreements Accessibility – opening new markets to offerings Convenience/Usability – make it easier for customers

11. Channels
OWN your channel, or PARTNER with others Channels are direct (d) or indirect (i) If you OWN, you might have… Sales force(d), web storefront(d), b&m stores(i) If you PARTNER, you work with partner stores(i), or through wholesalers(i).

12. Channel Phases All channels have 5 distinct phases:
Awareness – how customers hear about you
Evaluation – assessing your VP
Purchase – how customers buy
Delivery – how customers receive
After sales – post-purchase support
Different phases can have different channels

13. Customer Relationships
Personal Assistance – 1:1 human interaction Dedicated Pers Assistance – concierge service Self Service – (YOYO) Automated Services – ATM service, websites Communities – create cohort/affinity groups Co-creation – customers help make relationships

14. Revenue Streams
One time transaction or recurring… Asset sales – physical product transfer Usage fee – hotels, phones, etc… Subscription fees – gyms, magazines, SaaS Lend/Rent/Lease – temporary exclusive rights Licensing – permission to use IP Brokerage fees – intermediate between parties Advertising – selling exposure

15. Pricing Separate from Revenue Streams… Either FIXED or DYNAMIC
FIXED types: List Price, Product Features, Customer Segment, Volume
DYNAMIC types: Negotiated price, Yield (airline/hotel), Real-time markets, Auctions/comp bid

16. Key Resources
Depending on your Value Prop, Channels, Relationships, and Revenue Stream…
What resources do you need to execute?
These can be owned, leased, or partnered
Physical (buildings, machines, etc.)
Intellectual (IP, brand, knowledge)
Human – specific skills and training
Financial – cash, credit, vendor financing

17. Key Activities
Production – design, make, and deliver Problem Solving – New solutions to individual problems (typically service orgs) Platform/Network – maintaining the equity of your offering (Ebay, Visa, Microsoft, Apple)

18. Key Partnerships Four types of partnerships
Strategic alliances between non-competitors
Coopetition: between competitors
Joint Ventures to develop new business
Buyer-Supplier relations to ensure reliability
Why partner?
Optimization and economy of scale
Reduce risk or uncertainty
Acquire particular resources or activities

19. Cost Structure Cost Driven – Focus on minimizing costs
Value Driven – Focus on value creation
Either focus has these components:
Fixed costs
Variable costs
Economies of Scale
Economies of Scope

20. Get started!
Paper and pen:
Online –