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Plgh CrowLh Manual

8uslness Model Canvas




High Growth Foundation
Business Model Canvas


Winning Pitch 2
Plgh CrowLh loundaLlon - Plgh CrowLh Manual
8uslness Model Canvas

When to use
Broadly this is a tool for analysing a current business or developing new revenue streams.

What you get
A single-page illustration of existing or new business models. This is an extremely powerful tool and
complements other Winning Pitch tools perfectly, such as the Orbit, Single-Page Plan and Strategy
canvas. Its power comes from the ability to use it to blend a wide range of other strategy models,
including Blue Ocean Strategy, Value Disciplines, a very detailed SWOT analysis, Ansoff matrix,
Product Life Cycle. You might also use the tool to analyse key competitors.

Time
2 to 3 hours.

Number of people
Best with several people from management and senior team

Equipment
Poster (downloadable free from http://www.businessmodelgeneration.com/downloads.php - this is best
printed A0-sized), Post-It notes and pens.

Example


High Growth Foundation
Business Model Canvas


Winning Pitch 3
How the Business Model Canvas works
The Business Model Canvas comprises 9 blocks within 4 areas (below) .


Overall Process
There are 5 steps of business model design
1. Visualise describe the existing business model. This is the content of this tool.
2. Assess strengths and weaknesses of the model. Osterwalder & Pigneurs book has a
comprehensive strengths and weaknesses analysis.
3. Innovate brainstorm session on improvements and opportunities.
4. Plan using Orbit & Single-Page Plan tools.
5. Implement using MOT, for example

Method to Visualise the existing Business Model
The process uses Post-It notes onto an A0-sized Business Model Canvas. Like the Single-Page Plan
and Orbit this is a document that should not have huge detail, but covering most important areas.

Step 1) Value proposition GIVE CUSTOMERS WHAT THEY WANT
What problems / needs do you solve? Why do customers use you?

Step 2) Customers GET & KEEP THE RIGHT CUSTOMERS
Who are your most important customers? What relationship do customers expect with you? How do
you distribute your products / services? How do you make potential customers aware of you and your
products / services?

Step 3) Infrastructure BUILDING AN UNFAIR ADVANTAGE
What activities, resources do you need? What do you do yourselves that competitors cannot copy?
What do can partners do more cheaply or more effectively?

Step 4) Financial TURN CUSTOMERS VALUE INTO CASH
How much does this cost and how much money will you make? How will customers pay?

An alternative process might be Customers Value proposition Infrastructure Finance


Key questions and triggers
The following pages cover some guidance, key questions and triggers for each of the 9 blocks of the
Business Model Canvas.

High Growth Foundation
Business Model Canvas


Winning Pitch 4
Get and keep the right customers - Customer Segments
For whom are we creating value by turning a need into demand?
Who are our most important customers?

Customer groups represent different segments if
Their needs require and justify a distinct offer
They are reached through different distribution channels
They require different types of customer relationships
They have substantially different profitability
They are willing to pay for different aspects of the offer
Types of customer segment
Mass market
Niche market
Segmented
Diversified
Multi-sided

Possible triggers
Geography Demography
B2C / B2B
Wealth skills
Time
Accessibility
Sustainability
Buying process
Technology adoption life cycle
Unit of business
Distribution channels
Customer relationships
Needs
Desires
Ambitions
Profitability


Get and keep the right customers - Customer relationships
What relationships do customers expect with us?

The right customer relationships
Help us to acquire our customers
Boost customer retention
Enable up-selling
At an acceptable cost
And help to turn future needs into demand
Categories of customer relationships
Personal assistance
Dedicated personal assistance
Self service
Automated service
Communities
Co-creation

Possible triggers
Cost
Experience
Time
Change
Technology


High Growth Foundation
Business Model Canvas


Winning Pitch 5
Get and keep the right customers - Distribution Channels
How will we reach our customer segments?
Which ones work best?
Which ones are most cost-efficient?

How do we use distribution channels to
Make customers aware that we are offering something they want?
Help customers evaluate our value proposition?
Allow customers to purchase specific products and services?
Deliver our value proposition to customers?
Provider customer support?

Possible triggers
Direct channel types
Own sales force
Partner sales force
Web sales
Indirect channel types
Own stores
Partner stores
Wholesale
Channel phases
1. Awareness
2. Evaluation
3. Purchase
4. Delivery
5. After sales
6. Re-purchase


Give Customers what they want - Value propositions
Which one of our customers problems / needs are we solving? Why us?
What value do we deliver to the customer?

A value proposition
Is the reason customers choose one company over another
Creates value for the customer by solving a problem perceived by the customer
Comprises a select bundle of products and services catering to a customers segments needs

Possible triggers
Newness
Performance
Getting the job done
Design
Customisation
Brand/identity
Price
Cost reduction
Risk reduction
Accessibility
Convenience
Sustainability
Ethics
Bundles of products and
services


High Growth Foundation
Business Model Canvas


Winning Pitch 6
Building an Unfair Advantage - Key Activities
What are our key activities? How hard are they to copy?

What key activities
Do we do?
Do we need to offer our value proposition?
Do we need to reach our customers via our distribution channels?
Do we need to maintain the right customer relationships?
Do we need to generate revenue stream?

Categorisation of key activities...
Production
Problem solving
Platform / network

Possible triggers
Innovating
Designing
Making
Delivering
Quality
Quantity
Problem solving
Empathising
Knowledge management
Research
Development
Platforms
Networks
Supply channel
Sales channel
Front office
Back office

Building an Unfair Advantage - Key Resources
What Key Resources do our Value Propositions require?
How hard are they to copy?

What key resources
Do we have?
Do we need to offer our value proposition?
Do we need to reach our customers via our distribution channels?
Do we need to maintain the right customer relationships?
Do we need to generate revenue stream?

Categorisation of key resources...
Physical
Intellectual
Human
Financial

Possible triggers
Raw materials
Manufacturing facilities
Buildings
Vehicles
Machines
Logistics
IT
Warehouses
Point of sale
Distribution
Brands
Knowledge
Patents and copyright
Data
Capital structure
Track record
Sustainable; ethical
Platforms and networks
Methodologies
Cash
Collateral
Shareholder structure

High Growth Foundation
Business Model Canvas


Winning Pitch 7
Building an Unfair Advantage - Key Partnerships
Which Key Activities do partners perform better or cheaper than us?

Key Partnerships
Provide access to ingredients we need for our business model that we do not own or control
Include strategic alliances and joint ventures who are our key partners?
Buyers and suppliers may work together for mutual benefit
What key resources do our partners have?
What key activities do our partners perform?

Four different types of partnership
Strategic alliances between non-competitors
Strategic partnerships between competitors
Joint ventures to develop new business
Buyer-supplier relationships to assure reliable
supplies

Motivations for partnering
Optimisation and economies of scale
Reduction of risk and uncertainty
Access to particular resources and activities

Possible triggers
Learning together
Sustainability
Shared ethics
Common objectives
Trust
Diversity
Stimulation
Benchmarking


Turn customers value into cash - Cost structure
What are the most important costs inherent in our business model?

Costs
What are the most important costs in our business model?
Which key resources are most expensive?
Which key activities are most expensive?
Are structures COST DRIVEN or VALUE DRIVEN?
Which are FIXED and VARIABLE costs?
Are there economies of SCALE or SCOPE?

Possible triggers
Automation
Outsourcing
No frills
Luxury
Reassuringly expensive
Quality
Quantity
Sustainability
Ethics

High Growth Foundation
Business Model Canvas


Winning Pitch 8
Turn customers value into cash - Revenue streams
For what value are customers really willing to pay?
How would they prefer to pay?
How important is each revenue stream to our business?

TRANSACTION REVENUES from one-time customer payments
RECURRING REVENUES from ongoing payments or post-purchase customer support

Ways to generate revenue streams
Asset sale
Usage fee
Subscription fee
Renting/leasing
Licensing
Brokerage fees
Advertising

Pricing mechanisms
Fixed menu pricing
List price
Product feature dependent
Customer segment dependent
Volume dependent
Dynamic pricing
Negotiation (bargaining)
Yield management
Real time market
Auctions



High Growth Foundation
Business Model Canvas


Winning Pitch 9

The High Growth Foundation
One Central Park,
Northampton Road,
Manchester,
M40 5BP
0161 918 6785
www.winning-pitch.co.uk






This tool is adapted from Business Model Generation, Osterwalder
& Pigneur