9 business model building blocks

1. Business Model Generation
Part1: Building Blocks

2. I Got an Awesome Idea

4. Reality

5. Business Model
The corner of success and failure
“A business model describes the rationale of how
an organization creates, delivers and captures
value.”

6. The 9 Building blocks

7. I- Customer segments:
- Customer groups represent separate segments if (
they are interested by different offers, they are
willing to pay for different aspect of the offer, they
are reached thru different distribution channels,
they need different types of relationships, they
have substantial differences in profitability)
- Types: mass market, niche market, segmented
(credit lines...), diversified (amazon), multi-sided
markets.

8. II- Value proposition
- What value do we deliver to the customer?
- Which customer problem are we helping to solve?
- Which customer needs are we satisfying?
- Which bundles, products for each customer
segment?
- It can be qualitative or quantitative.
- Values Types: Newness, performance,
customization, getting the job done, design, brand
status, price, cost reduction, risk reduction,
accessibility, convenience-usability

9. III- Channels
- Through which channels do our customer segments
want to be reached?
- How are we reaching them now?
- How are our channels integrated?
- Which ones work best?
- Which ones is most cost –efficient?
- How are we integrating them with customer
routines?
Channel phases: awareness, evaluation, purchase,
delivery and after sales.

10. IV- Customer relationship
- What type of relationship does each of our
customer segments expects us to establish?
- Which ones have we established?
- How costly are they?
- How are they integrated with the rest of our
business model
Types: personal assistance, dedicated personal
assistance, self-service, automated services,
communities and co-creation

11. V- Revenue stream
- For what value are our customers really willing to
pay?
- For what do they actually pay?
- How are they currently paying?
- How much does each revenue stream contribute to
overall revenues?
- Ways to generate revenue streams: asset sale,
usage fee, subscription fees, lending-renting-
leasing, licensing, brokerage fees, advertising.
Price mechanism: fixed, dynamic.

12. VI- Key resources
- What key resources do our value propositions
require? Our distribution channels? Customer
relationships? Revenue streams?
Categories: physical/intellectual/human/ financial.

13. VII- Key activities
- What key activities do our value propositions
require? Our distribution channels? Customer
relationships? Revenue streams?
Production, problem solving platform network

14. VIII- Key partnerships
Who are our key partners? Who are our key
suppliers, key resources we acquiring, which key
activities does our partners perform.
Motivations: optimization and economy of scale.
Reduction of risk and uncertainty, acquisition of
particular resources and activities.

15. IX- Cost structure.
What are the most important costs inherent in our
business model? Which key resources are most
expensive/ which key activities are most expensive?
Types: Cost driven, value driven
Characteristics: fixed costs, variable costs, economies
of scale, economies of scope.