Module - Business Model Generation

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1

2. INTRODUCTION TO
BUSINESS MODEL
DESIGN
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

3. 3
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Do we really understand why some
organisations are more successful than others?
How did Apple become such a high valued company?
Why is Microsoft still the market leader in operating systems if Apple
products and their software are better?
How is it possible that some start-ups can disrupt entire industries while
the market leaders cannot do anything against it?
Just some of the question we should know an answer for …

4. 4
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In this course you will gain knowledge about
social entrepreneurship and social entrepreneurs
By the end of this session you should be
able:
• to define what a business model is and
define its importance in today’s business
environment
• to name each building block of the Business
Model Canvas and describe different
characterisations each building block can
have
• to analyse existing and develop new
business models using the Business Model
Canvas, if sufficient information on the
context of the business is available
This is a very hands on course!
Each lecture we will take one of
the 9 building blocks of the most
used business model framework
and use 2 cases to explore the
building block in detail. Applying
your learnings from the previous
weeks, you will analyse 2
additional cases at the end of the
course from A to Z.

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Table of Contents
• DEFINITION of the
business model term1
• Business model
FRAMEWORKS2
• The BUSINESS MODEL
CANVAS3

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A business model is defined
as the rationale
of how an organization
creates and delivers value
to its customers
and captures value in return
Defining the term business model

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Overview of business model frameworks (1/2)
Source Components #
Horowitz (1996) Price, product, distribution, organizational characteristics, and technology 5
Viscio and Pasternak (1996) Global core, governance, business units, services, and linkages 5
Timmers (1998) Product/service/information flow architecture, business actors and roles, actor
benefits, revenue sources, and marketing strategy
5
Markides (1999) Product innovation, customer relationship, infrastructure management, and financial
aspects
4
Donath (1999) Customer understanding, marketing tactics, corporate governance, and
intranet/extranet capabilities
5
Chesbrough and Rosenbaum
(2000)
Value proposition, target markets, internal value chain structure, cost structure and
profit model, value network, and competitive strategy
6
Gordijn et al. (2001) Actors, market segments, value offering, value activity, stakeholder network, value
interfaces, value ports, and value exchanges
8
Linder and Cantrell (2001) Pricing model, revenue model, channel model, commerce process model, Internet-
enabled commerce relationship, organizational form, and value proposition
8
Petrovic et al. (2001) Value model, resource model, production model, customer relations model, revenue
model, capital model, and market model
7

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Overview of business model frameworks (2/2)
Source Components #
Horowitz (1996) Price, product, distribution, organizational characteristics, and technology 5
Viscio and Pasternak (1996) Global core, governance, business units, services, and linkages 5
Timmers (1998) Product/service/information flow architecture, business actors and roles, actor
benefits, revenue sources, and marketing strategy
5
Markides (1999) Product innovation, customer relationship, infrastructure management, and financial
aspects
4
Donath (1999) Customer understanding, marketing tactics, corporate governance, and
intranet/extranet capabilities
5
Chesbrough and Rosenbaum
(2000)
Value proposition, target markets, internal value chain structure, cost structure and
profit model, value network, and competitive strategy
6
Gordijn et al. (2001) Actors, market segments, value offering, value activity, stakeholder network, value
interfaces, value ports, and value exchanges
8
Linder and Cantrell (2001) Pricing model, revenue model, channel model, commerce process model, Internet-
enabled commerce relationship, organizational form, and value proposition
8
Petrovic et al. (2001) Value model, resource model, production model, customer relations model, revenue
model, capital model, and market model
7

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Discussion question: Which elements of the
frameworks do you think are key?

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The Business Model Canvas (BMC)
The BMC contains
9 building blocks

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The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what),
the customers (who)
and the finances
(how much)

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The Business Model Canvas (BMC):An example

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Discussion question: Which components of other
business model frameworks are missing in the BMC?

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The next weeks
Each week we will explore
the 9 building blocks of the
business model canvas one
after another.
We will do so, by discussing
two companies and what. Your job is it to conduct EXTENSIVE research
on both companies so that we can start
analysing them in the next session

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15
THANK YOU
FOR YOUR ATTENTION

16. BMC01 – CUSTOMER
SEGMENTS
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

17. 17
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A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

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The Business Model Canvas (BMC)
This is what we
talk about today

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Customer segments
Key Questions:
• For whom are we creating value?
• Who are our most important customers?
Potential characteristics
• Mass Market
• Niche Market
• Segmented
• Diversified
• Multi-sided Platform

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Task: find at least three examples for each of the
potential characteristics outlined on the previous slide

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Lets take a closer look!
Describe in detail the customer segments
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

22. 22
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Question: Which problems did you have when
characterising the customer segments?

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Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

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24
THANK YOU
FOR YOUR ATTENTION

25. BMC02 – VALUE
PROPOSITION
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

26. 26
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logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

27. 27
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

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Value proposition
Key questions:
• 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?
Potential characteristics
• Newness
• Performance
• Customization
• “Getting the Job Done”
• Design
• Brand/Status
• Price
• Cost Reduction
• Risk Reduction
• Accessibility
• Convenience
/Usability

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Task: find at least one example for each of the
potential characteristics outlined on the previous slide

30. 30
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Lets take a closer look!
Describe in detail the value proposition
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

31. 31
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logo here]
Question: Which problems did you have when
characterising the value propositions?

32. 32
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Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

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33
THANK YOU
FOR YOUR ATTENTION

34. BMC03 – CHANNELS
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

35. 35
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

36. 36
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

37. 37
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logo here]
Channels
Key questions:
• 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 are most cost-efficient?
• How are we integrating them with customer routines?

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Channels
Channel phases:
• Awareness - How do we raise awareness about our company’s
products and services?
• Evaluation - How do we help customers evaluate our organization’s
Value Proposition?
• Purchase - How do we allow customers to purchase specific
products and services?
• Delivery - How do we deliver a Value Proposition to customers?
• After sales - How do we provide post-purchase customer support?

39. 39
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logo here]
Lets take a closer look!
Describe in detail the channels used by
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

40. 40
[Insert your
logo here]
Question: Which problems did you have when
characterising the value propositions?

41. 41
[Insert your
logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

42. [Insert your
logo here]
42
THANK YOU
FOR YOUR ATTENTION

43. BMC04 – CUSTOMER
RELATIONSHIPS
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

44. 44
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

45. 45
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

46. 46
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logo here]
Customer relationships
Key questions
• What type of relationship does each of our Customer
• Segments expect us to establish and maintain with them?
• Which ones have we established?
• How are they integrated with the rest of our business model?
• How costly are they?
Examples
• Personal assistance
• Dedicated Personal Assistance
• Self-Service
• Automated Services
• Communities
• Co-creation

47. 47
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Task: find at least two examples for each of the
potential characteristics outlined on the previous
slide

48. 48
[Insert your
logo here]
Lets take a closer look!
Describe in detail the customer relationships
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

49. 49
[Insert your
logo here]
Question: Which problems did you have when
characterising the customer relationships?

50. 50
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logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

51. [Insert your
logo here]
51
THANK YOU
FOR YOUR ATTENTION

52. BMC05 – REVENUE
STREAMS
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

53. 53
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

54. 54
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

55. 55
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logo here]
Customer relationships
Key questions
• For what value are our customers really willing to pay?
• For what do they currently pay?
• How are they currently paying?
• How would they prefer to pay?
• How much does each Revenue Stream contribute to overall
revenues?
Types:
• Asset sale
• Usage fee
• Subscription Fees
• Lending/Renting/Leasing
• Licensing
• Brokerage fees
• Advertising

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Customer relationships
Fixed pricing
• List Price
• Product feature dependent
• Customer segment dependent
• Volume dependent
Dynamic pricing
• Negotiation( bargaining)
• Yield Management
• Real-time-Market

57. 57
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logo here]
Lets take a closer look!
Describe in detail the revenue streams
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

58. 58
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logo here]
Question: Which problems did you have when
characterising the revenue streams?

59. 59
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Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

60. [Insert your
logo here]
60
THANK YOU
FOR YOUR ATTENTION

61. BMC06 – KEY
RESOURCES
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

62. 62
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

63. 63
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

64. 64
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logo here]
Key resources
Key questions
• What Key Resources do our Value Propositions require?
• Our Distribution Channels? Customer Relationships?
• Revenue Streams?
Types of resources
• Physical
• Intellectual (brand patents, copyrights, data)
• Human
• Financial

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Task: find at least two examples for companies
which are primary depending on each of the
resource types

66. 66
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logo here]
Lets take a closer look!
Describe in detail the key resources
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

67. 67
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logo here]
Question: Which problems did you have when
characterising the key resources?

68. 68
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logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

69. [Insert your
logo here]
69
THANK YOU
FOR YOUR ATTENTION

70. BMC07 – KEY
ACTIVITIES
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

71. 71
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

72. 72
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

73. 73
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logo here]
Customer relationships
Key questions
• What Key Activities do our Value Propositions require?
• Our Distribution Channels?
• Customer Relationships?
• Revenue streams?
Categories
• Production
• Problem Solving
• Platform/Network

74. 74
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Task: find at least three examples for each of the
categories outlined on the previous slide

75. 75
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logo here]
Lets take a closer look!
Describe in detail the key activities
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

76. 76
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logo here]
Question: Which problems did you have when
characterising the key activitites?

77. 77
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logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

78. [Insert your
logo here]
78
THANK YOU
FOR YOUR ATTENTION

79. BMC08 – KEY
PARTNERSHIPS
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

80. 80
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

81. 81
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

82. 82
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logo here]
Customer relationships
Key questions
• Who are our Key Partners?
• Who are our key suppliers?
• Which Key Resources are we acquiring from partners?
• Which Key Activities do partners perform?
Motivations for partnerships:
• Optimization and economy
• Reduction of risk and uncertainty
• Acquisition of particular resources and activities

83. 83
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Task: find at least three examples of companies
representing each partnering motivation

84. 84
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logo here]
Lets take a closer look!
Describe in detail the key partnerships
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

85. 85
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logo here]
Question: Which problems did you have when
characterising the key partners?

86. 86
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logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

87. [Insert your
logo here]
87
THANK YOU
FOR YOUR ATTENTION

88. BMC09 – COST
STRUCTURE
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

89. 89
[Insert your
logo here]
A short reminder:
The Business Model Canvas (BMC)
The canvas tries to
describe the
infrastructure (how),
the offering (what), the
customers (who) and
the finances (how
much)

90. 90
[Insert your
logo here]
The Business Model Canvas (BMC)
This is what we
talk about today

91. 91
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Customer relationships
Key questions
• What are the most important costs inherent in our business model?
• Which Key Resources are most expensive?
• Which Key Activities are most expensive?
Is your business more:
• Cost Driven (leanest cost structure, low price value proposition,
maximum automation, extensive outsourcing)
• Value Driven (focused on value creation, premium value proposition)
Sample characteristics:
• Fixed Costs (salaries, rents, utilities)
• Variable costs
• Economies of scale
• Economies of scope

92. 92
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Task: find at least three examples for cost and
value-driven companies, and one where it
changed

93. 93
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Lets take a closer look!
Describe in detail the cost structure
of the following companies:
Create groups, get up your chairs and using Post-it notes,
flipcharts/flip chart paper put on the wall, whiteboards or whatever
available to work in a more dynamic setting.

94. 94
[Insert your
logo here]
Question: Which problems did you have when
characterising the key partners?

95. 95
[Insert your
logo here]
Reminder
Do not forget to
make a picture of your work
(you will need it in the next sessions)

96. [Insert your
logo here]
96
THANK YOU
FOR YOUR ATTENTION

97. BUSINESS MODEL
CASES
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

98. 98
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The bigger picture
Having separately analyse
each component of Google’s
and Walt Disney’s business
model, it is time to look at
the bigger picture.

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The bigger picture
It is now your task to
analyse the business model
as a whole and develop new
business model which
Google resp. Walt Disney
could implement in the
future.

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The bigger picture
To do so, split in groups and
hang the business model
canvas on the wall
(including all your results
from the previous sessions)
and develop different
scenarios for future
business models.

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1
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The bigger picture
Evaluate each scenario and
present your results later in
front of the other groups
(there you also have to
detail which criteria you
used to evaluate the.

102. [Insert your
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10
2
THANK YOU
FOR YOUR ATTENTION

103. BUSINESS MODEL
CASE II – OWN IDEA
Module: Value Proposition and Business
Model Design
Lecturer: [Insert name]
Date: [Insert date]
PRESENTATION SUPPORTED BY
[Insert your
logo here]

104. 10
4
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From existing to new ideas
In the past weeks you have
learned how to analyse
existing business models.
Now it is time to develop
one from the scratch.

105. 10
5
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Your task
Build groups and select one idea which has not yet been
implemented. This can either be an idea you have yourself
or you might take one from the internet (e.g. you can look for
innovative ideas at crowdfunding platform).

106. 10
6
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Your task
Put the business model
canvas on the wall and get
started.
Be prepared to present your
results to the other groups.
ENJOY!

107. [Insert your
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10
7
THANK YOU
FOR YOUR ATTENTION