Canvas: Business Model Components and Strategies
Canvas: Customer segments
Groups of persons or organizations, which a company targets. Differentiation by customer type: B2B/B2C/B2G. By actors: Direct business model: customers=users/Multiside BM: customers & users (facebook)/Marketplace BM: buyers & sellers.
Value proposition
Package of products which generates value for your customer segments. Divided into consumers and sellers or hosts and guests.
Channels
The way you reach your customer segments and propose your value proposition.
Channel types
Own & direct: sales force and web sales. Own & indirect & direct: own stores/partner. Always indirect: partner stores & wholesaler.
Channel phases
1. Awareness: How do we raise awareness about our company’s products and services? 2. Evaluation: How do we help customers evaluate our organization’s Value Proposition? 3. Purchase: How do we allow customers to purchase specific products and services? 4. Delivery: How do we deliver a Value Proposition to customers? 5. After sales: How do we provide post-purchase customer support?
Customer relationships types
Personal assistance: e.g. call center. Dedicated personal assistance: dedicated specially to an individual client. Automated services: e.g. movie recommendations on Netflix. Co-creation: The customer is directly involved in the value creation process. Customers help with the design of new products. Communities: Users can exchange information in communities and solve each other’s problems. Self-service: the company maintains no direct relationship with customer. It provides all the necessary tools for customers to solve their problems.
Revenue streams
Types: Asset sale: This Revenue Stream derives from selling ownership rights to a physical product. Licensing Fees: This Revenue Stream is generated by giving customers permission to use protected intellectual property in exchange for licensing fees. Brokerage Fees: This Revenue Stream derives from intermediation services performed on behalf of two or more parties. Subscription Fees: This Revenue Stream is generated by selling continuous access to a service. Advertising Fees: This Revenue Stream results from fees for advertising a particular product, service, or brand. E.g. apple: iphone, mac, ipad, services (apple music, apple pay), others/facebook: mainly ads.
Pricing mechanisms
Fixed pricing: Predefined prices are based on static variables. Dynamic Pricing: Prices change based on market conditions.
Key resources
Physical resources: Physical assets such as manufacturing facilities, buildings, vehicles, machines. Human resources. Intellectual resources: Intellectual resources such as brands, proprietary knowledge, patents and copyrights, partnerships, and customer databases. Financial resources: Some business models require financial resources and/or financial guarantees.
Key activities
The most important activities a company has to undertake for a functioning business model.
Key partners
The network of suppliers and partners, which help fulfilling the business model.
Cost structure
All costs which occur in the delivery of the business model. Fixed costs, variable costs, economies of scale, economies of scope.
The digitization of value covers all sectors of the economy: shopping mall-online shopping, navigation by map-online navi. Critical mass is a key factor of the network economy. Whatsapp or threema. The battle for attention is the competitive arena: example networks. There is so much information that you have to choose with what you spend your time. New complex value networks require competition and cooperation: example chargers for phone: they all use the same type to fulfill a customer need. Markets can be individualized by simultaneity of cost reduction and differentiation strategy by customizing your own adidas or nike shoes. Electronic commerce is (becoming) commonplace. Normalization in market capitalization leads to the selection of Internet companies (e.g., Amazon).
Formal Institutions
Written rules that form the basis for enforcement. All violations are enforced by authority according to the written (planned) sanctions. Authority is not limited to the government.
Informal Institutions
Usually not written or at most partially. Enforcement is not specified in advance. Spontaneous feedback of the society “punishes” the violators.
Game theory
Understand how agents/users behave in scenarios where they have to make decisions/moves. Game Theory is a tool to model the outcome of strategies where 2 or more players are involved.
Complete information
Players’ preferences on outcomes are common knowledge AND players’ action spaces are common knowledgeàrock, paper scissors.
Incomplete information
At least one player has limited information about the preferences of another player àpoker.
Forms of interaction: normal form game
Players choose their action simultaneously. Extensive form game: players choose their action sequentially. Perfect information: All previous moves are observed before the next move is chosen; No moves are simultaneous. Imperfect information: at least one player cannot observe the moves of the other players.
The Prisoner‘s Dilemma
Each prisoner has a choice between only two options, but cannot make a good decision without knowing what the other one will do.
Prisoners dilemma real world
E.g. advertisements: two competing firms are deciding to spend or not to spend in ads; if one spends, they will get a larger market share but it will cost money; if both spend, both will have the same market share as before but having spent money; if both do not advertise, the market share stays the same but without costs for any. Dominant strategy equilibria are Nash equilibria but not vice versa. In a Nash equilibrium we choose the best strategy, while taking the decisions of others into account. Some games do not have Nash equilibria in pure strategies (left). Some games do have more than one Nash Equilibrium (right). Weak strict extensive form games: A Nash equilibrium in a dynamic game is subgame-perfect if the strategies of the Nash equilibrium constitute a Nash equilibrium in every subgame of the game.
Independent private values (IPV)
One Bounty is not worth the same for everyone. Common values: Item being sold has a single objective value. No one knows this true value for sure, but everyone has some guess. Learning someone else’s valuation provides useful information about the likely value of the item.
Traditional auction mechanisms: one sided: one seller multiple buyers
English auction: The price is successively raised until only one bidder remains. So until nobody is willing to pay more, p>ipv you pay de value of the second higher bid. Candle auction: variant of the English auction: The price is successively raised until the time runs out. The one with the highest bid when the time runs out, gets the object. The auction stops when the time runs out ebay. Traditional Vickery auction: each one bets what he wants but without seeing the bet of the others (sealed bits). The one who bets the most gets the object but paying the second higher bet. Ebay variant: automatic bidding system. Dutch auction: A Dutch auction refers to a type of auction in which the price of an item is lowered until it gets a bid. Double sided actions: multiple sellers and multiple buyers. Continuous double auctions ejc. Combinatorial auctions: Combinatorial auctions are simultaneous multiple item auctions that allow submission of all or nothing bids for combinations of the items being sold. Example two parking spots in the same auction. Assuming bids on bundles (pareja) are not allowed. La valoración de los bienes depende de la asignación simultánea de otros bienes. Complementary goods: Superadditive valuation function