The Business Model Canvas (BMC) is a concept developed by Alex Osterw?lder, a renowned author and business consultant on business model innovation. It is a concept proposed by Alex Osterwalder, a renowned author and business consultant on business model innovation, in 2008. It is a tool for standardizing elements to be used to describe and visualize the elements of a business model, emphasizing the interactions between the elements.
It consists of the nine modules in the diagram below. Analyzing these modules can help a business or entrepreneur generate flexible ideas and plans to ensure they are targeting the right users and meeting their needs appropriately.
Why visualize with Business Canvas?
The Business Model Canvas approach to business model design is a right-brain approach to visual design. A business model is indeed a system where one element can influence the others and only makes sense when viewed as a whole. It is difficult to capture the whole picture of a business model without visualizing it.
In fact, by visualizing the business model, we can turn its implicit assumptions into explicit information. This makes the business model explicit and tangible, and much clearer to discuss and change. Visualization technology gives business models "life" and facilitates co-creation.
Step 1
First we need to identify the target users
1 - Customer Segments
- the different people or organizations that the business wants to reach and serve
The focus here is on:
- Who are the target users? p>
- Who are your target users and customers?
- Whose problems are being solved?
- Who do you create value for?
When do you need to segment customers? Here are some of the conditions for segmenting a customer group:
- Their demand creates a new supply (a new demand requires a suitable solution);
- A new distribution channel needs to be established (e.g., rural users for Haier's rural policy);
- A new type of relationship needs to be established (e.g., self-service for ticketing and self-service for ticket booths). self-service at ticket counters, online ticketing, and manual ticketing at windows, etc.);
- they generate significantly different profit margins (e.g., free and paid users in online games, which reminds me of the saying that a free user is an experiential service provided to a paid user);
- they are willing to pay for specific improvements (e.g., a hot pot is a good way to make a style and lifestyle statement);
- they are willing to buy for special improvements (e.g., a hot pot is a good way to make a style and lifestyle statement). (e.g. for people who can eat a hot pot and have a lifestyle, such as those targeted by Haidilao's services, etc.).
And what are the types of customer segments? Look at the following:
- mass market (this is a largely indistinguishable group of customers, where the organization blurs the needs and problems of a large group of people, i.e., providing the same product and communicating the same information in the same way to all consumers in the market, i.e., mass production, mass distribution, and mass promotion, e.g., the almost invariable Coca-Cola, even though some people have different preferences, sweetness, or other characteristics. (a specific, specialized market, e.g., many auto parts makers rely on purchases from mainstream auto makers, e.g., pet lovers who want to keep lizards)
- segmented (having the same problem but with slightly different needs, e.g., a bank that separates different consumers into different groups, e.g., a company that has the same problem, but with slightly different needs, e.g., a company that has the same problem, but with slightly different needs, e.g., a bank that separates different consumers into groups with different needs) (Having the same problem, but with slightly different needs, e.g., a bank dividing customers with different credit amounts, e.g., enterprise or personal, etc.)
- Diversified customer segment diversified (A solution that faces a group with very different needs and problems, but does so in the same way. For example, a customer using a web-based cloud drive may be a ****-enabled customer, or they may be a storage customer)
- multi-sided platforms/multi-sided markets (Some organizations serve two or more groups, mostly web-based platforms that take this approach, such as Uber's rider and driver groups, or Taobao's merchant and driver groups)
- diversified customer base (A solution that addresses different needs and problems, but in the same way. (There are organizations that serve two or more groups, mostly online platforms such as Uber for riders and drivers, or Taobao for merchants and buyers)
-- For Uber, the segmented customers are:
Regular users:
- don't have a car;
- don't want to drive their car to do something unimportant or inconvenient with the car;
- want to feel like a VIP;
- want to feel like a VIP; and Want to feel like a VIP and be able to travel in style;
- Want to have a cost-effective cab service at all times.
Driver demographics:
- Have a car and want to earn money;
- Love to drive;
- Want to be known as a cooperative participant, not a driver employee.
Step 2
Immediately after we talk about value propositions to identify needs and problems
2- Value Propositions
- a set of products, services that meet the needs of a segment of customers, solving their problems to create value
Here we talk about value propositions.
The focus here is:
- What kind of value should we deliver to our customers?
- What kind of problems are we helping our customers solve?
- What customer needs are we meeting?
- What combination of products and services can we offer to our customer base?
- Can we understand our customers well enough to provide differentiated or targeted value?
And value can be generated in the following ways:
- newness (some value propositions offer new experiences and services, e.g., Disney's door-to-door baggage delivery service for home users)
- performance (improving the performance of a product or service creates value, e.g., in electronics, such as cell phones and computers). (improving the performance of products and services also creates value, e.g., electronic products such as mobile phones and computers, constantly improving their performance to attract users to re-consume them, Nanfu's polymer ring)
- customization customization (customization to meet the specific needs of customers, e.g., Taobao's customization of advertisements for buyers with different behaviors and lifestyles, customization of weddings, etc.)
- getting the job done (getting the job done, creating a quality experience, e.g. Haidilao, car 4S stores)
- design design (design is hard to measure, but in general design makes a difference, so it generates value, e.g. Porsche)
- brand/status brand/status (expressing status through the use or display of a particular brand, e.g. supreme) supreme can give the buyer a symbol of hipness)
- price (providing the same service at a lower price can also create value, e.g. Xiaomi phones, budget airlines)
- cost reduction (help users cut costs, e.g. Guazi, no middleman to make a profit)
- risk reduction (help to curb risk, e.g. Porsche)
- risk control (help to curb risk, e.g. Porsche, Porsche) risk reduction (helping to curb risk, e.g., stable income funds, insurance)
- accessibility accessibility (extending products and services to more customers, e.g., rural courier services)
- convenience/usability convenience/usability (making things more convenient or easy to use can create a significant amount of revenue)
- cost reduction (helping users cut costs, e.g., melon used car, no middlemen to make a difference)
- cost reduction Convenience/usability (making things more convenient or easy to use creates significant value, e.g. the portability of a laptop, or the cost-effective office utility difference of a desktop computer)
- For Uber, the value proposition it creates is:
Users:
- Minimal wait time;
- Lower prices compared to cabs;
- Predictable arrival times;
- Cashless transactions (there are differences in the means of payment at home and abroad);
- The ability to see the track of the trip on a map.
Drivers:
- Employment opportunities with another source of income;
- Flexible working hours and the ability to work part-time;
- Simple payment process;
- Getting paid right online;
Step 3
Then again, we have to think about how to reach out to them in order to connect customers to our
3-Channels
- the distribution channels, paths or platforms through which we interface with our users or they reach us, etc.
The focus here is on:
- What are the channels through which we connect with our customers?
- How?
- How is the channel structured?
- Which channels work best?
- Which channels are more cost effective?
- How do we integrate these channels into our customers' daily lives and work?
Traditional channel types are:
- Owned channels - offline, online, own stores or platforms
- Partner channels - partner stores, wholesalers
There is a process to build a channel. There is a process:
- Visibility - how to expand product and service awareness to communicate our presence to target users
- Evaluation - how to help customers evaluate our value proposition
- Consumption - how customers buy into a particular product or service
- How customers buy into a particular product or service
- Delivery - how we communicate our value to our customers
- After-sales - how we How we provide post-sales support and assistance to our customers
Corresponding to the above processes, the channel has the following roles to play:
- Raising awareness and making customers more aware of a company's products and services, and converting traffic into spending, e.g., Taobao's advertisements
- Helping customers to evaluate a company's value proposition and adopt our products or services, e.g., Apple's offline experience stores
- Provide additional points of consumption to enable customers to purchase a product or service and engage in a consumer behavior
- Deliver value propositions to customers, solve problems, and fulfill needs,
- Provide customers with after-sales support if problems arise
-- For Uber, the channel pathways are:
Website;
Mobile apps (android and ios).
Step 4
So what kind of relationship are we building with our customers through our channel pathways?
4-Customer RelationshipsCustomer Relationships
- The type of relationship that is maintained with each customer group
is a connection that is initiated by the business in order to achieve its goals. This contact may be a purely transactional relationship, a communication link, a special contact opportunity for the customer, or the formation of some kind of sales contract or alliance for the benefit of both parties.
The focal questions here are:
- What type of relationship does each customer group expect to establish and maintain with us?
- What types of relationships are already in place?
- What are the costs of these relationship types?
- How do these types of customer relationships integrate with other modules in our business model?
Common types of customer relationships are:
- Personal assistance (this relationship type is based on human interaction, e.g., customer service, lead generation)
- Dedicated personalassistance (this relationship type includes a dedicated account representative for a single This type of relationship includes a dedicated customer representative for a single customer, and is the deepest and most intimate type of relationship, usually taking a longer time to establish, e.g., personal physician, real estate sales)
- Self-service self-service (there is no direct relationship, but rather, the customer is provided with all the conditions needed for self-service, e.g., ATM, self-service ticket machine)
- Automated services automated services (as opposed to self-service) services automated services (integrating more elaborate automated processes than self-service, e.g., customized placement of ads, QQ friend recommendations)
- communities communities (leveraging user communities to build deeper connections with customers/prospects and to facilitate interactions among community members, e.g., posting, douban)
- co-creation (many companies go beyond the traditional customer-supplier relationship with their customers and tend to co-create value with their customers, e.g. Zhihu, Dianping)
- In addition to this, in marketing, customer relationships can be categorized as buyer-seller, supplier, partner, strategic alliance, etc.
- Generally speaking, a company's relationship with its customers can be divided into two categories: buyer-seller, supplier, partner, and strategic alliance. Generally there are many types of relationships that a business builds with its customers as it is to reach out more to the segmented customers and there is a lightness in the connectivity of the customer relationship for each business.
So what are the customer relationship driving motivations and why are these customer relationships being built?
- Developing new customers
- Retaining existing customers
- Increasing sales and spending rates
- In the case of Uber, the customer relationships are:
Partner: A partner-like format with drivers.
Self-service: self-service registration and use by users and drivers through the app and website
*** Co-creation: a feedback and evaluation system for users and drivers (used to optimize their own platforms to provide a better service)
Community: social media (which is actually more akin to the *** Co-creation relationship in this regard, but more of another feedback and evaluation system)
Step 5
- In the case of Uber, the customer relationships are:
Partner: a partnership-like form with the driver. p>
Step 5
Once we've identified the customer segments, we need to think about how we need to make a profit from them
5-Revenue Streams
- This is used to depict the revenue streams that the company derives from each of the customer segments
The focus here is on. > The key questions here are:
- Do you understand what the value proposition is that customers are actually willing to pay for?
- What value propositions are customers currently paying for?
- What payment methods do customers currently use?
- What is the preferred payment method?
- What percentage of overall revenue does each revenue source contribute to?
General revenue streams can be categorized as:
- asset sale (the most common form of revenue, e.g. real estate or general merchandise)
- usage fee (a fee for a specific service, e.g. telecom operator)
- subscription fee (a fee that is generated through repeated use of a (charging through repeated use of income, QQ red, orange, yellow, green, blue, purple diamonds, video site membership)
- leasing/renting (charging through the temporary ownership of an asset or commodity for a fixed period of time, e.g., *** enjoying the bicycle ofo Mobay, etc. is more like leasing, not strictly *** enjoying)
- licensing fees (the licensing of protected intellectual property or images, e.g. patent fees, IP royalties, Android licenses, spokespersons)
- brokerage fees brokerage fees (fees for intermediary services that integrate the interests of multiple parties, e.g. real estate brokerage fees)
- advertising (fees for a wide range of advertising services, e.g. the YouTube channel that runs from time to time)
- advertisements YouTube ads and search engine promotion fees)
Let's talk about pricing mechanisms:
Fixed prices -
Labeled or catalog prices (menu or supermarket prices)
- Product characteristic-based (tangible and intangible products or services, tangible and intangible based on appearance, quality, and quality)
- Prices based on product characteristics. Tangible based on form, quality, function, brand, etc., intangible similar to the common types of services)
- Based on customer groups (Tony Lao's membership card, ordinary customers are full price, 20% off the member price)
- Based on the number of (selling bamboo rats Le, three yuan a piece, ten dollars for three)
Floating prices -
- Based on the price of a product or service. -
- Negotiated
Revenue management
- Real-time market prices (similar to stocks)
Auction bidding
- In the case of Uber, the sources of revenue are:
Rent or a commission. commission;
Premiums (e.g. peak hour premiums);
Prices by model, e.g. Uber X, Uber SUV, Uber Taxi, Uber Black, etc., with different models for different groups of people
Fees for other commuter services, e.g. ferries, helicopters, etc., for special commuter services (in a few foreign countries)
Sixth, the price of the commuter service is the same as the price of the helicopter.
Step 6
Again, we need to talk about discussing the infrastructure, what do we need to rely on in order to achieve profitability?
6 - Key Resources
- The most important factors such as capital, talent, brand, etc. that are used to make the business model work
The focus here is on:
- What resources are needed for the value proposition?
- What resources are needed for the distribution channel?
- What resources are needed for customer relationships?
- What resources are needed for revenue streams?
So how can resources be categorized? Look at the following:
- physical (tangible resources like plant and equipment, e.g. traditional product manufacturers)
- intangible intellectual (brands, property rights, images, e.g. Disney's pile of IP resources)
- human (literally, e.g. Huawei's pile of people who are passionate about R&D and a bunch of sales people)
- human (literally, e.g. Huawei's pile of people who are passionate about R&D and a bunch of sales people) human (literally, e.g. Huawei with a bunch of dedicated R&D talent and a bunch of salespeople, Tencent with its vast social user base)
- financial (literally, e.g. Jingdong's cash flow, Wang Jianlin's medium)
In the case of Uber, the core resources are:
technical platform;
experienced drivers
Step 7
We have the resources, it's time to do the real thing
7 - Key Activities
- the most important things a business must do to ensure its business model is viable
Any business model requires multiple key business activities. These are the most important actions that a business must perform in order to operate successfully. They are the basis for creating and delivering value propositions, reaching markets, maintaining customer relationships and generating revenue. For example, a telecom operator installs and maintains base stations, and Supreme designs and maintains the brand image.
The questions at the center of this are:
- What are the key operations required to deliver the value proposition?
- What are the key operations required to build the distribution channel?
- What are the key business imperatives for maintaining customer relationships?
- What are the key business imperatives for capturing revenue streams?
Business activities, to name a few:
- production production (the core of traditional manufacturing is to produce and manufacture goods)
- problem solving proplem solving (providing solutions for individual users, design firms providing industrial, branding, service design services, etc.)
- platform/network (providing solutions for individual users, design firms providing industrial, branding, service design services, etc.)
- platform/network (providing solutions for individual users, design firms providing industrial, branding, service design services, etc.) platform/network (platform as the core resources of the business model, its key business are related to the platform or network, such as microblogging to maintain their own servers)
Detailed business types, each industry are nearly different, the content is richer, not to repeat, interested in their own search of the industry classification and business categories
--In the case of Uber, the key businesses are:
Product and service development and management;
Market development and user acquisition;
Spending on hiring and managing drivers;
User support systems
Step 8
In order to accomplish this, we need to find an outside source. To do this, we need to look for external help
8 - Key Partnerships
- the network of suppliers and partners needed to make the business model work
The focus questions are:
- Who are the key partners?
- Who are the key suppliers?
- What are the core resources we receive from our partners?
- What are the key businesses our partners are involved in?
Why do we partner?
- Business model optimization and economies of scale (Coke has sold for many years without price increases, more due to its scale of production, and there are also strategies for profitability for beverage companies, which I won't explain here)
- Reduction of risk and uncertainty
- Access to special resources and activities (e.g., Tencent's strategic cooperation with Jingdong)
Our partners can also be our customers, so the customer relationship in marketing applies to partnerships as well:
- Strategic alliances between non-competitors
- Strategic alliances between competitors (many cell phone brands license patents from each other)
- Joint ventures for new businesses (e.g. Uber and Drip)
- Suppliers and suppliers for reliable supply (e.g. Tencent and Jingdong)
- Access to special resources and business activities (e.g. Tencent and Jingdong) reliable supply
- Vendors and buyers in the case of Uber:
Drivers with cars;
Payment processing systems;
Mapping app providers;
Investors;
Step 9
Putting it all together, we need to determine the costs
9 - Cost Structure
- all the costs triggered by operating a business model
The focal questions here are:
- What are the most important inherent current business model
- What are the most important costs inherent in the current business model?
- What are the most expensive core resources?
- What is the most expensive key business?
Typical cost structure hierarchies:
- Cost-driven (pricing centered on the cost of the product or service)
- Value-driven (pricing based on the customer's perception and understanding of the value of the product or service)
Cost structure characteristics:
- Variable costs
- economies of scale (This refers to the expansion of scale to reduce the average cost in order to pursue the best economic efficiency, but too large a scale will become diseconomies of scale, such as the current phenomenon of the price of steel cabbage).
- economies of scope (refers to expanding the scope to reduce the average cost, and can also refer to the economic model of production together is cheaper than separate production, such as telecommunication companies, and then Apple to do the iPhone series of cell phones, different models to do a few, than to do an iPhone and then do the cost of a Macbook is cheaper, because many of the components, resources, research and development, and design. (components, resources, R&D and design can be used along the same series)
In the case of Uber, the cost structure is:
Technology infrastructure;
Salaries of hires;
Market development and platform rollout spend.
Well, a business model canvas diagram is filled in.
The characteristics of the business model canvas:
- Completeness: Although only one page in size, it can basically determine the business model of a product in every aspect, so that the general public in this model can be a glance at the product business model is complete or there are big mistakes.
- Consistency: You can determine whether all aspects of the business model are consistent. For example, are the partner assumptions consistent with the channel assumptions?
- Readability: It's clear what you're doing, why you're doing it, what you need, and what you're bringing to the table.
The nine modules can also be categorized as follows:
- Customer Interface: Customer Segmentation, Channel Pathways, Customer Relationships
- Value Proposition: Value Proposition
- Operating Model: Key Businesses, Core Resources
- Infrastructure: Core Resources, Key Businesses, Partners
- ? Financial structure: cost structure, revenue sources
Business model canvas, not just a charting tool, when you fill out the various modules, this does not mean the end, but only the beginning, the later evaluation, adjustment is the most important thing.