Tuesday, June 9

Understanding your Business Model

Having a idea is the romantic period but to execute is a lot of effort and work.

For pitching your idea it is essential to know ur  business structure and plan. First entrepreneur must have clear idea of the busines model with all the 9 blocks.

Who is your customer segments ?

Mass Market has more chance to get investment but the segment is highly competetive.

Niche Market is a highly specific customer segment. eg like Defence Fighter Jets, Rolls Royce Car

Segmented Market is a customer base with different needs. eg like Ice cream packaged in cups and family packs.

Diversified Market is diversifying your infrastructure to two unrelated customer segements. eg like post office used for banking service or mobile telecom companies  selling customer data insights, push free partnershippped applications/service

What values can u provide to your customer?

  • Is the product/service a new or unique,
    • improved Performance, 
    • Design and Brand value,
    • less Cost, 
    • more Functional use 
    • and/or Accessible. 
Accessibility is making it more availalbe like Rolls Royce charging only for the number of hours the Jet engine is used instead of selling the engine.

What would be your revenue streams?

  • Sale of items,
  • Usage fee, 
  • Subscription fee, 
  • Leasing, 
  • Licensing,
  • Brokerage 
  • and/or Advertising.

What kind of Customer Relationships ?

  • One to One Assistance
  • Self Service
  • Automated Service
  • Community
  • Co-Creation
Co-Creation is like a Book selling ecom site Infibeam allowing customers to  write reviews which create value for book readers.

What are the Key Activities ?

  • Production
  • Problem solving
    • Customer Relaionship
    • Product Innovation
  • Platform /  Network

What are the Key Partnerships ?

  • Strategic Partnership with non-competitors
  • Stratetigic Alliance with competitors inorder to devlop a new technology eg. Android OS
  • Joint Venture to devlop new businesses
  • Buyer-Supplier relationship to assure reliable supplies

Characterisitcs of Cost Structure

Fixed Cost : Cost remains same regardless of volume of goods and services like Salaries and Rent.

Variable Cost : Cost remains proportional to voulume of goods and services.

Economies of scale : Cost per unit output decreases as the number of unit output increases

Economies of scope :  Reduce the cost by leveraging on unused infrastructure or operation. like Amazon opened up Cloud Computing Service developed for ecom platform.


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