Development of the Business Model Canvas (BMC) typically begins with the value p
ID: 1145363 • Letter: D
Question
Development of the Business Model Canvas (BMC) typically begins with the value proposition expressed in terms of the offerings made to meet market/customer needs. This is what distinguishes an enterprise from its competitors.
An enterprise must put an infrastructure (plan) in place in order to deliver value to the market/customers. The infrastructure includes:
key activities performed to create a competitive value proposition;key resources that are necessary to create customer value; andkey partners that deliver customer value indirectly or directly via collaboration with them.
Share your thoughts, ideas AND QUESTIONS regarding which of the 9 elements you think are the most important. Include specific 2 real world examples of business success or failure to help explain your position. As always, in the responses to your colleagues, share your thoughts on what others have contributed
Explanation / Answer
9 Important elements of Business Model Canvas are-
1.Customer Segment- It defines the various costumers in a particular geography based on the pricing, demands, likings, Purchasing power etc.
2. Value Proposition- It means the value or the satisfaction that the product or the service is going to provide to the customers and this is what they are going to pay for. This is very critical element as it is defines the success or failure of the product.
3. Channels- this element talks about the channels or means by which the company is going to market the product or make the product available to the ultimate customer.
4. Customer relationship- every business has certain grievances and has to redress the complaints of the customers and also to satisfy their demands. In this element the business will look into the fact as to how we are resolving the customer complaints.
5. Revenue streams- This element will define how the business is planning to earn the income from the geography and how does it plans to identify the sources of income. This element tells the business how revenues will flow in the company.
6. Key resources- the company cannot function without the resource, which are core to the business. In this element the company has to decide as to that are the key resources that will help the business to grow and function
7.Key activities- the activities which the company is planning to carry out in a particular year related to the product ranging from the initiation of the production to the process of reaching the customer.
8. Key partnership- to work in a geography a company has to build partnership with the local suppliers the agents and then to produce goods. This is very important for the business to look into as to what partnerships they are planning to build.
9 Cost structures- very critical and overall functioning of the business will depend on this as to what cost are involved, how are we planning to manage them, how are we dealing with budget deficit etc.
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Real life example would be Walmart. As it planned to carry out and Asia expansion and hence it created a 9 pointer Business Model canvas and decided that it will target South east Asia first with local partnership with the dealers.
Second example would be Adidas launching its premium spike shoes in South East Asia by creating a Business Model Canvas and planning out the whole process over a period of 2 years.
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