A Business Model is Simply a description or an account or a conceptual plan of how a business will make a profit What Do Businesses Do? 1. Spend time, effort and or money to create something 2. Find someone who is willing to pay for it 3. 2. > 1. Some Examples
Razor Blade Model Sell razors cheaply (below cost) Create a locked in customer base Sell blades well above cost Same model used by ink jet printer firms Sell printer cheaply (below cost) Create a locked in customer base Sell inks well above cost Other Examples Razors and Blades Ink-jet printers Keurig coffee maker Video game consoles
iTunes Key elements of a business model Whats the product or service? Who will pay for it, why, and how much (the value proposition)? How much it costs to make or deliver How much is left (profit) Who are partners, suppliers, competitors, complementors Structure and processes Marketing Distribution Operating / manufacturing Supply chain
Finance (sources of funds, returns to investors) Other Stakeholders The Internet Lots of new business models have been made possible by the Internet Amazon a refinement of a old model Google a completely new business model Top billing Click through Quibids.com Charging loosing bidders (penny auctions)
edX (MOOCs) Amazons First Business Model Vast potential customer base Efficient fulfillment High volume bargaining power, low delivery and product costs Exploiting the long tail go-to site -> customer base Virtuous circle Book sales
Amazons Evolving Business Model Diversification into related products Broadening into a generalized marketplace Making a market Providing a platform for small sellers Fire Phone Amazon Prime Spillover Amazon Web Services
Googles Business Model Initially just another search engine, (albeit a very good one). Gradually beat out earlier rivals (Yahoo, Lycos, Excite, Infoseek, AltaVistsa, and AskJeeves) How to make money from search? Subscription, user fee? Search Top billing Result Click Through Quibids Business Model Endless auction (hard to do in physical space) Winners pay But so do the (very many ) losers
So Quibids get paid multiple times edX Business Model Leverage a well known brand Take existing material Possibly add fancy post production (cost $500k) Put it on the web Sell this to other universities for $250k Plus 30% of all student fees above that A General Template Miller / Okumoto, Inc.
Business Model Example dunnhumby Retail Client (Vendor) Client Interface Team 1. 2. 3. Who are the members? What skills should they possess? What level of experience? 1.
2. Is this a dedicated group? What skills should they possess? Solutions Team Outside Partners 1. 2. 3rd Party data sources? 3rd Party software products? 1. 2.
3. What is Client economic benefit? What is Client strategic benefit? What is Vendor benefit? Client Team (labor + Overhead costs) Solutions Team (labor + Overhead costs) Outside partner(s) cost Product cost Product development cost Contribution Margin: Vendor Interface Team 1.
2. 3. 4. Are all levels represented? Contact points, times, & events? Expectations understood? Level of satisfaction understood? 1. 2. 3. Internal support points covered? Inside sales team Unofficial communication channel
Key Processes Activities 1. 2. 3. 4. 5. 6. Account status reporting Detailed SOW Development of Mfg relationship Relationship at every Client level? Vertical development process Other primary processes?
Cost Elements 1. 2. 3. 4. 5. (Level - Pilot) Client / Vendor Value Proposition 1. Present in a P&L format Vendor Supporters
Revenue Streams 1. 2. 3. Data base access fee? Incremental Inquiry fee? Aid in acquiring Mfg fees 2. Contribution rate Objective: e.g. (break-even / slight profit / slight loss) ? Miller / Okumoto, Inc. A Useful Template Summary
What the product or service is Who will pay for it, why, and how much (the value proposition) How much it costs to make or deliver How much is left (profit) Who are your: partners, suppliers, competitors, complementors Structure and processes Marketing Distribution Operating / manufacturing Supply chain Finance (returns to investors) Other Stakeholders
Volumetric Analysis Volumetric Analysis Volumetric analysis is the method of finding out the concentration of a solution. For example: Adding a solution of acid to a solution of base, in a measured way, until you have added enough to neutralise...
Steel from podium Painter homework problem. Get demo here have man stand at several places calculate force on each support. ... CCW rotation is positive ACT The picture below shows three different ways of using a wrench to loosen a...
La prima guerra civile (88-81 a.C.) Optimates e populares La Guerra Giugurtina Gaio Mario, homo novus riforma esercito La legione coortale I Cimbri e i Teutoni politica di Mario La guerra sociale (90-88 a.C.) guerra Mitridatica e inizio I guerra...
Conceptual model. Need for SQL extensions. CONNECT statement. RECURSIVE statement. Storage and data structures. ... DBMS decomposes a query into building blocks. Keeps a couple of strategy for each building block . Selects most suitable one for a given situation....
When Martiza was preparing her experiment, she knew it was important that the participants not know which condition they were in, to avoid bias from the subjects. This is called a _____ study. She also was careful that the experimenters...
Ready to download the document? Go ahead and hit continue!