BUSINESS MODEL CANVASProf. Bhasker Vijaykumar Bhatt

Assistant Professor in Civil Engg. Dept.

Sarvajanik College of Engg. & Tech.,

Surat

GTU CIRCULAR

All student teams have to develop and prepare a BMC with respect to their project.

They also need to upload the prepared report on BMC at the project site.

Students will be intimated when the facility to upload the BMC canvas & report will be made live.

Detailed circular/guideline related to all canvas including BMC is already available at: http://files.gtu.ac.in/circulars/14SEP/09092014_04.pdf

http://www.gtu.ac.in/circulars/15Mar/10032015.pdf

http://files.gtu.ac.in/circulars/14SEP/09092014_04.pdf

It is intended to strengthenBE IV Students Strategically

For all branches at SCET, Surat

It is an answer to

I want to

develop a clear plan

on how to grow

my idea into

something bigger

Osterwalder A., Pigneur Y (2010) Business Model Generation

Reference: Osterwalder A., Pigneur Y (2010) Business Model Generation

A One-page answer to

The both,

What you do (or want to do), and

How you go about doing it

It enables structured conversations around management and strategy by laying out the crucial activities and challenges involved with your initiative and how they relate to each other.

Reference: Osterwalder A., Pigneur Y (2010) Business Model Generation

CAN WE CREATE A BALANCE HERE?

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Bhasker

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, to

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How?

To make a Business Model Canvas, the easiest way to start is by filling out what you do.

Start from a blank canvas and add notes with keywords to each building block of the canvas.

If you use sticky notes for this, you can move ideas around as you fill out each building block in the canvas.

Caution

Dont fall in love with your first idea

Instead

sketch out alternative business models for the same product, service, or technology.

A products value proposition is a statement of

the functional, emotional and self-expressive

benefits delivered by the brand that provide value to

the target customer (for example, cost savings, time

savings, revenue increase, customer/employee

satisfaction), and how much of it the customer can expect

http://www.marsdd.com/mars-library/elements-of-a-products-value-proposition-functional-self-expressive-and-emotional-benefits/http://www.marsdd.com/mars-library/marketing-strategy-for-startup-success-identifying-and-understanding-your-target-customer-and-market-segments/

Value must always be considered from the buyers perspective.

For the customer to consider buying your product, your value proposition must

Be superior not only to the competition but also to doing nothing (that is, the status quo).

Differentiate you from the competition and focus on your products unique benefits.

Demonstrate an understanding of what your customers are trying to achieve.

Understanding the customers role (that is, economic buyer, technical buyer, end-user) is critical

when developing a value proposition.

http://www.marsdd.com/mars-library/does-competition-exist-for-startups-introducing-tech-products-into-the-market/http://www.marsdd.com/mars-library/competitive-differentiation/http://www.marsdd.com/mars-library/developing-your-value-proposition-an-overview-of-customer-discovery/

Activity 1: Key business model questionsWrite a brief response to the following questions.

1. How do you acquire customers?

2. After you have landed a new customer, how do you plan to relate to that customer and manage the relationship (if at all)?

3. How do you charge your customers? What is your revenue model?

4. How much do you charge your customers? Can you calculate your revenues for the next month, quarter and year?

5. What assets are available to you or under your control?

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

http://www.marsdd.com/articles/revenue-models-overview/http://www.marsdd.com/workbooks/bottom-up-forecasting-for-pre-revenue-start-ups/

Activity 1: Key business model questions

6. Who are your key partners?

7. What key activities do you need to engage in to deliver your value proposition?

8. What are your fixed costs?

9. What are your variable costs? Can you calculate your total cost for the next month, quarter and year?

10.Does your revenue forecast demonstrate increased profitability towards the end of the forecast period?

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

http://www.marsdd.com/entrepreneurs-toolkit/articles/value-proposition

VALUE

PROPOSITIONS

CHANNELS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEY

PARTNERS

KEY

RESOURCES

KEY

ACTIVITIES

Activity 2: Create your own business model

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>

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http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

What next during BE IV?

Answers in Activity 1 will frame the REPORT

Answers in Activity 2 will frame the BMC

Next

Convert your BMC & Keep it in a soft format (.jpg / .ppt or similar)

Next

Make an exhibition of canvas for student friends and faculties within semester (Department level exercise, it is not the Project Showcase)

Get their views/ reviews/ comments/ suggestions Modify the BMC Finalize and keep ready to submit to GTU as and when asked

Convert your work in strategy

(Not in syllabus at BE IV, but for future path ahead)

Activity 3: Consider your business model

Does it work? Do the revenues outweigh the cost? Try estimating revenues and cost for the next month ( or the first month of sales, if you are without revenue for now)

What are the risks to your business model? What parts of your business model are most critical for your business to grow in a profitable manner?

Are there things that can or should be changed to strengthen the business model or reduce its risk?

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Activity 4: Clarify your business model assumptions

Check each response in the Building Model Canvas against the following criteria:

How do you know what you wrote in each building block is true? Have you made an assumption or do you have solid evidencein the form of documented facts?

In the cases you have facts, label the response as Fact and make a note of your evidence.

In the cases you have made assumptions, label the response as Assumption.

Complete the activity by listing all the assumptions regarding your business model on the next slide.

The next section will address how to test those assumptions.

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Activity 4: Clarify your business model assumptions (contd)

List your assumptions about your business model

No. Question Fact (with evidence) Assumption

1.

2.

3.

4.

5.

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Activity 5: Prepare to meet customers/ users

Prepare the materials needed before you meet potential customers/ users: (create a checklist of the points below)

Materials/ Technology/ Product Information (Handout) Presentation/ PDF/ PPT/ JPEGs Website/ Webpage Other (demo/prototype/case study)

Channel strategy description (Whom to meet, when and where)

Sales process description: Economic buyer Other stakeholders involved in customers buying process Steps in and duration of sales process Expected deal size Pricing options

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Activity 6: Update your documentation

Document your sales roadmap by answering the following questions.

Who are the stakeholders involved in the customer's buying process?

Who typically plays the roles of influencer and economic buyer?

What are the stages and the length of the sales cycle?

What is the profile of the typical buyer?

What is the best sales strategy?

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

http://www.marsdd.com/articles/stakeholder-management-in-technology-saleshttp://www.marsdd.com/entrepreneurs-toolkit/articles/stages-of-the-sales-funnelhttp://www.marsdd.com/articles/target-customerhttp://www.marsdd.com/entrepreneurs-toolkit/articles/stages-of-the-sales-funnelhttp://www.marsdd.com/entrepreneurs-toolkit/articles/buyer-personashttp://www.marsdd.com/entrepreneurs-toolkit/articles/sales-101-the-role-of-selling-in-a-start-up

Activity 6: Update your documentation (contd)

Create your positioning statement using the following template.

For What?

Who. Will use?

Our product/ process/ technology is

That provides

Unlike (competitive factors, if any)

We have assembled/created/invented a product/ process/ technology that.

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

VALUE

PROPOSITIONS

CHANNELS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEY

PARTNERS

KEY

RESOURCES

KEY

ACTIVITIES

Activity 6: Update your documentation (i.e. next of BMC version)

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Activity 7: Plan your next steps

No. Activity Deliverable Deadline Responsible

1. Develop a revenue forecast

2. Put together a marcom strategy to generate demand and shorten your sales cycles

3. Create a product roadmap

4. Continue to engage with customers on your initial target list

5. Plan for growth

Take the required steps to implement your business model(make a checklist of the items below):

http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/

Convert your work in Future Business

(Not in syllabus, but for future path ahead)

ExamplesFor understanding the concept on BMC

For BE IV Project based on

Process OR

Product OR

Technology

Product: Soap Sponge

References

Aaker, D.A. (1996). Building Strong Brands. New York: Free Press.

Blank, S.G. (2005). The Four Steps to the Epiphany. Self-published: Cafepress.com.

BUSINESS MODEL ALCHEMIST (HTTP://BUSINESSMODELALCHEMIST.COM/TOOLS) AND (Strategyzer.com)

MaRS DISCOVERY DISTRICT (http://www.marsdd.com/mars-library/value-proposition-a-reflection-of-the-relationship-between-your-customer-and-brand/)

Building blocks of the business model canvas (http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/)

Video Lecture tutorial (http://www.marsdd.com/mars-library/business-model-canvas-entrepreneurship-101-201415/)

http://www.slideshare.net/svanebjerg/business-model-canvas-9238780

http://businessmodelalchemist.com/TOOLShttp://www.strategyzer.com/http://www.marsdd.com/mars-library/value-proposition-a-reflection-of-the-relationship-between-your-customer-and-brand/http://www.marsdd.com/mars-library/building-blocks-of-the-business-model-canvas/http://www.marsdd.com/mars-library/business-model-canvas-entrepreneurship-101-201415/